UCSD Event: Is Populism Reshaping Social Protection in Latin America?

As more right-wing populist leaders appear throughout Latin America, Brazilian economist Tiago Falcão gave a presentation at the Institute of the Americas to speak on how this new phenomenon will influence government social spending programs. 

by Rebeca Camacho
Managing Editor

With the rise of populist leaders all throughout the world, scrutiny of social welfare programs reclaimed attention in the political sphere. On Wednesday, January 29, 2020 the University of California, San Diego’s School of Global Policy and Strategy and Center on Global Transformation hosted Pacific Leadership Fellow and Brazilian economist Tiago Falcão, who gave a presentation on the resurgence of populism and its implications on social welfare programs in Latin America. The event took place in the Malamud Room, located in the Institute of the Americas where many scholars, researchers, and industry experts meet to evaluate developments in the region.

An economist by trade, Tiago Falcão currently serves as the National Secretary of Income of Citizenship in the Ministry of Social Development in Brazil. Falcão’s talk was the culmination of his two-week stay at UC San Diego, where he came to conduct research and share insights on how increases in social expenditures through programs like conditional cash transfers (CCTs) have played a role in expanding social protection in Latin America. The presentation focused on addressing questions surrounding the sustainability of current levels of social spending and the behavioral effects of CCT programs like Bolsa Familia in Brazil and similar versions abroad. 

Picture of Bolsa Familia recipient holding up her government identification card. (Source: Reuters for Women Deliver)

The presentation itself was divided into two main areas of focus. These included a brief overview on the ascension of an evolved right-wing populist movement in Latin America, and the verifiability of conditional cash transfer programs in measures of poverty alleviation,  accountability against criticisms of perpetuating the welfare state and spillover effects.

In order to understand exactly what is included under populism, first on the agenda was identifying some of the nuances along with generally agreed-upon traits surrounding the political trend of populism. Falcão explained how the challenge of defining the concept was due to its variations across time and space, and the existence of many subcategories such as national versus neoliberal, left-wing over right, and so on. 

To better illustrate the complexities of the term, he cited a quote from David Arter’s political commentary Government and Opposition, “Populism is confrontational, chameleonic, culture-bound and context-dependent.” At the core however, what every populist regime has in common, most scholars would agree, is the presence of a charismatic leader with a direct appeal to ordinary people. 

When examining populism and where it lies along the political spectrum, Falcão emphasized the paradigmatic shift of moving away from a previously left-leaning ideology and gearing down the path of a more radicalized right wing agenda. For the most part, Falcao mentioned how Latin American presidentialism has been historically characterized under leftist populism. He cited classical examples from former President Juan Peron in Argentina to more recent leaders such as Evo Morales in Bolivia, to name a few. The underlying similarity between all these figures is that their politics were aimed at increasing social expenditures through the integration of cash transfer programs. 

During the last five years however, Latin America witnessed a major shift with the resurfacing of a more reactionary right wing movement that is leading many of its major governments. Examples of this include President Martín Vizcarra in Peru, former President Mauricio Macri in Argentina, and most prominently current President Jair Bolsonaro in Brazil. Falcão noted that this reactionary right wing classification is particularly more connected to the middle class and religious groups, and voiced concerns regarding the sustainability of present social spending in an attempt to restructure standing national CCT programs. 

Such existing conditional cash transfer programs are based on widely accepted research in economic development. Common features include a focus on short-term poverty relief combined with efforts to break intergenerational cycles of poverty, benefits which are subject to conditionalities, cash amounts that vary according to household size, and low cost in terms of GDP and budget allocations. It is important to note here that rich countries spend on average more per capita than Latin American countries do on social welfare. To put things in perspective, Falcão explained how almost twenty percent of the population in countries like Brazil are covered right now by CCTs, which represent less than half a percentage point of the country’s GDP overall. 

Statistic taken directly from Falcão’s presentation illustrating the percentage of CCT recipients that are in the 40 percent poorest socioeconomic demographic. (Source: World Bank)

The most noteworthy contentions surrounding the issue of conditional cash transfers were also addressed and synthesized into four popular misconceptions. The economist listed them to be the following: that CCT recipients tend to work less and become lazy, that there is an increase in fertility rates due to household size-based merits, that transfers are misused rather than invested in essential goods and productive activities, and the mistargeting of program beneficiaries. All of which, Falcão disproved through the use of various studies in economic research, including 2019 Nobel prize winner for Economics Abhijit Banerjee and his co-authors’ work “Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs.” 

Looking ahead, Falcão touched on potential scenarios of what the future categorization of CCTs would look like, and how it is yet to be seen whether or not populism will reshape social protection in Latin America, as substantial data on this is lacking. 

“I am not convinced that populism per se in Latin America can be attributed to the increased attention given to social programs in recent years,” he said. “I believe there are other explanations that attest to what has happened in the region, and strongly affirm that while it is a fact that certain expenditures are imbalanced and need to be changed, discussions need to be more centered on the quality of these programs rather than the dollar amount or policy elimination without clear alternatives.”

Whether or not populism is reshaping social policies in Latin America remains to be seen, but the greater threat, Falcão argued, is how much of a say many populist governments are diverting away from the scientific community within the decision-making process. 

“The real concern however, is that public policies are being influenced by sensationalist media, fake news, and electoral campaign strategies,” Falcão said. “..rather than the scholars, experts and practitioners who are being left out of the debate due to their refusal to provide easy answers for the complex questions nations are faced with.”

Indeed, it appears as though the challenges governments face of balancing the budgetary allocation of social programs is not going away anytime soon. With the rise of right-wing populism however, the question then becomes what role will fact-based evidence play in determining the future of public welfare. 

For more on how governments are evaluating social spending programs, check out Editor in Chief Tenzin Chompel’s article on UBI: The Global Antipoverty Experiment

Featured image courtesy of UC San Diego School of Global Policy and Strategy.

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