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You are here: Home News 2017 November Shifting the goalposts: participatory budgeting in Brazil
You are here: Home News 2017 November Shifting the goalposts: participatory budgeting in Brazil

Shifting the goalposts: participatory budgeting in Brazil

Publicado em Nov 08, 2017 04:46 PM

Citizen participation has become a political football in Brazil, as austerity turns back its progress. Gavin O'Toole reports.

By Gavin O'Toole

Ask anyone about Brazil and they will doubtless cite its fame as a global champion in football.

What is less well known is its status as a global champion of harnessing the views of citizens in budget setting. But, after three decades of progress in this area, Brazil’s fiscal crisis has put the initiative in jeopardy.

Observers say a two-year recession and political turbulence since the impeachment in 2016 of president Dilma Rousseff and the accession of fiscal conservative Michel Temer has stalled momentum to provide citizens with a voice. They suggest that Temer’s tough austerity policies – intended to rescue an economy that has shrunk by 8% since 2014 – mean participation is in retreat just when it may be needed most.

Paolo de Renzio, a senior research fellow for the International Budget Partnership, says: “Opening up these decisions [over austerity] for participation would put the government in a lot of trouble. They have not done it and are not intending to.

“Participation is not a luxury. A legitimate government needs to have a discussion on the costs and benefits of the measures it wants to implement. So those trade-offs should be made clear – but the government is not engaging with the discussion, which is dangerous because it can fuel public discontent.”

Public participation in shaping fiscal policy is being championed as crucial to good governance by organisations such as the Global Initiative for Fiscal Transparency (GIFT). Governments from Georgia to the Philippines are empowering citizens to get involved, and Latin America has played a prominent role, developing the world’s first index of budget transparency in 2001-03.

According to the Open Budget Survey, Brazil is a regional leader. The country was a founder of GIFT and sponsored its guiding principles, endorsed by the UN in 2012. Brazil also cofounded the Open Government Partnership launched under Barack Obama in the US.

Dr Carmela Zigoni, a political adviser at Brazil’s Institute for Socioeconomic Studies (INESC) who compiles the Open Budget Survey’s index, believes citizen participation in budgeting strengthens human rights. “This kind of citizenship education is important so that people understand that the budget is their right – it exists for them to realise their human rights in a progressive way,” she says,

Brazil was the birthplace in 1989 of participatory budgeting (PB) in Porto Alegre, the capital of Rio Grande do Sul state. PB grew in popularity: in 1989, fewer than 1,000 citizens in a city then of 1.3 million took part; today about 50,000 people do so. Up to 250 of Brazil’s 5,570 municipalities have since tried PB, and more than 1,500 instances of it had been implemented globally by 2015.

“Participation is not a luxury. A legitimate government needs to have a discussion on the costs and benefits of the measures it wants to implement.

Paolo de Renzio, a senior research fellow for the International Budget Partnership

Evidence has demonstrated PB’s positive effects. World Bank research suggests it has boosted access to amenities for needy groups and reduced poverty. Equally important are citizenship gains; the World Bank found high levels of participation in PB among women, low-income groups, ethnic minorities and people with disabilities. PB is seen by political scientists as a way of curbing “clientelism”, by which powerful political actors buy support.

However, PB has not been without critics. Some research on Porto Alegre suggests that participation can remain limited – the World Bank noted a lack of representation of extremely poor people – and the slow progress of public works can frustrate the public.

Dr Zigoni notes that PB ensures participation in decisions affecting just below 5% of the total national budget. “Participatory budgeting was a great success and as a pilot, an educational project, but it is not effective from the point of view of real participation because it accounts for less than 5% of the budget. So the national budget – the economic model – is not under discussion.”

Moreover, PB did not entirely resolve thorny political problems, and clientelism may have persisted in some cases. Professor Istvan Kasznar of the Getulio Vargas Foundation, a research and higher education centre, warns that participatory mechanisms can be at risk of being monopolised by political interests. He says: “Participation has been a tool to legitimate demagogic interests; it is a good idea, but its feasibility should be linked to qualitative decision-making through expertise, which was not necessarily the case.”

PB first spread to many municipalities run by the left-wing Workers’ Party (PT) after 1990 although, by 2001, nearly half of these programmes had been adopted by non-PT administrations, and it has subsided since 2015 as PT fortunes have faltered.

Kasznar, who witnessed PB meetings in Porto Alegre and elsewhere, identified huge variations in performance. He insists that many people participated because they were ideologically linked to parties such as the PT, yet lacked budget expertise and secured higher spending simply by force of numbers. He points to the ways municipalities in the state of São Paulo adapted Porto Alegre’s experience by ensuring participants understood budgeting.

PB forms only part of a broader culture of citizen engagement that has developed in Brazil since the 1990s at municipal, state and federal levels.

A key aspect of GIFT’s work has been increasing participation at the national level and on issues that go beyond expenditure.

“Participatory budgeting was a great success and as a pilot, an educational project, but it is not effective from the point of view of real participation because it accounts for less than 5% of the budget.

Dr Carmela Zigoni, a political adviser at Brazil’s Institute for Socioeconomic Studies

Murray Petrie, lead technical adviser to GIFT, says: “People tend to think of public participation in fiscal policy as participatory budgeting à la Porto Alegre and, while that is certainly an important element  of it, from our point of  view public participation is not just about the expenditure side of the budget – it’s also very much about taxation and revenues.”

