The Participation and Civic Engagement Team works to promote poverty reduction and sustainable development by empowering the poor to set their own priorities, control resources and influence the government, market and civil society institutions; and influencing governmental and private institutions to be responsive, inclusive, and accountable. Note No. 71 March 2003 Case Study 2 - Porto Alegre, Brazil: Participatory Approaches in Budgeting and Public Expenditure Management Brazil : Participatory Budget Formulation in opposed dictatorships formed the Workers Party Porto Alegre1 (PT) to seriously take up the agenda of deepening democracy through "popular administration" of government. Having won several municipal Background elections in 1989, including Sao Paolo with over 10 million people, the PT began a creative Run by dictators for over 20 years (1964-1985), experiment of engaging a wide spectrum of Brazil only had a democratic constitution people to formulate city budgets. The Porto promulgated in 1998 that allowed an already Alegre case has, in particular, having been active civil society to function more freely. A nominated by the 1996 UN Summit on Human country of 156 million, Brazil has been dubbed Settlements in Istanbul as an exemplary `urban one of the most unequal, with one of the largest innovation', stood out for demonstrating an numbers of poor people among comparable efficient practice of democratic resource middle-income countries. After the end of management. The largest industrial city in Rio dictatorship in 1998, people who had earlier Grande do Sul with 1.3 million inhabitants, Porto Alegre has a local economy worth over US$ 7 billion, and for long has had a reputation for 1Draws on De Sousa Santos, B. "Participatory Budgeting in Porto Alegre: Towards a Redistributive Democracy." Politics and Society hosting a progressive civil society led by (26), 1998; Avritzer, L. "Public Deliberation at the Local Level: intellectuals and labor unions experienced in Participatory Budgeting in Brazil", paper delivered at the mobilizing people to partake in public life, Experiments for Deliberative Democracy Conference, Wisconsin, January 2000; Baiocchi, G. "Participation, Activism and Politics: including opposing authoritarianism. the Porto Alegre Experiment and Deliberative Democratic Theory", University of Wisconsin, November, 1999; Cagatay, et. al., "Budgets as if People Mattered: Democratizing Macroeconomic Process Policies", UNDP, May 2000. ___________________________________________________________________________________________________ This note was prepared by Swarnim Wagle and Parmesh Shah of the Participation and Civic Engagement Group in The World Bank as a case study input on "Participatory Approaches in Budgeting and Public Expenditure Management" for the Action Learning Program on "Participatory approaches at the Macro Level". Further details and documents related to this Action Learning Program are available at www.worldbank.org/participation The views expressed in this note are those of the author(s) and do not necessarily reflect the official policies of the World Bank. demands are ranked on an ascending scale of 1 to The municipal power structure is such that the 5 by the participants4. These are then aggregated mayor's office serves as the executive, and the by the executive5 together with points earned Chamber of Deputies as the legislature. through two other criteria: i) need ­ measured by Municipalities have considerable autonomy over how much of access a region has had to a their revenues (raised through local taxes, tariffs, particular service, and ii) population size. and federal transfers) and expenditures. The Maximum points that can thus be attained is executive prepares the budget, which then has to fifteen: 5 points if a region has had less than 20% be ratified by the Chamber. Two institutions at access to a service, 5 if it has more than 120,000 the mayoralty ­ the planning office (GAPLAN) inhabitants, and 5 if people rank it top on their and the Coordination of Relations with the list of demands. Communities (CRC) ­ manage budgetary debates with city residents. While CRC works through its The second round takes place in July when two regional coordinators with community leaders to councilors (and two substitutes) are elected from set up discussion assemblies and to aggregate all 16 regions (32 delegates), from all the 5 community claims, the responsibility of squaring themes (10 delegates), in addition to a member citizen demands with technical and economic each from the civil servants' trade-union and an viability lies with GAPLAN. umbrella organization of neighborhood communities (2 delegates) to constitute a 44- The city is divided into sixteen regions, and member Council of Participatory Budgeting topics for discussion into five themes: i) (COP), which is essentially the main transportation, ii) education, leisure and culture, participatory institution. These Councilors then iii) health and social welfare, iv) economic familiarize themselves with the state of municipal development and taxation, v) city organization financing, debate criteria for resource allocation, and urban development. There are two rounds of elaborate their constituents' demands, and revise plenaries in each region and on each theme held the budget proposal prepared by GAPLAN and each year. The citizens meet around March just the mayor's cabinet. For these tasks, the COP before the first round of formal assemblies to convenes for two-hourly meetings once a week gather demands of individual citizens2 and until September 30 when a final budget proposal mobilize the community to select regional is submitted to the legislature. Between delegates. The municipality is not involved in September and December, the COP follows the these intra-community discussions. The first debates in the Chamber and lobbies intensely, round of meetings between the citizens and the while working on a detailed investment plan that executive follows in April, in the presence of the lays down all specific public works and mayor, to review investment plans of the corresponding amounts to be allocated to each previous year, discuss proposals for the new year, region. The executive drives the COP process by and to elect people to the Fora of Delegates for coordinating the meetings, setting the agenda, subsequent deliberations3. Between the first and having its departments present information the second