The Hindu : The Porto Alegre innovation

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Saturday, Feb 16, 2002

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The Porto Alegre innovation

By C. Rammanohar Reddy

Now into its second decade, the results of the experiment in participatory budgeting in southern Brazil are astonishing by any yardstick.

PORTO ALEGRE has placed its imprint on the headlines because it has hosted the World Social Forum, the "alternative Davos", for two consecutive years. But the city has an older and perhaps bigger claim to fame. Porto Alegre has become a model for people's participation in making the annual budget of the municipal government. The process has resulted in an improved quality of life and equity in the provision of services. It has also led to accountability among Government officials and promoted transparency in decision-making. The Porto Alegre innovation has become so successful that it is not just being replicated elsewhere in Brazil. It has attracted global attention and is now being studied by local governments in North America and West Europe. If the Brazilian city of Curitiba has become known for its integrated urban transport system that places a premium on public transportation, then Porto Alegre is becoming known for what the local government translates as the "participative budget".

The story begins in 1989 when the socialist Workers' Party was elected to office in the capital of Rio Grande de Sul, Brazil's southern-most State, and found it had inherited a bankrupt and debt-laden municipality. To give effect to its promise of an improved quality of life, the new Government experimented with what has evolved into an intricate pattern of people's involvement in drawing up the priorities for public expenditure priorities. There are three broad features of this unique process. The first is that every year residents in each of the 16 wards in the city express their preferences in sectors such as urban development, health, transport, education, culture and leisure. The wards then decide on their individual priorities. People's choices are expressed by vote in neighbourhood meetings and also in people's assemblies that address each civic theme. These meetings are open to all citizens. The poorer areas of Porto Alegre usually place an emphasis on basic services such as water supply, sanitation and roads; while the wealthier areas lay greater stress on parks and recreational facilities. The second feature of the participatory budget process is that it is inter-woven with the functions of the Executive (the Mayor's office) and the Legislature (the City Council). The citizens' preferences in public expenditure are articulated by the Council of Participatory Budget (COP), which engages in discussions with the city council and local officials about operationalising people's choices. The COP is a body elected every year with representatives from each ward. The local government translates people's preferences into budgetary allocations with the application of three criteria: need, population and inter-sectoral priority. Porto Alegre officials say the basic principle is "greater the need, more the allocation". At the same time, the extremes of local preferences are muted by factoring in the requirements of the city as a whole. The third feature of the process is that it is both a review and a planning process. The process begins in March with the neighbourhood meetings and a review of the previous year's projects. It ends in December when the expenditure priorities are finalised and the projects for the next year are drawn up.

Now into its second decade, the results of the experiment in participatory budgeting in southern Brazil are astonishing by any yardstick. In concrete terms, there has been a significant improvement in the quality of life. In a city where the absence of sanitation used to be a major problem, the proportion of homes with sanitation has leaped from 46 per cent in 1989 to 85 per cent in 1999. Coverage of homes with piped drinking water has grown from 80 to 98 per cent. The number of children in public schools has doubled and 25 km of new roads have been laid every year. Now the focus is moving to other areas. Sewage treatment has reached 26 per cent, compared to just 2 per cent a decade ago. More than a hundred new day care centres are being established and dozens of new family health centres opened every year. The municipal government's finances too have improved. The common view is that corruption has been reduced and that cronyism in the award of contracts has come down. Close to $one billion have been spent on new projects and over 25 per cent of the city budget is now allocated to capital expenditure. And while people's participation is restricted to setting spending priorities, the demands on resources have meant that the tax base has been expanded. A new and progressive real estate tax has fed the resources for Porto Alegre's expanding social services.

But the biggest success has been in giving residents a fresh meaning to "citizenship". Residents now have a stake in the city and its future. In 1990, fewer than a thousand residents took part in the participatory budget process; last year 50,000 did. Besides, the budget-making process has been demystifiedThe system is by no means perfect. At least two challenges should be mentioned. First is the tension between the Legislature and the COP. Members of the Legislature have to share power with what is, in at least one respect, a parallel system. This is true as well of the relationship between local government officials and the COP. It took time for the officials to accept that they could not silence participants in the process with technical jargon. Second, while many low-income residents are actively involved, the very poor (and the very rich) have not been enthused. Second, people's involvement may have increased manifold, but in a city of one million, participation by 50,000 means just 10 per cent of people in the voting age are engaged in the process. However, if one were to go by the electoral results, Porto Alegre's participatory budget process is popular. The Workers Party has been re-elected to the local government three times after its first term in 1989-93; which must be seen as an endorsement of its major innovation when in office. The Government has now decided to introduce the participatory budget process in all of Rio Grande du Sul. More than 350,000 people participated in the process last year.

India has had its own experiments with people's participation in planning. Kerala is one State where the process was initiated in the mid-1990s. In a different form, decentralisation was set in motion first in Karnataka in the mid-1980s and then in West Bengal. Each of these experiments was different from the Porto Alegre innovation. But does the Brazilian model hold any lessons for India? It is self-evident that a pre-condition for success is a long-term political commitment to the people's participation process. This has been present in Porto Alegre, but not in India. The second and equally important requirement is the creation of the appropriate institutions that both give expression to people's priorities. And by establishing the mechanisms for a constant dialogue between the agents of people's participation and both the Executive and the Legislature, the city has been able to avoid the conflicts and even sabotage that arise from parallel streams of functioning. The larger lesson is, of course, that people's participation can work over a long period and with a great deal of success.

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