Brazil’s Innovative Anti-Poverty & Inequality Model

Poverty and income inequality were two main problems of Brazil. In order to solve these problems Brazil has taken different policy initiatives. The economists call it an innovative anti-poverty and inequality model. The objectives of this paper are to study different aspects of Brazilian innovative anti-poverty and inequality model and its impact on Brazilian society. Another objective to study is whether this model is specification in its applicability or it may be applied on other medium-income economies because income inequality and poverty are the common problems of almost all developing countries. This is a qualitative research study in which we have studied different characteristics in general terms and policies introduced by Brazilian government during 2000-2010 periods. We have used secondary data extracted from the database of IMF, World Bank, US Federal Reserves, US Bureau of Economic Analysis and relevant journals. Our study finds hat poverty in Brazil has reduced from 17 percent in 2000 to 8 percent in 2010. The evidence also shows that the wealth of the richest 20 percent of upper class was decreased during 2000-2010 due to high tax rates payment and the income of lowest 20 percent quintile was increased from 2.6 percent to 3.5 percent in the same period. It shows that the income of lower class was increased while the wealth and income of upper class was decreased during 2000-2010. The study also reveals that about half of poor segment of Brazilian population has come out of poverty trap in a short span of just 10 years.