The Participatory Budget Process in Brazil
by Joao Sucupira and Leo Mello
February 24, 1999
Cape Town

MR SUCUPIRA: Good morning, my name is João Sucupira. I am from the Brazilian Institute of Social and Economic Analyses (IBASE) and the focus of this presentation will be municipal budgets. Right now we have two different experiences regarding participatory budgeting in Brazil. The first one is the budget process, in which the state (executive branch) is the leading force in bringing the population to discuss the budget. The second one is when the executive branch which does not allow popular participation. The first situation, in which the state opens the space to civic participation in the budget process, it is very important to understand how we got to this point.

Brazil recently experienced more than 20 years of dictatorship (1964-85); we were a capitalist economy, but the state kept the borders closed to imported products. We had one of the worst income distributions in the world and inflation rates were close to 100 percent a month in certain periods. The budget law lost credibility because during the year inflation was responsible for making it sound unrealistic, almost like a fairy tale. The legislative branch, on the other hand, could not do much about it. At that time, the laws, called institutional acts or Atos Institucionais (AI), did not allow the representatives to change the budget, but only to send the whole bill back to the executive power. Since it was a dictatorship regimen, the second option, sending it back, never took place.

The disparities in income meant that a large share of the population not only was poor, but also illiterate, and as a consequence, issues such as budget, were never discussed. Although we had this dictatorship period, civil society never rested, they/we were fighting back. We had a lot of social movements that got stronger as the end of the dictatorship came to a close. This happened during the 1970s and 1980s, and at the end of 1988 we got a new constitution, a few years after the dictatorship ended (1985), and the country became a democracy. With the new Constitution representatives all over the country got back the power to change the budgets themselves.

Taking advantage of the end of the dictatorship, one of those social movements that was very active (the workers from the automobile industry from the highly industrialized state of São Paulo), got more organized and founded a left wing political party, called the Workers Party – PT (Partido dos Trabalhadores).

In 1989 the Workers Party won the election in many cities around the country, including the city of São Paulo, which has a population of 10 million and is one of the most economically important areas in Brazil. In some of these cities, they, the PT, established a whole new way to deal with the budget process and the demands of the public. Their new method was to ask the population to participate, assemblinG together the budget bill not only according to the government’s own opinion, but also to consider the opinions of the public.

The state started not only calling upon the population to hear their opinion, but also to share the decision making power, establishing a process where it could be clearly seen that the participants would have the chance to decide.

There were only two or three of these initiatives in the beginning; now we have more than 100 municipalities implementing participatory budgeting processes. There is a variety of features among those experiences, instead of a single model having been identified, but the common attribute is that all of them, as their starting point, have popular participation in the budget process. This allows any citizen to decide, influence or give their opinion over the public policies that are going to affect their own life, their standard of living. At the same time, the choices made at these specific meetings that put the budget bill together Acan affect the budget that is ultimately enacted.

Popular participation in the budget process means the chance to improve the quality of life and empowering the citizenship. We are trying to connect transparency and popular participation at the decision making process, and to see how these initiatives can improve the standards of living and the quality of life of the citizens.

To explain how it happens, I have to explain a little bit about how participatory budgeting works. It is interesting to understand how a city with one million inhabitants and a city with almost 10 million people could both create processes of participatory budgeting.

As you can imagine there are some basic steps. In Brazil, the budget bill is initiated by the executive branch. The mayor's office (either the planning or the budgeting departments) divides the city into regions, and in our sample case, there were 16 regions.

A schedule is presented and made public to the population and to the press, where it can be seen when the corresponding meeting for each region is going to be held.

Then they sponsor meetings in each one of those regions and they gather the opinion of the population. Priorities are set based on the major problems of each region and the choices made by the people attending the meeting.

At each meeting in each region, the population chooses delegates, based on the number of people attending. Then the people elected decide what should be the priority among the choices, which will frame the budget itself in the long run.

After the executive branch and the elected delegates put the whole budget bill together, it is time for the budget to go to the legislative branch, where the representatives have the chance to change the entire budget. The scope of the legislative changes typically depend, in part, on whatever pressure is applied by social movements and delegates in support of the budget proposal put together by the particapatory process.

Most of the people that attend the paticipatory meetings are the poor people of course, because the upper income or rich people are not really interested or have a different access to the decision making process. Although it is true to say that it is not the whole population that participates, this is a way of inverting, turning upside down, the priorities. This change in priorities through this process is very good. If you did a study over the last 10 years of participatory budgeting, we would really see improvements in the standards of living and the citizenship of the people. Of course, there were a lot of problems during the process, but we do not have time to address every single one right now.

Now I am going to describe what IBASE does regarding this issue. We basically do training with the delegates, legislative and executive branch staff, social movements, and NGO staff. Moreover, we are frequently contacted to go to some of those 100 cities and evaluate their process/practice, help them to improve this process, since we've studied many of them. Although we have 5,000 plus municipalities, and the participatory process is happening in only 100, it is important to notice that five out of the 15 major cities in the country are right now developing a participatory process. These five cities and their populations are Belo Horizonte (2,091,371), Brasília (1,821,946), Recife (1,346,045), Porto Alegre (1,288,879) and São José dos Campos (486,167)).

