Considering post-crisis stimulus measures: Welfare policy and social inclusion in Brazil

Abstract

The onset of the 2007-2008 global financial crisis slowed economic growth in Brazil and threatened the country’s established trajectory of decreasing poverty and inequality. To mitigate prolonged effects of the crisis, leadership implemented a growth-with-equity stimulus plan, of which investment in income augmentation and human capital-building programs for the poor were primary elements. This article examines the economic and social impacts of the stimulus package. It shows that stimulus measures had overall positive effects on the economy, but mixed effects on the well-being of the underprivileged. Improvements in the underprivileged population’s well-being may be less profound than officials have reported, as gains on poverty have been assessed in terms of income level and social program utilization rates, while the low quality of human capital-building services has been less considered. If the quality of these services is not improved, human capital development may be stunted, which could hinder future socioeconomic progress.