CIDADE Participatory Budgets

below: two sides to the issue

Since 1994 CIDADE has been actively involved in the Participatory Budget has been going in Porto Alegre since 1989, and has been a major instrument in the democratization of municipal budgets, which are formulated with the direct participation of the public in setting priorities for public investment.  An innovative experience, it breaks radically with the practice of elaborating the municipal budget inside official meetings, through this method the public are part of the decision making process for management of their local area.

This decision-making space which was created for discussion of municipal investments in works and services becomes a space for social contracts, which operate as regulators of rights and as a building block for a culture of public democracy.  The example of Porto Alegre has demonstrated a concrete possibility for the construction of an active citizenry qualified in the management of public resources, capable of formulating propositions for the city which seek to overcome social exclusion. 

The Participatory Budget Process, through participation and ‘fiscalisation’ of the society, becomes increasingly an important instrument to combat corruption and nepotism. 

In the 1988 elections the Popular Front, an alliance of left-wing parties, won the municipal elections in Porto Alegre.  Their first commitment was to the democratization of the State with the active participation of the population.  To transform this ideal into practice the municipal government, in its first year of office, created a new system for formulation of the budget, the Participatory Budget. 

Breaking with the tradition of elaborating the municipal budget behind closed doors, with the input only of technocrats and politicians, today in Porto Alegre the budget is created with broad debate throughout the year, where the values of revenue and expenditure and the local priorities for investment are decided.

The first difficulty of the PB was the rationalization of the city, in the first place the city was divided into four zones, in no way correlating with the divisions as seen by the popular movements.   After various meetings with community leaders the city was divided into 16 zones and with internal divisions called micro regions.  

Participation in the budget process has increased since initiation in 1989 as the population has become more hopeful about the process and relations with the government.  It was not until the new administration managed to shake off the last influences of the previous government in the budget structure and reacquire investment capacity that participation began to grow rapidly. 

Since 1991 the participatory budget has been a story of increasing mobilization of communities in all regions.  It is now a nationally and internationally renowned study of best practice in public administration.

year

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000
Participants

628

3.086

6.168

6.975

8.011

8.495

7.653

11.075

11.790

14.776

14.408*

source: CRC - PMPA / * figures for 2000 are from CIDADE

TWO SIDES TO A HOT ISSUE 

Participatory budgeting is often presented as an inherently superior approach to handling municipal finances. But it has legitimate critics among Latin American
mayors, accounting professionals and international experts. Below is a summary of arguments for and against.

FOR PARTICIPATION:

Transparency: Opening the budget to public scrutiny reduces the possibilities of corruption.
Accountability: When citizens participate, they have a clearer idea of expected benefits as well as limitations.
Efficiency: Chances increase that money for public works will be spent where citizens feel it is most needed.
Equity: The poor tend to participate more than the rich, spurring investments in low-income areas.
Budget balancing: Participatory budgeting typically increases spending on investments and reduces the amount spent on government salaries.

AGAINST PARTICIPATION

Manipulation: The governing political party can use the budgeting process to build popular support and improve its reelection prospects.
Sustainability: If a political party that gains office is not committed to participatory budgeting, the process dies.
Skewed power balance: Legislative bodies lose power when popular assemblies play a large role in the budget process.
Stagnation: Long-term development goals may be ignored in favor of more immediate neighborhood needs.
Co-optation: Since citizens feel like stakeholders in government operations, they are less likely to criticize the system.

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