Participatory Budgeting In Brazil : Decentralization And Policy Innovation[i]

 

-- Celina Souza

 

Introduction

 

The wave of redemocratization, decentralization and policy innovation that overtook Latin America in the 1980s has followed different paths and produced varying experiences. Although the region shares common problems and agendas, there are different examples that may distinguish the way redemocratization, decentralization and policy innovation have developed. In many Latin American countries, redemocratization went hand-in-hand with political and financial decentralization to state, regional, and local governments. In many countries decentralization meant the participation of local communities in the decision-making process. As a result, local governments were able to introduce new policies and experiences.

 

Brazil is an example of redemocratization, decentralization, and policy innovation regarding local policies and the participation of local communities. In the case of financial decentralization before the 1988 Constitution, the federal government had a share of 44.6% of all public revenue. After the constitution, this dropped to 36.5%, representing 5.7% of GDP. The states share increased from 37.2% to 40.7% (6.3% of GDP) and the municipalities from 18.2% to 22.8% (3.5% of GDP). In terms of expenditure, subnational governments are now responsible for 62% of payroll expenditure and for 78% of public investment. Although a new macroeconomic agenda was introduced in the late 1990s, leading to a relative re-centralization of resources at the federal level, local governments still retain a large share of public resources as opposed to the states, which have their share reduced vis-à-vis the federal and the local spheres. Currently Brazil’s 5,560 municipalities receive around 15% of federal government’s resources while in Mexico, for instance, it is around 3%. These figures show that the position of Brazilian local governments is highly privileged when compared to other developing countries. This means that local governments enjoy reasonable room for introducing innovative policies.

 

Redemocratization went hand-in-hand with schemes aimed at the participation of local citizens. Along with the 1988 Constitution, several governmental programs and programs financed by multilateral organizations provided mechanisms giving access to grassroots movements to take part in some decisions at the local level and to oversee local programs. As a result, local governments have many avenues of participation, ranging from community councils, overseeing the implementation of education, health, and social welfare policies, and implementing Participatory Budgeting (PB). The latter has been praised, both nationally and internationally, as an example of good governance. However, because Brazil is characterized by a high level of regional, economic and social inequality, the capabilities of local governments to respond to decentralization and to participatory schemes are highly uneven.

 

What is Participatory Budgeting?

 

PB is a state-led policy carried out mainly by local governments. Leftist parties, particularly the Workers’ Party (PT), introduced it soon after redemocratization. However, PB is a governing programme not instituted by local legislation. Instead, local governments hire community organisers, which mobilise participants that make up PB infrastructure. Local legislators do not work with citizens in appropriations and budgeting subcommitees at PB’s level. By 2000, PB was adopted by over 140 municipalities despite the ideological position of the governing party. However, this is still a relatively small number considering the number of Brazilian municipalities.

 

Throughout the years, resources allocated through PB have increased but are still small vis-à-vis other expenditure - consumption, debt, payroll, etc. The figures on PB investments vary greatly by city and year. For instance, in Porto Alegre it varied between 17% in 1992 to 21% in 1999 of the total budget. In Belo Horizonte half of the local resources for investment were allocated according to the decisions made by PB (around US$ 64 million in 1999).[ii]

 

Resource allocation through PB is decided by community representatives, which are generally from low-income districts. Each city adopts different formats for investment criteria, how to select community representatives, and how to deal with the city government its bureaucracy and councilors. In general, community representatives decide on investment priorities. There are distributive criteria to assure an equitable distribution of resources so that poorer areas receive more funding than the well-off ones regardless of what the representatives want. As for resources, PB participants do not have control of the entire budget. Instead, PB participants mostly make decisions on infrastructural investment.

 

PB’s main strengths and constraints

 

There is a consensus in the literature that, although there are problems, tensions, and unexpected results deriving from PB it is an important step with implications regarding the state’s role in facilitating citizen participation in policymaking. While risking an oversimplification of the merits and problems of PB, Box 1 presents a summary of the main strengths and weaknesses found in the literature regarding PB experiences. These strengths and weaknesses reflect especially on the situations of Porto Alegre and Belo Horizonte, which are two Brazilian cities where PB has been carried out since early 1990s.

 

Box 1 - Summary of PB's main strengths and weaknesses according to selected literature

Strengths

Weaknesses

·         Makes representative democracy open to a more active participation of segments of civil society ·         Reduces clientelism, populism, patrimonialism, authoritarianism, therefore changing political culture and increasing transparency ·         Stimulates associativism ·         Facilitates a learning process that leads to better and more active citizenship ·         Inverts priorities away from the best off to benefit the majority of the population (the poor) together with attempts to open participatory channels to other social classes ·         Provides a means of balancing ideological concerns for promoting citizen empowerment with pragmatic responses to citizens' demands ·         Provides a structure that can carry over beyond a governmental term ·         Encourages program participants to move from individualistic views to solidarity and to see city problems in universal rather than personal terms

·         The interaction with government puts the community movements' independence at risk ·         Forms of clientelism  still survive ·         Civil society is still developing ·         Financial limitations and resources for PB are still scarce, limiting the scope of the programs ·         Communities tend to stop participating once their demands are met ·         Difficulties persist in broadening participation: the very poor, young people and the middle-classes are underrepresented ·         Programs disappoint participants because of the slow pace of the public works ·         PB risks reification of the popular movement, making difficult to maintain a clear separation between its role and that of government ·         Fragmented decisions and short-term demands may jeopardize urban planning and long-term projects

 

Debating some results and claims

 

PB is a state-sponsored program well accepted in some Brazilian cities. Such approval is probably one of the reasons for the re-election of the governing coalitions that have implemented it.[iii] The constant changes in its rules, procedures, and function show that PB has been a learning process for all those who have taken part in it.

