Brazilian Welfare: Achievements and Risks

Grounded on the concept of ratchet effect of distributive social policies, I propose in this work an explanation on the intriguing resilience of levels of social welfare and distributive outcomes, despite the severe economic crisis faced by Brazilian economy since 2013.

By working on the more recent data of PNAD (National Survey by Household Sample), I seek to demonstrate that some existing distributive social policies - like Minimum Wage and Income Cash Transfers (Bolsa Família), are crucial to explain that resilience.

Relying on opinion polls and on political debate at the country, I show that these policies have transformed the distribution of preferences and the universe of actors, raising the political and social costs of moving to another regime. This is a path dependent effect which supports the approach on public policies as institutions, that is say, as 'rules of the game' that produce policy effects and, thus, can create new politics.

In light of this approach and of the available data, the work shows that social policies implemented by the Lula government (2003-2010) transformed the political preferences of the population and altered the distribution balance of these preferences among Brazilian political and social actors.

Finally, it shows that this 'ratchet effect' is at the root of political and economic trap experienced by Brazil in the present crisis, by reducing the options of the macroeconomic adjustment and narrowing the possibilities of a new political pact needed to overcome the crisis.