Emergency Basic Income During COVID19? Policy Lessons from Maricá, Brazil

Posted in: Basic income, COVID-19, Culture and policy, Data, politics and policy, Economics, European politics, Public services

Jurgen De Wispelaere is a Visiting Fellow at the Institute for Policy Research in the University of Bath and is the Research Coordinator of the Basic Income Earth Network (BIEN). Leticia Morales is an Associate Professor of Law in the Faculty of Law and Social Sciences at Universidad Austral de Chile. Fabio Waltenberg is an Associate Professor in the Department of Economics, Universidade Federal Fluminense in Brazil.

The reflection below is based on the article Basic income as a pandemic social protection instrument: Lessons from Maricá, Brazil, recently published in a themed issue on “Emergency Basic Income: Opportunity or Distraction?” of the International Social Security Review. Francesca Bastagli and Jurgen De Wispelaere will be debating Emergency Basic Income at the upcoming Bath UBI Beacon politics of basic income public talk series (online, 16 May 2024 at 16:00-17:30).

The COVID-19 pandemic launched a world-wide search for agile policy instruments capable of mitigating the vast social and economic fallout of increasingly restrictive public health measures. Governments were eager to devote unprecedented fiscal layouts to supporting individuals, families and businesses increasingly failing to make ends meet as the pandemic dragged on. The big question became what is the most suitable instrument to disburse this level of income support, given the urgency of the situation and the broad range and heterogeneity of the affected population.

Basic income advocates wasted no time pitching the virtues of universal and unconditional cash transfer schemes during a crisis. Swiftly dubbed “emergency basic income”, the idea of a time-limited variant of the familiar universal basic income (UBI) scheme started to appear in pandemic policy debates. Like its permanent cousin, emergency basic income (EBI) is meant to be provided to all individuals irrespective of means or labour market status and without conditions attached. The universal application and lack of conditions would facilitate implementation at a time when administrative capacity in most countries was stretched very thin.

International organisations such as CEPAL or UNDP issued (guarded) calls for a temporary or emergency basic income to be installed by nations and even whole regions (e.g., Latin America). Many national and sub-national jurisdictions turned to cash transfers to supplement existing social protection measures. A good number of them, notably in Asia but also Australia, Canada and the US, introduced cash transfers that resembled the idea of an EBI in several respects. But in all cases, these were temporary (sometimes one-off) measures, intended to be rolled back as soon as the economy returned back to normal – and they did, for the most part.

Basic income advocates were keen to use what they viewed as a pandemic policy window to push for the introduction of basic income schemes around the world. But they were rather less enamoured with the idea of a temporary EBI. Part of the problem was the predictable fact that it would likely be discontinued as soon as the pandemic lockdowns were lifted and the economy would return to something akin the pre-COVID era. In addition, many basic income advocates thought the EBI would detract policy debate from the more radical objective of transforming the economy and building a more equal and free society for all. Basic income advocates fear – not altogether unreasonably – that EBI could displace the surge of interest in UBI following a decade of global policy experiments and pilot schemes.

The case of the Brazilian municipality Maricá perhaps offers a way out of this conundrum by showing how EBI and UBI are not necessarily competing but instead co-evolving and mutually reinforcing. In 2013 Maricá, an oil-rich small municipality located in the State of Rio de Janeiro, introduced a UBI-like scheme called Renda Básica de Cidadania (RBC) as part of its solidarity economy approach. Covering roughly 25% of the population, before COVID19 the RBC paid around 42.000 individuals a monthly cash benefit of BRL 130 (around 50 USD PPP) paid out in mumbuca, a local digital currency integral to Maricá’s solidarity economy. (To put this in context, at BRL 130 a family of four would receive approximately 20% of the per capita GDP of Brazil). During the pandemic, the municipal government of Maricá managed to increase the RBC to a value of BRL 300 (a 130% increase) within a matter of days. The RBC retained this value during the pandemic but was reduced to BRL 200 when the economy opened up again mid-2022, which still represents a 30% increase in inflation-adjusted value compared to the pre-COVID level.