rounds (March to June), informal before allowing interventions from the preparatory meetings are held to discuss demands Councilors to seek clarifications. In the end, the for investment in sectors as presented by the way resources get divided is through a weighting various community associations (unions, system that combines the subjective preferences cooperatives, mothers' clubs, etc.). These 4Five sectors are ranked in order of preference from a list of 12 2The number of participants rose from under 1000 in 1990 to over consisting of sewage, housing, pavement, education, social 14,000 in 1996 in the two rounds of assemblies. Including informal assistance, health, transportation, city organization, sports, leisure consultations, almost 8% of the city's population ­ 100,000 - might areas, economic development and culture. A sector can be sub- have been engaged in some way in these participatory processes, divided, like housing into land legalization, relocation, urbanization, reflecting the effectiveness and credibility of the process. etc. 31 delegate is chosen for every 10 people if up to 100 people attend; 5In 1999, under the need criteria, 80% previous access to a service 1 for 20 if 101-250 people attend, 1 for every 30 if 251-400 people earned 1 point with under 20% access earning the full 5; similarly attend, and so on, with 1 delegate chosen for every 80 people if grades earned increases with population, and with increased more than 1000 people attend. preference of the community. of citizens with the objective quantitative criteria. translating political decisions into distributed Annex I is illustrative of this useful method, and resource. The poorest region of the city, Ilhas annex II summarizes the cycle of deliberations. with around 5000 people, for example, has the same decisional weight as the wealthiest region, Results the Centro, with nearly 300,000 people8. Around 40% of the people participating in the Since 1989, the Workers Party has won three deliberations have been seen to have modest consecutive municipal elections in Porto Alegre, household incomes of one to three times the which stands out against a record of well-known minimum wage. There is a fair gender balance, electoral failures of comparable leftist municipal although presence of women decreases at higher administrations across Latin America6. Its share decision-making tiers. The middle-class people of votes has also risen sharply, from 34% in 1988 who were skeptical of the `demagogy' of the to over 56% in the 1996 elections. An influential Worker's Party in the early years, have now business journal has nominated Porto Alegre as begun to actively participate partly after seeing the Brazilian city with the `best quality of life' that the city has been supportive of services that for the fourth consecutive time. A city in an this class cherishes (like garbage collection and indifferent financial state before 1989 because of public spaces) lending a hand to a `trans-classist' de-industrialization, in-migration, indebtedness revival and pride in the city9. and poor revenue base, not only have these indicators been improved with major fiscal A notable change in attitudes of technical staff, reforms between '89-`91, but it has witnessed well-versed in matters of budgeting and some spectacular achievements in recent years, engineering, has also been observed as a result of credit for which has largely been given to the their increasing interface with lay citizens. Called participatory budget process. Between 1989 and a jump from `techno-bureaucracy to techno- 1996, the number of households with access to democracy', the technical staff have changed the water services rose from 80% to 98%; percentage way they communicate with the communities and of the population served by the municipal sewage have tried to make themselves understood in system rose from 46% to 85%; number of simple language. Lively debates have been children enrolled in public schools doubled; in witnessed between the increasingly assertive the poorer neighborhoods, 30 kilometers of roads delegates and staff over the latter's technical were paved annually since 1989; and because of criteria and solutions proposed. But still it has transparency affecting motivation to pay taxes, been said that they are perhaps more interested in revenue increased by nearly 50% (budget making themselves understood than listening to resources for investment only went up from US$ what people say, for delegates have complained 54m in 1992 to US$ 70m in 1996). Over 80 even in COP meetings that some information Brazilian cities7 are now following the Porto continues to be withheld from them in the pretext Alegre `model' of participatory budgeting, with of technicality, despite laudable attempts in the neighboring city of Viama even willing to general to make much of that accessible to lay cease its independent identity to turn itself into a people. Overall, from a protest-based culture of region within Porte Alegre. the 80s, these participatory budget exercises have fostered a more `civil' and less disruptive form of The Porto Alegre experiment also presents a conflict resolution through dialogue and strong example of democratic accountability, negotiations. equity, and re-distributive justice, with the participation part guaranteeing legitimacy to Concerns decisions, and objective budgeting ensuring fairness in an otherwise arbitrary process of 8This is so because, almost everyone in Ilhas is considered `needy', while in Centro, only around 7000 of the 300,000 people are 6Baiocchi (1999) cites Sao Paulo, Fortaleza, Florianopolis in Brazil, considered `needy'. and Caracas in Venezuela, as such failures. 