Participatory Budgeting: Concepts and Practices

1. Participatory Budgeting:Concepts and Practices Participatory Budgeting Pilot World Bank Workshop Tirana May 12, 2004

2. Content • What is Participatory Budgeting (PB)? • Why LGs promote PB? • How to implement PB? • PB best practices • Lessons learnt • References

3. What is Participatory Budgeting? It is a process of prioritization and co-joint decision making through which citizens and local government decide together the final allocation of public investment • Include citizens in the formulation of annual budget • It is a complement of formal representation structures • PB rules prioritize the poorest • It is based on territorial and thematic divisions • It is the cutting edge of participation in LG

4. Why LGs promote PB? • To increase effectiveness and efficiency of budgeting and service delivery • making budgeting formulation and implementation more transparent and accountable to citizens • Matching technical capacity of LG in budget formulation with citizens needs • To increase equity • Creating an simple mechanism of involving the poor and traditionally excluded in accessing public resources and decision making • To ensure sustainability • Increase LG government revenue capacity and investment quality • Strengthen civil society organization • Build a constructive dialogue between LG and civil society • Building active citizenship and accountable institutions

5. FY 00 Final proposal How to implement PB? 1- LOCAL MEETINGS 3- APPROVAL IMPLEMENTATION 2- PB COMMITTEE ACTIVITIES

6. Final proposal How to implement PB? 1 - LOCAL MEETINGS (2 months) • Awareness campaign/preparatory community meetings • Information about financial situation and forecast • Information about public works in progress • Discussion of PB rules • Identification of local priorities • Discussion of local and thematic priorities • Selection of local and thematic priorities • Election of PB local delegates • Each local areas elects their representatives to the PB Committee

7. FY 00 How to implement PB? 2 - PB COMMITTEE ACTIVITIES (2 months) • Establishment of PB Committee • 50% civil society + 50% LG delegates (usually) • Discuss of all local and thematic priorities • Official opening of the PB Committee • Presentation of all priorities • Capacity building activities • Understanding the overall situation • Visit of all priorities • Deepening discussion of municipal revenue and capital investment • Monitor current investments

8. How to implement PB? PB COMMITTEE ACTIVITIES (May-June) • Technical and financial analysis by LG\ • Analyses to fit proposal according to technical criteria • Several institutions and departments provide technical information • Reconciliation of demands with budget • Prioritization • Analysis of priorities based on prioritization matrix • Discussions with Municipal Council members • Consensus building • Allocation of resources based on prioritization matrix • Budget detailing

9. How to implement PB? APPROVAL & IMPLEMENTATION (July-) • Approval of the Budget Proposal by the PB Committee • Usually by consensus • If necessary by voting • Formal Approval of the Budget by the Council • Submission of PB budget to Mayor • PB Committee send the budge proposal for approval • Strong participation of citizens • Municipal Council hold the final decision • Budget Implementation and Follow-up • Delegates and citizens monitor the budget implementation • Discussion of necessary changes in the rules of PB • Start of a new year of the PB

10. Best Practices • 15 countries have some kind of PB • Brazil, Bolivia, Nicaragua, Peru, Mexico • Check Republic, Scandinavian countries • US, Canada • In 2003 there were more than 250 municipalities with PB in Brazil • 59% of municipalities over 100.000 inhabitants have implemented PB • All political parties despite ideological positions have implemented • Some State governments have started to implemented the methodology • The Federal Government adopted PB methodology in the formulation of the last Multi-Year National Investment Plan (PPA)

11. Best Practices: Porto Alegre • The first and most well-know experience in participatory budgeting • Started in 1989 • 1.3 million inhabitants • Capital of the Rio Grande do Sul State

12. GOAL The objective is to ensure a progressive and transparent public expenditure ensuring that regions with great needs received receive a greater budget PRIORITIZATION CRITERIA Population weight = 2 Lack of service weight = 4 Thematic priorities weight = 5 ACHIEVEMENTS 1989-1996 number of households with access to water services rose from 80% to 98% number of children enrolled in public schools doubled 30 kilometers of roads were paved annually in poorer neighborhoods revenue increased nearly by 50%. Best Practices: Porto Alegre

13. Best Practices: Belo Horizonte • Capital of the Minas Gerais State • PB started in 1993 • OP held every 2 years • Area-based planning rather than project-based • Through integrating with the Master Plan and Land Regularization and Urbanisation programs • Resources are distributed by territorial units (81 UPs) • Resources alloacted based on population size and map of quality of life indicator (IQVU) giving priority to areas of poverty concentration

14. * Norte Venda Nova Nordeste Pampulha Leste Noroeste Oeste Centro-sul Barreiro Best Practices: Belo Horizonte Highest IQVU 26 Special Ups = 10% budget 81 UPs Lowest IQVU Priority areas = 56% budget

15. Best Practices: Belo Horizonte PRIORITY AREAS INVESTMENT APPROVED FOR 2003/2004

16. Best Practices: Belo Horizonte Infrastructure 439 45,30% Slum upgrading 254 26,21% Education 97 10,01% Health 92 9,50% Social 30 3,10% Sport 26 2,68% Housing 16 1,65% Culture 12 1,24% Green areas 3 0,31% 969 100,00%

17. Best Practices: Santo André • One of the 39 municipalities of the Metropolitan Region of São Paulo, located in the Southeastern region of Brazil (Greater ABC Region) • Industrial heartland of Brazil and Latin’s America largest industrial complex • 174.38 km2 • 648.443 inhabitants • 39% in urban area and 61% in watershed protected area • 139 slums (18,5% of population)