On the other hand, in Rio de Janeiro (5,551,5638), the second most populated city in Brazil, there is not this kind of commitment by the executive branch. They "close the doors" and don't let the population participate. What we do, being a NGO concerned with participatory budgeting, is to gather a lot of institutions like social movement groups, neighborhood associations, unions, class institutions, public service institutions, into a forum where everybody has a common interest of improving access to social policies for those usually neglected by the government, and we convey our message to the legislative branch in order to push these policymakers to hear our voice.

At the forum we analyze the budget and follow the expenditures during the year in order to portray to other people what is happening with their money and what new priorities are being supported.

We will explain more about this participatory budgeting in the question and answer period.

This municipal council (CD) is an institution regulated by municipal law, with half of their seats for the government and half for people from the population (that is people already working at institutions other than government, and with experience with policies related to children and infants).

In theory they decide over every single policy that will have some impact over the standard of living of people under 18 years old. This municipal council also discusses policies and they have the power to decide how to use public funds to have policies implemented. At the municipal level of government they work with another council called tutorship council (CT).

A lot of people here might know that we have problems with children on the streets, children working, child prostitution and so on. The role of the municipal council is to help children that do not have their rights respected, as established by a federal law called ‘the Child and Infant Statute’ or ECA.

The Brazilian Constitution and the other federal law (the ECA) determines that policies regarding children and infants all over the country should be decided, at each level of government, by the corresponding CD.

Given how these councils are formed, and how their seats are filled/distributed, we might say this experience is popular participation. We have a formal/legal popular participation happening all over the country in each one of the 5,000 plus municipalities. Although in theory it looks like a perfect world, it does not work smoothly.

On a daily basis we have many problems that affect this formal/legal popular participation, and that is why we should be careful before stating that the law includes a priority to make the practice democratic. Most of the participatory budgeting experiences are not established in any law; the executive branch initiates them and over the years, it gets stronger as the population feels they can make a difference.

On the other hand, these experiences I am discussing are "formal popular participation", or formal civil society participation, if you wish, established by the Constitution and the municipal law (like the municipal constitution). In contrast to those 100 municipalities, where the participatory budgeting is not formal or established in any law, these experiences that are formal do not really work that well, or as they should in the first place. There are a lot of conflicts among the different political actors involved, such as the government, NGOs, and judiciary powers.

It is a mistake to equate decentralization with democratization, they are not the same, and having one is not necessarily a condition to achieving the other. Most of the time decentralization means local centralization, centralization at the local level, which could hardly be mistaken with democratization.

In some ways, decentralization may be a way for governments to set aside or ignore public policies not supported by or important for them (government). That is, if they are not a progressive government, they may ask the population to participate and decide with them the policies for children and infants, but they might not implement these policies. Afterwards, they might say: "we had popular participation but the population couldn't cope with the responsibility of making those decisions, they didn't participate in the decision making process as well as they should have and the failure of those policies is their fault".

I will talk about the structural adjustment programs that are occuring at the subnational level in Brazil. Although the SAP is usually for the federal level, municipalities and states often rely on federal funds, meaning these governments can not be that independent politically, unless they manage to balance their budgets. Meanwhile, "unnecessary" expenditures are constrained.

CDs, in fact, do not decide over the policies, since they can not decide, enforce or check out if the money is going to be spent where it was supposed to. Part of this problem is their own fault because they lack skills regarding budgetary issues and experience in public expenditures management. The bureaucracy, in general, behaves as if everything is a matter of national security, as if every piece of information was "secret".

The participants of the CD, at least the half that comes from NGOs, are in a place where they are decision makers, but they have no idea what to do with the money and it is very common to see a lot of those municipal councilors with funds, but ignoring the means to use it. They might have the theory, but they don't know how to deal with the bureaucracy and how to use the budget to the benefit of the public.

This brings us to the other question. If the public power that is taking the initiative to propose the participatory budgeting doesn't spend money on the programs chosen by the population, people get frustrated. At one of the cities, they have a specific educational agency, not a small one, only to deal with the participatory budgeting, and they produce a lot of information, such as communication folders, press-releases, summary of the budget, printed explanation about what is the budget, advertisement from the meetings and so on.

Then there is another question that is interesting and that is: how to make sure this does not become a political party flag, or how to make sure it does not become a partisan issue? It is very hard because most of the cities that have developed this process are from the Workers Party – PT and it is very hard not to connect one thing to the other. Nowadays we have right wing political parties that are developing the same experiences, because they see in it the possibility to get reelected. It is very interesting to notice that there is always conflict in this process, there is always a dispute. This is not something easy to deal with, but it is what makes the process rich.

QUESTION: What is the role of the legislative branch?

MR SUCUPIRA: The legislative question is a very important question in regards to participatory budgeting. The representatives complain about the executive branch stealing their role. Then what happens is that the legislative doesn't take part in the participatory budgeting process because it is the initiative from the executive, and it takes place during the time the Constitution saves for the executive branch to put their own budget bill together. The legislative branch could do the same, which would get the representatives closer to the population.

Regarding the wealthier people that probably would get represented by the legislative branch, they probably will be dissatisfied since the budget was made by the poor. There will be some conflict of interest but the legislative branch also knows that, since the population helped make that budget, it would be very unpopular to change it without asking them first.