9This trend has been compared with a similar Spanish experience in 790% of which are run by the Worker's Party. Barcelona. How best to strike a fine balance between see their role in the process as mere formality, participation and quality representation has been and resent the fact that a representative sitting in raised as an issue with particular concerns the COP elected usually by a fewer number of expressed over such risks associated with the voters through a constitutionally unrecognized latter as manipulation of assembly mandates and process has more influential powers in this professionalization of short term elected posts. exercise than a legally elected legislator. The But on grounds of efficiency, the executive has Chamber is also not allowed to debate specific insisted on the need for a narrower representative works and projects, giving the executive much form of democracy, increasing the ratio of leeway in budget execution. Proponents of the representation with increased number of participatory process counter argue by saying that attendees, while citizens have continued to it was precisely because the Chamber was demand more representatives on the Council. abusing the budget process by i) never This has created tensions, with some claiming deliberating substantively, and ii) promoting a that the government has co-opted the popular `clientelist' system of distributing budgetary movement and subjected priorities to the largesse to vote banks, that a parallel structure executive's political maneuvers through the COP, that was more in tune with people's needs had to which is a relatively small forum of only 44 be created. members. As the process has widened to include discussions on not only infrastructureprojects but also A point that has also been raised is that as topics like culture, questions such as, to what participation gets socially institutionalized, extent do the delegates reflect popular opinion common citizens may be replaced by specialized have been asked. Also, serving at the COP `participatory citizens' to take part in the process. demands an intense voluntary, non-remunerative While this risk calls for occasional `reflective commitment. This is both a strength and a self-subversion', attempts at `radicalization' in weakness, with the latter manifest in serious order to moderate the `routinization' of the absenteeism of delegates in important meetings process presents, as Dos Santos argues, an that often require voting. `indeterminable threshold' beyond which radicalization could begin to compromise the The practice of participatory budgeting in Porto success of the experiment10. Alegre has no constitutional recognition ­ it still is a mayoral initiative with no decisive power to set the agenda, timing, and debates. Conflicts regarding the agenda have often arisen in the past with councilors demanding to see more than what the executive has been willing to share (the executive points out that the COP has parochial interests, while it's mandated to serve the `whole' city). Similarly, councilors have complained about the limited time given to them to process information and consult for ideas, provoking a charge that the COP is being manipulated to legitimately endorse pre-determined executive programs. A bigger tension has, however, emerged between the participatory process and the legislature which feels increasingly insecure with the former's growth in popularity and influence. While the Chamber can potentially reject the budget presented by the executive, it finds it difficult to do so because the budget package it receives embodies a substantial degree 10De Sousa Santos, B. "Participatory Budgeting in Porto Alegre: of popular endorsement. Some legislators thus Towards a Redistributive Democracy." Politics and Society (26), 1998. Annex 1: The Arithmetic of Equitable Annex 2: Yearly Cycle of Participatory Democracy in Porto Alegre Budget Formulation and Monitoring In 1997, the 16 regions of the city expressed differing March: Informal citizen gatherings to collect levels of interest in seeking investment for street demands; no interference from the executive (mayor's pavement which later determined how much money office). they received for the sector. The amount distributed April: First regional plenary held between the citizens depended on three criteria and a relative weight for and the mayor's office to account for previous year's each. Take two regions: the Extremo Sul, a region projects, discuss new proposals and elect delegates to with 80.21% need for pavement, and the Centro, with the second round. 0.14%. Under the need criterion, with a general April to June: Intermediary meetings for delegates to weight of 3, the Extremo Sul received the highest learn technical criteria and discuss needs and priorities grade (4) and so got 12 points (3 x 4), while Centro, in each region; informal preparatory meetings held with the lowest grade (1) got 3 points (3 x 1). Under with citizens and civic associations who rank their the population criterion, which carried a weight of 2, demands. The executive aggregates these together the Extremo Sul, with a population of 20,647 with two other criteria: i) how much access a region inhabitants, had the lowest grade (1) and hence got 2 has had to a service, and ii) what its population size is. points (2 x 1), while the Centro, with a much bigger June: Second plenary held when Councilors are population (293,193 inhabitants), had the highest elected and regional priorities voted. grade (4), getting 8 points (2 x 4). Finally, under the July: 44 Councilors installed at the Council of criterion of priority, which carried a general weight of Participatory Budgeting (COP) ­ 2 from each of the 3, the Extremo Sul gave the highest priority to 16 regions, 2 from each of the 5 themes and 2 other pavement earning grade 4, and ending up with 12 reps. points (3 x 4), while the Centro gave a very low July to September: Council meets for at least two priority grade to pavement, thus receiving no points (3 hours a week to discuss chosen criteria, demands of x 0). As a result, the total sum of points of the their constituents, allocation of resources as proposed Extremo Sul for street pavement was 26 points (12 + by the mayor's office, etc. 2 + 12), while the Centro's total sum was 11 points (3 September: New budget approved by the COP, and + 8 + 0). Since the total number of points for all sent to the legislature for debate and endorsement. regions was 262 points, the Extremo Sul received September to December: COP follows the debate in 9.9% of the investment, that is, 1,985 meters of street the Chamber, and lobbies, while working separately pavement, while the Centro received only 4.2% of the on a specific sectoral investment plan for different investment, that is, 840 meters of pavement. regions; rules are also set for next year's round of meetings. Source: De Sousa Santos, B. "Participatory Budgeting in Porto Alegre: Towards a Redistributive Democracy." Politics and Society (26), 1998. "Social Development Notes" are published informally by the Social Development Family in the Environmentally and Socially Sustainable Development Network of the World Bank. 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