18. Best Practices: Santo André • Started during the 1989-1992, but was interrupted and re-started in 1997 • The municipality is divided in 19 geographic regions and 9 thematic issues • Education • Health • Cultural Identity • Social Inclusion and Housing • Environmental Quality • Economical Development • Urban Development • State Reform • Urban Violence

19. Best Practices: Santo André • In 2001 the PB was merged with the Strategic Planning to broaded target group in the participatory processes: community and private sector together debating the city • Now participants from both processes would build alliances and consensus in resource allocation • Investments in short-term needs, such as water, sewage, upgrading, pavement have also to consider investments in the long-term, less visible and immediate problems

20. Best Practices: Barra Mansa “Children’s Participatory Budgeting Citizenship does not have size”

21. Population: 166.745 inhabitants Children and adolescents in the age group 0-19 years represent 35,2% of the population Best Practices: Barra Mansa

22. Best Practices: Barra Mansa • A dynamic process around the definition of the use of a percentage of the municipal budget according to the demands and needs established by the children and youngsters • Children and youngsters with the 9-15 years old, both school-going and non-school going children are eligible to participate

23. Best Practices: Barra Mansa OBJECTIVES • To stimulate the participation of the children and youth in the issues related to the development of the city • To promote and create leadershiptowards democratic participation • To value and incorporate the contribution that young citizens can give to the city

24. Best Practices: Barra Mansa ACHIEVEMENTS • Around 6.000 children and youngsters have been involved in the years of 1999 and 2000 • A percentage of the municipal budget is established to attend the children’s priorities every year (around 75.000 USD) • Approval by the municipal council to designate a percentage of the municipal budget for this program (around 0,13% of the total) • The inclusion of the subject “ public budget” in the curriculum of the municipal schools from 3°primary level • 120 volunteers called agents of the participatory budgeting • 37% of the population in the age bracket participated in the process

25. Lessons Learnt FROM LOCAL GOVERNMENT PERSPECTIVE • Commitment and leadership to involve citizens in decision making • Need minimum level of autonomy in budget allocation • Need to avoid reinforcing paternalism • Require good budget, tax and capital investment information system • Need to strength municipal finance system • Limited discussion on operational costs • Constructive dialogue and consensus building depends on good facilitation,communication and conflict resolutions skills and techniques • Technical staff not prepared to dialogue with citizens • Need training of facilitation, communication and conflict • Need to avoid creating tension with formal elected representatives • Important to involve from the beginning elected councilors

26. Lessons Learnt FROM LOCAL GOVERNMENT PERSPECTIVE • PB methodology is needs to be flexible to adapt from its learning process and context (ex. urban – rural) • Set up good monitoring and evaluation practices • Do not institutionalize things that will need changes later • PB does not imply substantial extra costs for LGs, but it requires commitment and time from staff • PB requires attitudes changes in technical staff to learn how to dialogue with people • Increased financial capabilities, accountability and political support • Budget implementation has become more efficient, effective and inclusive • Revenue has raised due to better understanding of tax uses

27. Lessons Learnt FROM CITIZENS’ PERSPECTIVE • Need to address the specific challenges for involving vulnerable groups (attitudes, constraints for participation, formal knowledge) • Need to overcome individual conflict of interests and political ambitions • Civic groups better organized have greater opportunities to influence • At the beginning it is difficult to overcome mistrust in government institutions and ensure strong participation • Citizens wiliness to put time in the process • In the most successful cases PB is guided by formal mechanisms while less successful ones are dominated by informality and limited direct decision-making

28. Lessons Learnt FROM CITIZENS’ PERSPECTIVE • Citizens trust in government has improved due to better understanding of budget constraints, tax and investments • People become more informed and engaged in public life at local, regional and national levels • Increased people understanding on territorial and sector issues • People learn to look to their needs within a broader perspective of all citizens • It become a learning experience as going to university • It has successfully opened political opportunities included traditionally under-represented groups in decision-making • Increased social capital and empowered the poor

29. Lessons Learnt Participatory Budgeting as implementing mechanism of good governance and decentralization has shown unprecedented political, social, economic and institutional achievements

30. References Abers, R. “Practicing Radical DemocracyLessons from Brazil”. Paper presented at the Workshop: Insurgent Planning Practices – Perugia, Italy, June 21-27, 1998 Acioly, C.,Herzog, A., et al. “Participatory Budgeting in the Municipality of Santo Andre, Brazil: the challenges of linking short-action and strategic planning”. SINPA paper, Institute for Housing and Urban Development Studies, 2002. Blanco, C. "Citizen Participation and Social Inclusion Proceduresin Santo André, Brazil: Participatory Budgeting and City of the Future Project“. Presentation at the World Bank Urban Research Forum in December 2002 Cabannes, Yves. Belo Horizonte Orcamento Participativo. Powerpoint presentation Costa, Emly. Barra Mansa: Orcamento Participativo Mirin. Powerpoint presentation Reuben, W. Participatory Budgeting in Brazil and Implications for Local Government Projects. Presentation given at the World Bank World Bank. Porto Alegre an Interesting Example. WBI video developed based on the video “voices de una ciudad: democracia participativa en Porto Alegre” produced by Marta Hanercker and Luis Acevedo Falls