Graham Smith, School of Social Sciences - University of Southampton
Aaron Schneider, Institute of Development Studies - University of Sussex
Simon Maxwell, Director - ODI
1. The last meeting of the series on Targets, Voice and Choice was held in the ODI Meeting Room on Wednesday 8 December. The speakers were Graham Smith from the University of Southampton and Aaron Schneider from IDS Sussex. The meeting was chaired by Simon Maxwell, Director of ODI.
2. Graham Smith spoke to a Power Point presentation in which he summarised his understanding of the main characteristics of the participatory budgeting experience in Porto Alegre, and some more general lessons for the UK context.
3. The Porto Alegre experience was characterised by high degrees of participation, by a high degree of agenda-setting power given to community representatives as opposed to a mere consultation process, and by repeated participation corresponding to the budget cycle. It was based on a multi-tiered system, whereby in "popular assemblies" the local population defined list of priorities and elected delegates to "regional budget forums" and councillors to "municipal budget councils". Municipal budget councils decided on resource allocation among regions and agencies, and presented budget submissions to the Municipal Council, who then decided whether to accept them or not.
4. The system contained clear incentives to participate, as the level of local mobilisation determined the size of potential investments. If more people participated, the size of the budget increased. Participatory budgeting in Porto Alegre showed that it could deliver early on, therefore getting interest from more people and more areas.
5. At the moment there were very few comparable experiences in the UK, also because some of the reasons that led to the introduction of participatory budgeting in Porto Alegre were quite specific, and had to do with the need to respond to claims of corruption and clientelism, and to the willingness of the Workers' Party (PT) to take political risks.
6. In the UK it might be also less feasible to adopt similar models because local government budgets were highly inflexible (centralised controls and targets, statutory obligations, etc), and therefore there were not many funds which could be freely allocated. Also, local strategic partnerships involved a wide set of actors which again limited flexibility. However, there was an ongoing movement for localisation and devolution of budgets.
7. Finally, in the UK civic engagement often was more about rethoric than reality, partly because local authorities did not want to cede control to citizens. Incentives to participate were also fairly limited, as people did not see a direct benefit from their involvement. Despite this, there were a number of ongoing initiatives which claimed to be adopting some of the principles and practices of the Porto Alegre example.
8. Aaron Schneider presented a series of Power Point slides focusing on some of the historical and institutional determinants of participatory budgeting in Porto Alegre, with a view to explaining the reasons that led to its adoption and subsequent development. The theoretical lens adopted was of institutions as shaping incentives for action, but at the same time being historically determined and path-dependent.
9. Participatory budgeting in Porto Alegre was the result of a wider challenge facing the left in Latin America: How to promote progressive fiscal policy without losing the support of the middle classes? When the PT came to power in Porto Alegre in 1988, it faced large opposition in the Assembly and clientelist neighbourhood associations linked to the old regime. Participatory budgeting was a way of addressing both problems in order to resolve the stalemate. While more direct citizen participation made it possible to by-pass local associations, popular approval of budget submissions meant that the Assembly could not refuse to pass the budget.
10. The introduction of the "thematic stream" of participation was also about broadening the participation base. While regional meetings were mostly addressed to representatives of poor neighbourhoods, thematic ones were directed at middle-class professionals.
11. At the State level, subsequent governments introduced a number of parallel mechanisms which often were meant to keep participation under control. For example, COREDES were set up involving organisations with strong links to the State Government. When government changed, the mechanism of Consulta Popular was introduced to keep COREDES under check, by holding referenda to define development and investment priorities. The PT was then elected at state level, and tried to mainstream participatory budgeting, encountering a lot of resistance.
12. The participatory budget experience was clearly aimed at introducing a more progressive fiscal policy, by redirecting investment towards poorer areas and the social sector. At the same time, it was attempting to keep the middle class happy, by limiting the participatory input to the capital budget, introducing more efficient planning and more transparent oversight.
13. Despite many of the advantages offered by participatory budgeting, taxes went up, the fiscal position deteriorated, investment resources were quite scarce, and some corruption scandals surfaced, tarnishing PT's image and credibility. As a matter of fact, PT had recently lost elections both at state and at local level in Porto Alegre.
14. The discussion was quite animated, and focused on issues of effectiveness, comparability and replicability.
15. One theme of discussion was about effectiveness. First, it was important to be clear about the criteria for success. Was greater participation an intrinsic good, valuable in its own right, or did the success of the scheme depend on what happened to budget expenditures? If the latter, how was the effectiveness of expenditure to be measured? For example, in one community in Peru, officials had wanted to build roads or water supply, but a participatory budgeting exercise had shown great support for a football stadium. Who was to judge which of these was most useful in the long run?
16. A related question had to do with how to compare participatory budgeting with other ways of improving efficiency, for example targets, better audit or budget tracking. The Port Alegre experience had been a response to a particular political conjuncture. Would other alternatives be better in other situations?
17. Other factors were discussed which might determine the feasibility of participatory budgeting experiences, such as the degree of capacity, both within and outside government, to manage the process and promote meaningful participation, and differences between urban and rural settings. In the latter, communication problems and distances may render similar exercises much more difficult and costly.
18. In terms of replicability, an important issue was that the Port Alegre experience had very specific characteristics, particularly the built-in incentives to participate. A participant noted that the UK had one of the most centralised budget systems in the world. In that case, what was the incentive for political leaders to release control over budgets? And even if they did, why would local authorities then pass it on to community representatives? This question spurred some discussion around the importance of the local political agenda in shaping institutional choices and policy goals in Porto Alegre, and how such choices might not be politically feasible in other contexts. Path-dependency in institutional design therefore seemed to be a key constraint to the replicability of the participatory budgeting experience, despite the widespread attention that the Porto Alegre model had received worldwide.
19. Final remarks by the two speakers focused on the issue of elite capture, describing ways in which the politically-driven design of participatory institutions was shown to be able to address this issue both in Brazil and in Peru, and on the need to move away from general "labels" of participatory budgeting, focusing instead on the correct incentives which can bring people to participate meaningfully in decisions about the allocation of public resources in different contexts.
9 December 2004
The final session of the series focuses on one particular approach to managing and delivering public services, described as participatory budgeting.
In this approach, the emphasis is on involving the public in planning and resource allocation decisions, thereby strengthening their endorsement of the way in which the public services are delivered.
Experiences from both developed and developing country examples were discussed in this session.