A feature of public administration in Porto Alegre is the adoption of a system of popular participation in the definition of public investment, called the Participatory Budget. The first full participatory budgeting process was developed in the city starting in 1989. Participatory budgeting in its most meaningful form took place in the city from 1991 to 2004. Participatory budgeting was part of a number of innovative reform programs to overcome severe inequality in living standards amongst city residents. One third of the city’s residents lived in isolated slums at the city outskirts, lacking access to public amenities (water, sanitation, health care facilities, and schools).
Participatory budgeting in Porto Alegre has occurred annually, starting with a series of neighborhood, regional, and citywide assemblies, where residents and elected budget delegates identify spending priorities and vote on which priorities to implement. Porto Alegre spent about 200 million dollars per year on construction and services, This money is subject to participatory budgeting, unlike the annual spending on fixed expenses such as debt service and pensions, which is not subject to public participation. Around fifty thousand residents of Porto Alegre took part at the peak of the participatory budgeting process (compared to 1.5 million city inhabitants), with the number of participants having grown year on year since 1989. Participants are from diverse economic and political backgrounds. Although participatory budgeting appears to continue in the city today, two prominent scholars on the process have stated that “after the defeat of the Workers’ Party in late 2004, a politically conservative coalition maintained the surface features of PB while returning the actual functioning of the administration to more traditional modes of favor-trading and the favoring of local elites.”
The participatory budgeting cycle starts in January and runs throughout the year in many assemblies in each of the city’s 16 districts, dealing with many areas of interest to urban life. The meetings elect delegates to represent specific neighborhoods. The mayor and staff attend, in order to respond to citizens’ concerns. In the following months, delegates meet to review technical project criteria and district needs.
City department staff may participate according to their area of expertise. At a second regional plenary, regional delegates prioritize the district’s demands and elect 42 councillors representing all districts and thematic areas to serve on the Municipal Council of the Budget. The main function of the Municipal Council of the Budget is to reconcile the demands of each district with available resources, and to propose and approve an overall municipal budget. The resulting budget is binding, though the city council can suggest, but not require, changes. Only the Mayor may veto the budget, or remand it back to the Municipal Council of the Budget (this has never happened).
A World Bank paper suggests that participatory budgeting has led to direct improvements in facilities in Porto Alegre. For example, sewer and water connections increased from 75% of households in 1988 to 98% in 1997. The number of schools quadrupled since 1986. According to Fedozzi and Costa, this system has been recognized as a successful experience of interaction between people and the official administrative spheres in public administration and, as such, has gained a broad impact on the political scene nationally and internationally, being interpreted as a strategy for the establishment of an active citizenship in Brazil. The distribution of investment resources planning that follows a part of the statement of priorities for regional or thematic meetings, culminating with the approval of an investment plan that works and activities program broken down by investment sector, by region and around the city. Also according to Fedozzi, this favors:
The high number of participants, after more than a decade, suggests that participatory budgeting encourages increasing citizen involvement, according to the paper. Also, Porto Alegre’s health and education budget increased from 13% (1985) to almost 40% (1996), and the share of the participatory budget in the total budget increased from 17% (1992) to 21% (1999).