Introduction
Participatory Budgeting is an innovative financial practice that helps to enhance participation and improve accountability and transparency in administration of financial matters. It is a mechanism to involve and empower people in decision-making and more equitable distribution of resources. Participatory budgeting tools have been widely applied in Latin America and Europe and are now spreading to countries in Asia and Africa. It is estimated that at least 300 cities are currently applying the participatory budgeting methodology. The mechanism of participatory budgeting provides an excellent entry point to promoting the application of principles of good urban governance, especially transparency, within the context of local government finance. The ultimate beneficiaries of participatory budgeting are urban residents, particularly the urban poor, who have a direct input in the allocation of municipal financial expenditure on urban infrastructure and basic services.
Purpose
The objectives of participatory budgeting are:
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To ensure that the finances of the local government are properly accounted for and thus decrease the potential for abuse by individuals both within and outside the system.
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To involve the community, including the lower-income neighbourhoods of the city, in the priority-setting and budgeting process.
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To enhance local democratic culture, nurture civic engagement, and stimulate the development of social capital.
Linkage to Transparency
Participatory budgeting is an innovation by cities to engage directly with citizens, eliminating the "party politics" that undermines representative democracy in many countries. By involving communities in identification of priorities and allocation of resources, local governments can respond more effectively to the needs of their communities. The process enhances transparency by sharing information and holding decision makers accountable to the public at large, builds trust and improves the quality of governance in the city.
How it Works – The Key Elements
Value of the participatory budget. Municipalities may identify clearly the proportion of the budget subject to the participatory budgeting process, either before the process of participatory budgeting (generally voted by the Municipal Council), or after the process, based on the demands and on the municipal resources available. It is possible to establish in both cases a relationship between the budget discussed and effectively put into practice and the municipal budget implemented. However, it is important to note here that in certain municipalities it may not be easy to establish figures directly attributed to Participatory Budgeting process. This is due to the fact that the values may be only symbolic, or proportionally low compared to the total municipal budget.
Participation. The success of the participatory budgeting process is based on the extent of popular participation – whether individual participation or community-based participation/ representation. One of the main characteristics of participatory budgets in Brazilian cities is the acknowledgement of one’s right to participate individually and directly, and not necessarily through representatives of communities, unions or other associations. The number of participants in thematic and neighbourhood plenary meetings may vary from time to time or from one year to another.
Encouraging the participation of minority groups. To serve one of the fundamental principles of participatory budgeting, it is imperative to explore means of effectively including minorities and diverse groups of people both in the process and in its benefits. Such diversity should take into account, for instance, issues of gender, ethnicity and age groups. However, noting that participatory budgets are built fundamentally on territorial spaces (districts, neighbourhoods, regions of the participatory budget, etc.), thematic entry points will be specific to each city. Thematic committees to approach issues that are specific to vulnerable groups are also a good mechanism to elicit their participation and ensure that their priorities are included. The thematic committee of social inclusion as found in the City of Caxias do Sul, where issues related to youngsters and women are discussed, is one such example. Alternatively, actor-specific committees can be formed, e.g., committee dedicated to women such as the one in Recife’s Participatory Budget, or the one on Youth Participatory Budgeting established in Barra Mansa in Brazil (See Box 70).
Final approval of the budget, and the role of the City Council. Experiences of most cities which have experimented with participatory budgeting suggest that the legislative branch and the municipal councils should keep their traditional role of approving the budget. This element is extremely important in that participatory budgets recognise both representative democracy and the legislative power.
The most widespread and well-known modality is the one in which the budget is elaborated and consolidated in a participatory way by means of neighbourhood and thematic plenary meetings. The last stage of the budgetary allocation is generally the responsibility of the Participatory Budget Council (or its equivalent), and is presented to the Municipal Council for final approval.
A second approach is one in which the Municipal Council approves the budgetary allocation first. Once approved by the Municipal Council, it will be discussed in the following year by the executive branch (the mayor and the several departments) along with the population, generally through its social organizations.
Decision-making spaces and channels. The participatory budgeting process in different cities/countries has involved different decision-making channels. These include, for example, the Participatory Budget Council, an authority specifically created for the participatory budget. It is the dominant model in Brazil, with some variants (e.g., Congress of the City in Belém) and some adaptations outside Brazil (e.g., Assembly of the City in Córdoba or Directive Committee of the Participatory Budget in Ilo).
Another mechanism of decision-making for participatory budgeting is to build on existing political structures (e.g., Parish associations in Cuenca), or social structures (e.g., neighbourhood councils in Montevideo), that integrate the participatory budget process into their activities. In this sense, the participatory budget strengthens and extends the role of pre-existing organizations.
Elsewhere, citizen-based organizations that have other responsibilities besides the participatory budget have also been used for decision-making. Many cities have tended to favour participation through representatives of existing organizations.
Communicating the results. A key aspect of the participatory budgeting process is the communication of the financial results and the presentation of public accounts about the works that have been prioritised, their location, value, and time-frame for implementation.
Most municipalities accord great importance to keeping the population well informed, through a wide range of solutions such as public hearings, written reports and digital information. The most common ways are public meetings in which the Mayor and his/her staff render their accounts and answer questions. They are usually annual meetings at the beginning of a new cycle of participatory budget in each sub-region or district and during the thematic forums. In some cities, they occur twice a year or are even more frequent, throughout the cycle.
Alternatively, in some cities, the Mayor and his/her staff render their accounts not to the general public but to the Participatory Budget Council (or its equivalent). Councillors, in turn, are responsible for informing the delegates and the citizenry.
Other tools to share information about the accounts and the budget are the publication of an annual paper (such as a newspaper supplement), brochures, or reports in which each of the works and services is detailed, data are consolidated by regions, and the location of the works is mentioned. They are the main source of information about the concrete results of participatory budgets. This information can also be placed on the municipality’s website.
Legal and regulatory mechanisms to institutionalise participatory budgets. It is important to determine when and how to formalise a participatory budget process to ensure not only its success but also effectiveness and sustainability. It is also critical to assess the appropriate level of institutionalisation in order to preserve the dynamics of participation. From experience, the institutionalisation or formalising of participatory budgets is best done through Internal Regulation. It can begin with developing system for the election of delegates, forms of representation, criteria for distribution of resources, responsibilities of the PB council (if any), number of plenary meetings and thematic areas, etc. In some cases, such as in Porto Alegre, the institutionalisation process has further been crystallised by developing manuals containing guidelines and general criteria; or, as in the case of Belém, special regulations. Further still, some cities such as Santo André and Icapuí, have made the participatory budget become part of the municipality’s Organic Law. This gives the participatory budget a more formal and statutory status.
City/Country Examples
The
Pioneer in Participatory Budgeting - Porto Alegre, Brazil
Towards
More Transparent Budgeting and Public Procurement in Municipalities in Serbia
Cotacachi
- Increasing Allocation for Participatory Budgeting
Further information and contacts
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