 

PB has been held up as a pioneer model by many in the left across the world despite the fact that similar management experiences have been implemented in townships across the United States and even in Brazil during the military regime. However, the number of people involved in the decision-making process currently in Brazil’s has no parallel compared to past experiences.

 

PB has been seen as a great success particularly among left-wing activists. However, the analyses and descriptions that document PB’s positive affects are somewhat dubious. In particular, these analyses and descriptions might overestimate the success of the program. They also tend to hide its complexity. This article argues that some claims regarding PB deserve more careful attention and further research.

 

The empowering of the poor claim

 

Data and analyses on PB show that low-income groups, but not the extremely poor, have gained influence on decision-making by through allocation of a percentage of public resources. Although this percentage is a small part of the total budget, it is an important step in bringing infrastructure to communities that dramatically lack them. However, the issue of limits on financial resources available for these programs is more crucial than it may seem at first glance. Regardless of the intention to reverse priorities and transform spending on the cities' poorer areas into rights and not favors, municipal governments with PB still cannot meet even a small fraction of the needs of poor communities.

 

In this sense, the most valuable feature of PB is that it extends participation and decision-making power to formerly excluded groups. Having noted the financial limitations, another issue of resource allocation remains: in extremely unequal societies like Brazil, low-income groups are spending a considerable amount of time and effort debating the allocation of public resources. This is in fact empowering. However, the basic infrastructure is not readily available for low-income groups like it is for the middle and upper classes. To participate at this level, low-income groups are required to fight to acquire it.

 

The claim that PB empowers the poor is also challenged by the income level of the participants. Although PB is not reaching the very poor, it is achieving another important target: it is redirecting resources to neighborhoods that have historically been excluded from significant governmental action. Previously, the only way these neighborhoods would receive any public investment was by building close ties with local councilors or the executive in electoral years. Furthermore, investment in these districts was offered to dwellers as a political favor and not as their right. With little government support, these neighborhoods were either left to their own destiny or were taken over by gangs and Mafia-type organizations. The claim of empowerment of the poor could then be refocused to see PB as a way of compensating for the historical neglect by Brazilian local administrations of low-income areas.

 

The blow against clientelism claim

 

There is a claim that one of the reasons for the success of PB rests on the programs' core values: credibility, trust, transparency, accountability, empowerment of ordinary citizens, solidarity, etc. Many add to this list a claim that PB reduces what it is seen as one of Brazil's main problems: a political culture based on clientelism. However, clientelism seems to be still alive in some cities that have adopted PB. On the other hand, efforts to improve arbitrary rule setting that has taken place as PB took root in some cities may indicate that it is possible to insulate PB from clientelism.

 

The empowerment of the disorganized claim

 

The claim that PB has empowered the disorganized is challenged by data showing that a significant number of PB participants were engaged in community activism prior to PB. The claim, therefore, should be refocused to interpret PB as helping to sustain a political activism for low-income groups. Changing the focus of the claim does not imply reducing the importance of PB's achievements, especially in highly elite-driven countries.

 

The political will claim

 

The claim that the adoption of PB is a result of the political also deserves deeper thought. Explanations based on voluntaristic approaches are problematic. First, they assume that it is possible to change reality through the action of a few groups or leaders. Second, they do not take into account the web of circumstances, legacies, and conditions that are involved in any kind of political action. The issue of political will should be redefined: some administrations have chosen PB as their hallmark because the program provided an opportunity to broaden governing coalitions. The pay-off of this option has been the successive electoral victories of administrations that have given priority to PB, at least for several governmental terms.

 

The increase in political representation claim

 

The role of PB vis-à-vis that of local councilors is at the heart of the current dilemma regarding the functioning of a representative system in a democratic, heterogeneous, and participatory environment. In the case of PB, councilors are required to convey their prerogative on how to allocate resources to their communities with organized movements. This means that local councilors and the local elite they represent lose their monopoly in the representation of local interests and their role as one of the main actors in decisions regarding the allocation of public resources. The issue of what representation is about does not affect local councilors alone. There are references to problems of accountability and transparency between community representatives and those they represent. As a result, conflicts between elected councilors and the participatory budgetary process, as well as between community delegates and those they represent are producing an underlying tension that has not been resolved in most cities.

 

PB as a stable experience claim

 

The evolving number of municipalities adopting some kind of PB scheme has been impressive: in the period 1986/1998, there were two examples, in 1989/1992, twelve, in 1993/1996, 36, and in 2000, PB had been introduced in 140 municipalities, according to a national survey. Out of these examples, 80 started in 1998, when the first PB examples after redemocratization in Porto Alegre started to gain national and international visibility.

 

The same survey, however, also concluded that PB in this case is difficult and unstable. In the period analyzed, 23 administrations gave up on PB, a higher figure than that for administrations that introduced it over the same period, which were nine.

 

A concluding note

 

Whatever the merits and constraints of the Brazilian experience, it is important to note that there is no single "model" of participatory budgeting, but rather a collection of examples that have acquired different features. Maybe the greatest risk PB poses, both in Brazil and in other countries experimenting with it, is to become just another bandwagon phenomenon. The main strength of PB seems to be the insertion of marginalized people and communities, albeit only a minority of them, into the political process for the first time. But allowing these citizens the right to decide (and not only to be heard) may well have a long-term impact on countries with a highly unequal balance of power. In this sense, the experiences on participatory budgeting can be seen as a step towards deliberative democratic institutions, a crucial aspect of the agenda of recently redemocratized and elite-driven countries.