INTRODUCTION

The battle against poverty has been an all-time burden for humanity. Progress has been slow and most of it has been done in
relatively recent times thanks to better social structures and understanding of the social reality. Poverty is not limited to
monetary/material burdens as it includes many other hardships. Poverty deprives people of stability; the never-ending battle with
distressing circumstances, intertemporal decision-making lead to more concerning opportunity costs and behaviors that can generate
vicious cycles. Even today, poverty remains as one of the most distressing and complex issues for nations worldwide. Throughout
the world many nations have poverty highly prioritized among their programs, in which policymakers are essential. However, many
times such policies aren't flawless and may not achieve the desired results. When it comes to building anti-poverty policies things
tend to get intricate and making the right decision becomes difficult. The understanding of each context as well as the seemingly
irrelevant details, like consumer behaviors such as saving trends are often overlooked. Nations with anti-poverty policies should
address such measures promptly if effective results are desired. For instance, countries such as Brazil with high poverty levels, a
savings crisis and, in general terms, bad economic performance are in need to take such considerations.

Brazil´s turbulent economic context and overlooking policymakers are central to the problem. The Brazilian economy faces
several issues at the time and historical recklessness regarding the decision making of authorities have deepened their problems both
statistically and structurally. The number of problems is so big that often the situations present themselves as deadlocks. As the
World Bank points out: “Striking the right balance between protecting the poor and ensuring sustainable public finances, including
at subnational levels, will be a key policy challenge in 2021.”1 Given that, it’s likely that policy making becomes more difficult
since there isn’t a clear view of the situations nor a clear line of action. Additionally, not only the systemic decline of savings but the
policymakers having overlooked culture and certain consumer behaviors, such as saving trends, have been determinant to the
situation. In essence, when attempting to improve impoverishment, most of the time policymakers solely possess a theoretical
understanding of what poverty is rather than a practical one of what a life of poverty is like in each of its contexts which results in a
gap between policymakers and poor people .

Important historical trends, recent events and policymakers limitations are key to the current conditions of the problem. For
instance, Brazil's recent history has implied both economic and political instability. Political polarization has given way to massive
protests both on the left and right and controversial figures such as Lula Da Silva and Jair Bolsonaro respectively. Additionally,
throughout the years Brazil constantly suffers from structural and fiscal vulnerabilities in the form of critical public finances (debt
crisis) as well as diminishing external/internal demand and supply shocks. On top of that, distressing inflationary pressures,
worrying currency devaluation and more recently high unemployment have made Brazil a complicated climate for saving/investing
since the 1980´s. By having savings in a crisis, policymakers have attempted to ease such a process but quite often some details are
overlooked. For instance, policymakers often neglect the fact that poor people tend to view savings in absolute terms rather than in
relative terms and also even neglecting both cultural reality and historical trends of each context.

High poverty levels are nothing new nor the general economic ill-being because it has been present since the very beginning of the
nation. Despite this, it's worth saying relatively formidable progress has been made. For instance, by 1981 poverty was around
60.2% and in 2019 around 19.6%. With this data it can be said that poverty still remains huge in Brazil and shocking images of the
favelas don't prove otherwise.

The efforts toward an improvement on poverty is essential in the development of Brazil. The conditions of poverty aren't limited to
statistics or the poor neighborhoods themselves but its effects reach the many strata of society either directly or indirectly. Such
precarious conditions are linked to overall health deteriorations which can make the propagation of diseases much more likely. Also
poverty may induce people into criminal activities ranging from small ones to violent organized crime which creates insecurity
(damaging human relations), complicates economic growth and may even create corruption among the higher ranks of society such
as politicians. On top of that, high levels of poverty and inequality may cause social uproar which frequently leads to political
instability. The issue of poverty is relevant to everyone in society because it negatively impacts the relationships among humans and
makes life in community much more difficult, especially in the Brazilian case. Improving the conditions of poverty enables both
individuals and groups to work together and add true value to society and human life.
 IDENTIFICAR EL PROBLEMA

The main problem in this policy brief is that policymakers possess different perceptions regarding economic decision
making and poverty in comparison to people from poorer or less affluent communities. This may result in an ineffective
implementation of anti-poverty measures.This leads us to question ourselves how well do we understand the contexts of
poverty. It is critical to be able to identify which factors underlie and act as drivers for judgments in economic decisions.
Different groups respond to particular arguments for and against tackling inequality. In order to be able to appropriately
aid and assist those countries in economic distress, it is necessary to design realistic policies which fit in with the
behaviors of the people within the zone said policies are being implemented in.

It is critical to offer an alternative of assumptions in contexts of poverty so that policymakers can analyze correctly what
factors lead to poor people engaging in behaviors which can perpetuate poverty. Behaviors such as ignoring programs and
policies designed to assist them, undersaving, or underinvesting in health and education.

In more depth, there are three reasons, according to the World Development Report, which may explain why the context
of poverty has the capacity to modify decision making in relevant ways. Firstly, poverty is not just a lack of money, the
constant daily hard choices associated with poverty can develop a cognitive tax, which can lead to economic decisions
perpetuating poverty. Secondly, poverty can blunt the capacity to aspire for new opportunities and creates a poor frame to
take advantage of them. Lastly, the environments of people living in poverty ask for additional cognitive demands. It is
different to live in the suburbs of a city in the U.S. than to live in the favelas of Brazil.

Every year, international organizations such as the World Bank spend large amounts of resources and money in order to
try to address a wide spectrum of issues affecting populations around the world. The implementation of ineffective
policies and their consequential failure would mean a tremendous waste of resources as well as a potential loss of
credibility to these enterprises.

It is imperative that policymakers are able to comprehensively understand poverty within the fact that there is not a
precise type or definition of poverty, as such a problem is more complex than what it appears to be and has many layers of
complexity to it. It is necessary to understand poverty knowing that different social, historical or cultural contexts come
into play throughout the different stricken communities. Therefore, the ways in which a policy is carried out may differ
depending on how poverty is defined . Finally, effective poverty reduction measures integrate the views of people
experiencing and living in poverty which may be helpful as there might be an alignment of perspectives and perceptions
between the less affluent individuals in the community and the policymaker.1

1
https://www.shareweb.ch/site/Poverty-Wellbeing/addressingpovertyinpractice/Pages/Understanding-
Poverty.aspx
 CURRENT DEBATE AND POLICY OPTIONS
FRAMING BIAS: One of the strongest in all contexts of poverty is the Framing Bias. Taking such
bias into account to make policies would be a crucial step since it will allow both helpers and the
helped to have a practical understanding of their situation. It would be necessary for policymakers
to comprehend how each society works, in the sense of what it values and what it seeks.
Acknowledging their moral codes, social conventions and their needs will allow them to
understand the mechanics of their society, which will facilitate a way round to this problem.

As the World Bank points out: “Striking the right balance between protecting the poor and ensuring sustainable public finances,
including at subnational levels, will be a key policy challenge in 2021.”
Considering this, our policy options are:

1. Proximity Increment: Que los policy makers se desplacen a las regiones a las que
están ayudando
2. Specialized Council: Que los policy makers y los grupos a los que se ayuda
trabajen conjuntamente para resolver los problemas
3. Understandable and accessible Policies: creating more easily understandable
policies

RECOMMENDATIONS:
Chosen Policy:
1. PROXIMITY INCREMENT: Que los policy makers se desplacen a las regiones a las
que están ayudando

Pros and Cons

1. It’s difficult to help Brazil’s private savings given that inflation and
unemployment rates don’t incentivize them.