Participatory Budgeting & Direct Democracy

The people of the Brazilian city of Porto Alegre manage their affairs somewhat differently than do the folks in your hometown. Like citizens of any democracy, the residents of this largely middle-class, waterfront city elect leaders to oversee city affairs. But when it comes time to decide how to manage the city’s budget, the residents of Porto Alegre put a twist on things. Instead of leaving all the decisions to their elected officials, the citizens are key players in the process, directing how the city budget will be allocated. Through an intricate series of town hall meetings and community councils, the residents decide for themselves how to spend the city’s resources.

If you’ve ever complained about how your tax dollars are being used, you should keep reading.

The Porto Alegre system is called “Participatory Budgeting.” The idea got its start in 1989, when the members of the left-of-center Workers’ Party were elected to the city’s leadership. In an effort to dispel the atmosphere of autocracy that dominated Brazil during the country’s dictatorship, the mayor and city council decided to give local residents a greater say in how the city’s revenues would be spent. The city established a system of neighborhood assemblies that would set priorities on how the city should use its money.

The pioneering system rested on a very basic principle of democracy: If the primary function of government is to equitably distribute community resources, then the citizens should play a central role in deciding the use of those resources.

“The citizen’s participation is not limited to the act of voting to elect the executive or the legislators, but also decides on spending priorities and controls the management of the government,” Ubiratan de Souza, one of the co-founders of the Participatory Budgeting process, has written. “[The citizen] ceases to be an enabler of traditional politics and becomes a permanent protagonist of the public administration.”

The Porto Alegre experiment has since spread to communities around the globe. Today, approximately 200 local governments worldwide have some sort of participatory budgeting system in place, from Montevideo, the capital of Uruguay, to Cordoba, Spain, to the Andean town of Cotacachi, Ecuador. The concept is largely unknown in the United States, but a few local jurisdictions—such as Seattle and Prince William County in Virginia—have experimented with increasing citizen involvement in the budgeting process.

This system of grassroots decision-making has gained international recognition as an important mechanism for promoting transparency, accountability and citizen participation—all cornerstones of democratic governance.

“By giving a voice to citizens, particularly the urban poor, in defining their needs, participatory planning reinforces ownership in decision-making processes and promotes social cohesion and citizenship,” Angelique Habils, a United Nations officer at the UN’s Nairobi office, told us. “Most participants of Participatory Budgets agree that one of the most important benefits is the deepening of the exercise of democracy.”

Because Participatory Budgeting rests on the ideal of community control, the particulars of each city’s system vary widely. Many cities, like Porto Alegre, identify priorities by geography; each neighborhood holds an assembly to discuss and agree upon community needs, and then elects delegates to a municipal level budget council that sifts through all of the proposals.

Other places, such as the Brazilian coastal city of Icapui, divide the budget thematically—there are separate community meetings to discuss healthcare, education, the physical environment, and the needs of youth and the elderly. While most Participatory Budgets rely on individual citizen involvement, others engage people via existing non-governmental organizations such as unions and community centers. Some European cities select budget delegates by lottery in order to involve people who are normally excluded.

The amount of money at stake also varies. Most citizen assemblies have control over about one-fifth of the total budget. In Montevideo, a city of more than 1 million people, citizens decide more than half of all city funds. Residents of Mundo Novo, Brazil (population 16,000) meet in open town meetings to discuss every single item in the budget—including the mayor’s salary.

There are immediate benefits of these deliberative processes. The first is an expansion of services to poor communities. For example, Montevideo found that Participatory Budgeting led to an “inversion of priorities” in which the poorest neighborhoods began to receive a larger portion of funds. Another benefit is increased civic participation by historically marginalized groups; women tend to play a larger role in community budgeting processes than they do in electoral politics. In Belem, Brazil, the budget council holds special meetings for Afro-Brazilians, children, and gays.

An important improvement that accompanies Participatory Budgets is an increase in city revenues. In Cuenca (Ecuador) and Campinas and Recife (Brazil) there was a significant growth in tax payments within a few years of instituting the process. This isn’t surprising. If you are in charge of spending your own money, you are more likely to pay your full share of taxes.

But probably the most valuable benefit is something that isn’t easily quantifiable: a feeling of individual empowerment. As citizens take control of their community resources, they feel a greater sense of ownership over their city. Civic participation leads to more civic participation, creating a kind of virtuous feedback loop.

“I was absolutely pleased and excited that our bid was successful, and that many other bids were successful in the whole process,” Naweed Hussein, a resident of Bradford, England, told a local interviewer after a neighborhood budget assembly decided to fund a mosaic near his community garden. “I think it’s been a very fair process. If we can continue using such practices in sharing the budget and looking at budgets together, I think we could accomplish many things.”