One product of Brazil’s 1988 democratic constitution was the creation of policy councils to open up debate across the country and, under the presidency of Luiz Inácio “Lula” da Silva, by 2011 about 65,000 local councils were filtering ideas upwards to 38 national councils.

De Renzio notes that Brazil’s fiscal crisis and the new government’s changing priorities has seen these mechanisms fall into abeyance.

He says: “The government cannot really scrap [these mechanisms] because they are constitutionally mandated, so what it is doing it is just basically not using them or not allowing them to function in the way they should.”

The limited influence of the council system over fiscal policy and the desire of NGOs to broaden discussion to tax reform generated pressure for a cross-sectoral mechanism and, in 2011, an inter-council forum was formed to debate policy issues that cut across across the responsibilities of individual ministries. According to De Renzio, this too, has fallen into disuse since Temer became president, and it is hard to say whether it will be revived following elections next year.

Another initiative illustrating the vast scale of public engagement under da Silva and Rousseff was the widespread use of public policy conferences to complement the councils: from 2003–10, up to seven million people participated in 74 conferences filtering ideas upwards to ministries.

To Petrie, these offered good evidence of Brazilian leadership. “The policy conferences demonstrate that it is undoubtedly the case that Brazilians have taken this probably further than anybody else in terms of systematic, large-scale engagement of people in policy deliberation processes.”

Other institutional initiatives were developed by individual agencies. Brazil’s planning ministry, for example, outlines an extensive structure of participation in policymaking, and since 2010 a “citizens’ budget” has provided a simplified explanation of the budget process.

Greater citizen participation in Brazil has also mirrored a broader commitment to improving fiscal transparency, and laws oblige authorities to make available information on taxation and expenditure. The International Monetary Fund says Brazil meets many of the principles of its Code of Fiscal Transparency.

Open data initiatives began with the launch in 2004 by the federal comptroller (CGU) of a transparency portal, and the planning ministry created infrastructure to provide data under the 2012 Access to Information Law. Increased attention to the misuse of public resources – for instance the extensive Car Wash scandal, which has been called the largest corruption case in modern history – has pushed the CGU to the heart of politics. Alongside formal mechanisms, a plethora of civil society organisations promoting accountability has sprung up.

Yet, while Brazil has clearly made gains in extending participation, observers such as Petrie suggest that it still has a long way to go to, especially in tax policy. The Open Budget Survey’s update in late 2016 said Brazil could improve transparency further by publishing information on “quasi-fiscal activities” – hidden corners of budgeting where concern has focused on public enterprises, such as Petrobras and development bank BNDES. The IMF says that Brazil’s government can communicate fiscal risks better to citizens, and Transparency International has suggested anti-corruption enforcement is weak.

Kasznar believes that a lack of federal pressure on states that budget poorly – and the asymmetrical nature of federalism, whereby wealthy southern states subsidise poorer northern ones in deficit – pose key barriers to effective participation. He says: “Budgets in Brazil are extraordinarily asymmetric and what we have in effect is a political and fiscal war. Creating more participative action under the characteristics of endemic deficit is absolute madness. So participation is good when it is based on correct rules – but if you have asymmetry, it can be very dramatic.”

A problem that clearly bedevils the pursuit of wider participation in Brazil is that it has become something of a political football.

De Renzio suggests politics is behind the reversals being witnessed today – even though participation may be needed now more than ever. "If the government were to go out and use these participatory mechanisms to negotiate the content of its austerity measures, inevitably they would have to confront the fact that not only is there a lot of opposition to them but also they would have to look into things they are unwilling to, such as tax reform,” he says.

Nonetheless, there remains a consensus that Brazil can offer real lessons to other countries about meeting what Petrie calls “an appetite from citizens for more direct engagement”.

De Renzio says: “In Brazil, they were allowed to experiment to address their own legitimacy problems. So the lesson that countries can learn is that governments shouldn’t be afraid to open themselves up to public scrutiny and provide information that allows people to understand what they are doing and also gives them opportunities to get involved in decision making.”

Participatory budgeting

Public participation gives citizens an opportunity to get involved in planning, budgeting and other government decisions and can support administrations in being accountable and responsive.

It can help improve performance by helping governments understand public priorities and what the public wants and expects from them, as well as informing people about how governments work and the results of their work. Public participation can also be useful as a way to adjust services in response to feedback and when to establish long-term, sustainable strategies.

The best public participation approaches encourage all citizens to take part and governments should make efforts to reach out to all groups. Common methods of identifying citizen preferences include surveys, interviews, public meetings, focus groups and comment cards, as well as public or neighbourhood advisory groups, committees and informal taskforces.

The Global Initiative for Fiscal Transparency has developed principles that recognise public participation is essential to open government and that both citizens and civil society groups have the opportunity to participate directly in public debate and discussion in respect to the design and implementation of fiscal policies.

GIFT says the open and inclusive nature of public participation processes stand in contrast to private lobbying of public officials. However, there is a risk that the process will favour well-placed groups who are more involved in government affairs. It is therefore important that the design of public engagement processes ensures that participation is broad based and diverse.

Gavin O'Toole

A freelance journalist. He has written six books about Latin America and taught the politics of the region at Queen Mary, University of London.

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