Maricá was able to swiftly dial-up the value of the RBC by effectively grafting an EBI supplement onto a pre-existing UBI scheme. With all the implementation elements in place, a simple political decision of the municipal government was all that was required to have extra cash flowing into the pockets of the poorest and most vulnerable residents. We can see the advantage of this approach by contrasting it with the difficulties Maricáfaced when introducing a novel pandemic support scheme for workers not covered by the RBC, the Programa de Amparo ao Trabalhador (PAT). This more generous scheme covering around 20,000 workers had to set up a registration scheme from scratch and faced additional hurdles allocating the benefit. Compared to the RBC, which paid out the upgraded benefit in a matter of days, the PAT had to countenance delays of two to three months, which in the context of a pandemic emergency arguably amounts to a borderline policy failure.

Meanwhile, the neighboring city of Niterói decided to follow the Maricá example by introducing its own EBI, the Renda Básica Temporária (RBT). But while Maricá couldgraft its EBI onto an extant RBC, Niterói had to set up its scheme from scratch in the midst of a pandemic emergency. This involved, amongst others, creating communication campaigns to inform potential eligible candidates, screening those who applied, cross-checking information and documents provided with data from other municipal and federal databases, launching a public bid for the debit card provider, distributing the RBT cards, and campaigning for businesses to accept payments through this means in addition to the regular payment methods. A particular risk, in the context of a pandemic, was the requirement for applicants to be physically present for registration and card distribution, precisely at a time when the Niterói municipal government had decreed a lockdown. While Niterói’s RBT and Maricá’s RBC share simplicity in design, the implementation eco-system was radically different – and so was the performance of each policy during the pandemic.

As we show in more detail in our article, comparing the three cases above clearly shows the superiority of what we call a “dial-up/dial-down” model compared to the alternative “switch-on/switch-off” approach for crisis policy interventions. A dial-up/dial-down approach depends on there being an active policy in place that can be swiftly upgraded either by simply boosting the “cash volume” or else by grafting a separate but integrated scheme upon it. Switch-on/switch-off models effectively need to be activated during each crisis event.

The Maricá RBC case offers empirical evidence that speaks to the advantages of dial-up/dial-down over switch-on/switch-off during COVID19. In our article we discuss three key advantages.

  1.  Dial-up/dial-down economizes on administration and specifically addresses concerns regarding the need for joined-up decision-making between politics and bureaucracy. With implementation systems firmly in place, decision-making can be fast and agile bypassing numerous hurdles. The result is a highly streamlined process that avoids delay, error and fractured implementation.
  2. Dial-up/dial-down benefits policy learning by ensuring key knowledge, experience and routines are in place at all times, allowing a crisis intervention like EBI to build on a robust implementation base. Even where specific administrators cycle out of their positions in between emergencies, other bureaucratic staff will have taken their place ensuring agile implementation capacity is secured throughout.
  3.  Dial-up/dial-down effectively requires the establishment of at a minimum a “maintenance UBI”, which in turn ensures a minimal level of political investment to ensure the pipes remain unclogged as it were. Where switch-on/switch-off models run a serious risk of disinvestment in between crises, the dial-up/dial-down logic has crisis preparedness built-in and would be able to resist funding threats more readily.

Returning to our starting point, we argue that the case of a municipal RBC in Maricá offers important policy lessons for the basic income debate writ large. We want to single out just two to end this blog post.

First, Maricá confirms there is a role to play for a time-limited emergency basic income during pandemic (or other types of) crisis events. Dialing-up the RBC during COVID19 not only had a major immediate impact by offering vital assistance to the most vulnerable residents in Maricá. It also provided an unequivocal example of a policy success that is causing the basic income idea to spread across the State of Rio de Janeiro and elsewhere in Brazil.

Second, the case of Maricá also illustrates that EBI and UBI need not be competitors but can be joined-up leading to a mutually supportive policy dynamic. UBI makes EBI become a reality faster and therefore perform better; in turn, EBI’s direct link to pandemic preparedness adds a valuable argument to UBI’s political arsenal.

All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.

Posted in: Basic income, COVID-19, Culture and policy, Data, politics and policy, Economics, European politics, Public services


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