Participatory budgeting was created in Porto Alegre, a city of 1.3 million people in Brazil, in 1989.
It is widely considered to be the biggest and most successful use of participatory budgeting anywhere in the world with 17,200 citizens involved at its peak in 2002, and distributing around $160 million of public money. It has had powerful redistributive impacts as well becoming embedded in the institutional structure of municipal government.
The process was initially designed to challenge the corruption and clientelism endemic in Brazilian political culture at the time. It was particularly effective at mobilising the poor and those who are often politically marginalised.
Budgeting happens annually, beginning with the presentation of accounts from the previous year by the city government. The government also presents its investment plan for the current year, which had been decided at the meetings from the year before. The debates then begin for the subsequent year, taking a period of nine months.
Participatory budgeting in Porto Alegre involves three streams of meetings: neighbourhood assemblies, thematic assemblies, and meetings of delegates for citywide coordinating sessions (the Council of the Participatory Budget).
The neighbourhood assemblies discuss the funding allocations for the 16 districts of the city for the city government's responsibilities including schools, water supply, and sewage. The meetings are divided into 16 ‘Great Assemblies', held in public spaces such as churches and union centres across the city, open to all. These debates decide the criteria for which the budget is allocated in the districts – for example whether it is population, an index of poverty, or a measure of shortages.
City-wide popular assemblies are held in the thematic stream. These were established to deal with issues that are not neighbourhood specific, such as environment, education, health and social services and transportation.
Each of the 16 districts gives two sets of rankings at the end of the deliberations: one for things that affect the district specifically, such as the building of schools or sewers; and another for things that affect the entire city, such as transport or beach cleaning. They also elect delegates who proceed to the Council of the Participatory Budget (COP) with the districts' suggestions. The role of the COP is to refine and apply the budget rules developed by the neighbourhood and thematic assemblies and put forward by the government administration beforehand.
At this point, elected councillors can accept or reject the budget, but in reality have a fairly limited role. Delegates to the COP convene for two hours once a week, and can only serve for one year at a time to give as many people as possible the opportunity to participate.
The process is broadly considered an enormous success. Women, ethnic minorities, low income and low education participants were overrepresented when compared with the city's population and consequently funding shifted to the poorest parts of the city where it was most needed. It brought those usually excluded from the political process into the heart of decision making, significantly increasing the power and influence of civil society and improving local people's lives through the more effective allocation of resources.
- Increasing the percentage of the overall budget available for participatory budgeting leads to powerful redistributive impacts.
- Creating tiered meetings gives participatory budgeting the flexibility to work at local and regional levels – in this case, for districts and the city region.
- Beginning with a government presentation of last year's accounts increases the importance and legitimacy of the process – raising it to the level of government decisions on spending. Mayors and lead councillors could play a key role in this in participatory budgeting for devolution;
- The creation of a participatory budgeting council increases deliberation and organisational effectiveness.