Social Policy Reforms in Brazil and Mexico

During the last decades Latin America has become the world’s social policy laboratory. Many recent innovations in the field have been pioneered and tested in the region and are promoted by international organisations as optimal tools for social protection. Policy innovations have expanded social policy to groups of the population historically excluded.

Brazil and Mexico have embarked on similar expansion processes of their social policy systems. Throughout most of the twentieth century social policy in both countries was based on social insurance systems of limited coverage to urban formal sector workers and their families. In recent decades, social policy has been expanded to unprecedented levels. However, outcomes of expansion processes differ substantially between the two countries. Whilst Brazil has registered important improvements in its social indicators, Mexico falls among the few Latin American countries where indicators like poverty and inequality rates have not decreased in a substantial way. This article explores the causes of the different results obtained from social policy reforms in the two countries, the largest in the region, by estimating the impact of changes in their institutional design at the household level.

The article applies the ‘model families’ approach to map each country’s welfare system, covering all core social policy areas; identify the predominant logic followed in the design of policy changes, e.g. universal or selective; and analyse its impact on different sectors of the population. Findings establish the patterns of redistribution that have emerged from expansion processes, the potential of social policy to raise and keep families above poverty threshold, and the achievements and limitations in the design of social policy innovations introduced in Latin America.