“PARTICIPATORY BUDGETING”: INCREASING
CITIZEN INVOLVEMENT IN MUNICIPAL DEVELOPMENT STRATEGY FORMULATION
A CASE FROM THE SOUTH: PORTO ALEGRE, BRAZIL
Limited economic power is often accompanied by limited
political power. Families with sparse financial resources may find
it difficult to make their voices heard, and the poor are frequently
underrepresented in the political process. This disparity in public
sector participation tends to be reflected in the decisions made by
national and local authorities, which often do not promote the interests
of the marginalized.
Without an avenue for local political participation, disadvantaged
populations are unable to affect change and may thus find it impossible
to ameliorate their own living conditions. Without the full participation
of its citizenry, a government is unable to fulfill its mandate as
the people's elected representative. It is therefore in the interests
of both municipalities and marginalized populations to facilitate
the political participation of the latter.
An innovative mechanism for such participation was established in
the city of Porto Alegre, Brazil. The municipality developed a system
called Orçamento Participativo, or “Participatory Budgeting”,
that has since become a model for similar programs not only in Brazil
but also in Latin America at large. Participatory Budgeting provides
a method through which the entire community can participate in the
process of governance. It also demonstrates that a truly democratic
and transparent administration of resources is one of the most effective
ways to avoid the corruption and mishandling of public funds and to
ensure that investments are directed towards the most pressing needs
of the most number of people.
Context
Porto Alegre (pop. 1,290,000), the capital of the State of Rio Grande
Do Sul, was a city characterized by high levels of income inequality,
minimal transparency in government transactions, inefficient management
of municipal resources, and low levels of electorate participation
until the election of Mayor Olivio Dutra in 1989. Mr. Dutra initiated
a change in municipal administration by implementing a sweeping program
of tax reform that also increased tax revenue. Tax and tariffs were
rationalized and indexed to inflation, and their collection was made
more organized and efficient. There was also a dramatic change in
property tax collection, which went from constituting about 5.8% of
municipal revenues in 1990 to more than 18% in recent years. The increased
willingness of people to pay taxes has been attributed to the transparency
in municipal spending brought about by participatory budgeting. In
1993, Tarso Genro was elected mayor and brought a renewed enthusiasm
to the reform process.
The Participatory Budget -- How It Works
The driving force behind the budget reforms was this program of Participatory
Budgeting (OP for short). OP is a voluntary and universal mechanism
whereby any resident of Porto Alegre, whether individually or part
of an organization, can participate in the design and execution of
the municipal budget.
OP compliments the elected Chamber of Councilmen and Mayor by serving
as a third municipal branch composed of civil society members. The
city is divided into 16 regions, each of which forms a “Popular
Council,” which in turn consists of is representatives from
community associations and other local groups. These local councils
convene to elect two delegates to the city-wide OP Council of Representatives.
The elected municipal government assigns several city officials to
act as liaisons to this council.
The OP Council of Representatives sets the agenda for municipal spending
by compiling a list of priorities for public works. The agenda of
each individual OP Council representative is set in consultation with
elected delegates (called Regional Delegates, elected one per every
30 citizens) from his or her region. Before they come to any decision,
the OP Council of Representatives and Regional Delegates hold multiple
forums wherein any member of the region can come with general input
or demands for specific projects like school construction or road
pavement.
After gathering the ideas and suggestions of their constituents,
the OP Council of Representatives and regional delegates sit down
with elected officials to assign in ranking each of the proposals
that have been put forward. The rankings are based on (i) what percentage
of the population and area of the relevant district(s) lacks social
services (ii) the total population of the district and (iii) the prioritizing
by of the OP Councils of Representatives. For example, a request to
pave a street that runs in front of a school will be weighted more
heavily than a similar request for a street that has only a few homes.
During Genro's administration, the public set different priorities
each year; in 1995, for example, paving 23 kilometers of streets in
slums was the top priority. Last year, the priorities were sanitation,
community street paving and housing.
The weighted system of project evaluation used in Porto Alegre is
one solution to the conflict of interests that arises in a truly inclusive
and participatory system of governance. With the interests of so many
individuals and groups represented, a method was needed assure the
systematic and fair consideration of each proposal. In addition, a
weighted system of evaluation helped transform the formerly patronage-driven
budget deliberations into a more accountable and transparent process.
The mere presence of so many community members in the resource allocation
process is enough to tie the hands of municipal officials and prevent
others from seeking favors.
Annual spending was not the only participatory aspect of the Porto
Alegre budgeting system. Thematic councils were established in addition
to regional ones, and charged with the creation of long-term strategic
plans for the city. Local organizations—including unions, environmental
groups, business associations and student movements—form these
councils and, working with municipal officials, they debate long-term
goals and programs in key areas including health, housing, transportation,
historic trusts and culture. The thematic councils set out broad policy
directions that shape municipal development over several years, extending
beyond the annual public works projects.
In addition, the OP process includes citizens' annual review of the
preceding year's budget and the effectiveness of its implementation.
This review occurs as the first round of the OP process, and it initiates
the cycle of budget negotiations for the coming year. This review
process is another way to ensure accountability and transparency in
the execution of the budget, and it verifies that the decisions made
through OP mechanisms are carried out by the municipality.
Results
By all accounts, the Participatory Budgeting system of Porto Alegre
has been extremely successful. Between 1989 and 1996, the number of
households with access to water services increased from about 80%
to about 98% and the percentage of the population served by the municipal
sewage system increased from 46% to approximately 85%. Also since
1989, 200 km of road has been paved in the city. Porto Alegre is now
the Brazilian State capital with the highest-ranked Human Development
Index.
OP was also very popular among residents of Porto Alegre. An opinion
survey about OP found that 85% of city residents either had been active
in the budget process or considered it positive. When he left office
in 1997, Mayor Tarso Genro boasted a 75% approval rating.
Orçamento Participativo has now been instituted in
fifty other Brazilian cities. Soon, the system will be implemented
in the Argentine cities of Buenos Aires and Rosario, and in Montevideo,
Uruguay.
We would like to thank Mr. André Passos Cordeiro for providing
us the information about his project.
For more information,
please contact:
Porto Alegre, Brasil
Telephone: 55 51 216 1300
Fax: 55 51 216 1308
Email: andre@gaplan.prefpoa.com.br , passoscordeiro@ig.com.br
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