Learning about the Enforcement of Conditional Welfare Programs: Evidence from the Bolsa Familia Program in Brazil∗

Evaluations of government programs or policies provide estimates of the combined effect of formal program rules and the quality of implementation of these rules. To improve the design of policies or to make predictions about the success of a policy in a different context, it is crucial to disentangle the role of formal rules from the role of enforcement of these rules. Despite the fact that in many contexts enforcement is not perfect, this important dimension has received very little attention in the literature. In this paper we study the implementation of a large-scale government program “Bolsa Fa-milia ” in Brazil, which conditions transfers to poor families on children’s school attendance. We analyze whether and how people learn about the quality of enforcement and how this affects their behavior. We find that individuals finetune their behavior in response to signals about the quality of enforcement of program conditions. They learn both from private signals, ob-serving the consequences of own noncompliance, and from public signals, that is observing the consequences from peers ’ noncompliance. Thus we show that enforcement does not only have a direct effect on the family affected, but also important spillover effects on other families, who learn from the experiences of their children’s peers