|This Best Practice is one of
Best Practices for Human Settlements
presented in the MOST Clearing House
Best Practices Database.
The history of conceiving and executing public budgets in Brazil is marked by serious deformations related to power concentration, resource waste, political affairs and corruption. In Porto Alegre, this history has been changed. Seven years ago, the City Hall of Porto Alegre created an innovative and revolutionary system to formulate and follow-up the municipal budget.
In this system, named as Participative Budget, there are not only technicians and government leaders who, closed in their offices, decide on the collection of taxes and public money spending. It is the population, through a debate and consult process, who defines and decides on amounts of income and expense, as well as where and when the investments will be done, which are the priorities and which are the plans and actions to be developed by the Government.
The Participative Budget has proved that the democratic and transparent administration of the resources is the only way to avoid corruption and mishandling of public funds. Despite certain technocratic opinions, the popular participation has provided efficient spending, effective where it has to be and with results in public works and actions of great importance for the population. Since its beginning, the projects decided by the Participative Budget represent investments over 700 million dollars, mainly in urban infra-structure and upgrading the quality level of the population.
The Participative Budget has also proved that the intention of having effective tools of participation and the commitment of the Government in doing whatever the population decides, is essential to cut the chains and the bureaucratic barriers that separate the society from the State, forming an active and mobilized citizenship. In Porto Alegre, today, the citizens know and decide on public issues, transforming themselves, therefore, in agents of their own future.
The Participative Budget is known by 60% of the population, according to a public opinion research and millions of people participate actively in the process in meetings, regional conventions or in specific thematic assemblies.
Presently, all over Brazil there are at least 70 cities who are establishing the Participative Budget system, based in the past experience Porto Alegre has.
Porto Alegre is the Capital of the State of Rio Grande do Sul, has one million two-hundred and ninety thousand inhabitants and is located in the center of a metropolitan region with three million inhabitants. Until the beginning of the eighties, Porto Alegre experimented an accelerated population growth process, which combined with the strong concentration of the existing income, generated a serious instability and left one third of its population at the margin of the urban infra-structure.
This population has been historically forgotten by the former municipal administrations. In 1989 there was a huge amount of citizens living in non-legalized city sections, where there were shacks without drinkable water, sewerage system or paved streets. That meant an enormous debt of the Public Power with a significant part of the population. That is so true that right after the Participative Budget started, it could be proved that some people had fought for over 30 or 40 years seeking a sewerage system or a paved street.
The governmental institution totally centralized and non-democratic was an insurmountable obstacle to a transparent relation with the society. The City Hall decided the investments leaving the population completely marginal to the process, following different priorities from the ones sought by a significant part of the population.
Besides that, the City was facing a financial/administrative unbalance of structural nature. The income of the City Hall, originated from taxes, was completely out of balance and was not enough to finance not even a minimum of public works that needed to be done to balance equally the development of the city and start to rescue the social debt accumulated with the millions of citizens who lived in the level of misery.
In 1989, when it started, the Participative Budget faced this awkward situation that, added to the newness of the system, resulted in a modest popular participation of the population. In 1990, the participation was kept in restricted levels, specially due to the financial difficulties the City Hall was facing. From this point on, when the City reacquired its investment capability, which happened through a strong tax reform, the Participative Budget received a strong push forward. The Government started to have funds to fulfill the demands and the population started to feel and see with their own eyes that their decisions were being respected and were resulting in a better life level.
From 1991 on, the Participative Budget became a massive and thrilling process which started to mobilize the communities of all regions. In 1994, for instance, more than 11 thousand persons and in 1995, more than 14 thousand persons attended the meetings and the regional assemblies directed coordinated by the City Hall. If we add to this number of people, the huge quantity of local associations and popular organizations, we will end up having over 100 thousand persons linked somehow to the creation of the City Budget. Besides that, circa one thousand entities and associations are registered at the Participative Budget.
The results of the Participative Budget
Since the Participative Budget has been consolidated, the City Hall has steered a percentage varying from 15 (fifteen) to 25 (twenty-five) percent of the income to investments - the rest is spent in paying staff and the normal administrative expenses. This way, according to what was mentioned in the beginning, the works decided by the Participative Budget represent investments of over 700 hundred million dollars.
Throughout the years, the basic sanitation works have been prioritized by the Participative Budget. This has allowed the increase in the water supply, between 1990 and the beginning of 1995, from 400 (four hundred) thousand to 465 (four hundred sixty-five) thousand households. Today, 98 (ninety-eight) percent of the households are served by the water system. In regards to the sewerage system, the growth was even bigger. In 1989, 46 (forty-six) percent of the population was served by the sewerage system and, presently, 74 (seventy-four) percent is being served.
With the forecasted investments to be executed in the next period, we should come to the end of 1996 with 85 (eighty-five) percent of the population being served by a sewerage system.
Another item that is a priority in the Participative Budget is the street pavement in the suburbs. Annually, between 25 and 30 Km of streets of paved in the poorest city sections and suburbs. Drainage, public lighting and the urbanization of areas, health and lodging are other issues that are considered priorities.
In the education field, the decided investments by the Participative Budget allowed more than duplicate the total number of enrollments between 1988 and 1995, along with an upgrade in the quality of the education.
But the results of the Participative Budget can not be and should not be judged by numbers and percentages only, even though this is fundamental to prove that the participation, the transparency and the democracy can make the public spending a lot more efficient and effective.
As important as the actual results of the Participative Budget, we must add the redemption of the citizenship of Porto Alegre and its awakening for an active participation in the public affairs.
The functioning of the Participative Budget has been improved in the last years, trying to solve the most different problems that were arising. Right at the beginning it became very clear that the priorities from the poorest regions, where most of the population live, were very different from the ones with better financial conditions. In the poor sections, for instance, the basic sewerage system was the most needed and sought, while the rich suburbs were claiming for a cleaner city with more parks and boulevards. On other hand, inside the poorest city sections there was not a common sense, being some more, others less organized towards their claims.
Another problem that was faced was the tradition of the political relationship based on the exchange of favours that existed between the Public Power and the citizen. Such tradition, strongly attached in our political culture, leads to passivity and not to participation. Also, there was no previous experience in debating important and technical issues, such as the budget. There was, still, even after the tax reform, the fact that the income was not enough to cover all the demands of the society.
It was needed, therefore, a solution that would brake, that would tear apart the passivity and the political relation. Participation has to be stimulated to define the investments and the expenses based in objective criteria, accepted by the communities and able to cover all the city, from an existing priority list that would accommodate all the enormous differences.
The ways found to solve these problems, to assure full participation, guarantee the
democracy in the process and make the discussions richer, educational and productive, are
1) The city was divided in 16 sections, based in geographical, social and community organization aspects, through which is organized the full participation of the population; also, to enable other citizens and entities linked to other issues, such as women's rights, health care, cultural associations, to participate, five other participation structures were created from the issues themselves: city organization and urban development, transport and circulation, health and social care, education, culture, leisure and financial development and tax planning.
Yearly, the City Hall promotes at least two huge assemblies in the regions and the in the issue structures. In the first one, the accounting of the approved investment plan in the previous year is shown to check what was actually done, what is in progress and what has not been initiated and why. This is when the Public Administration can be criticized by the population. This phase guarantees the transparency needed to the process, a fundamental condition for the frank relationship sought by the Participative Budget. In the second one, the inhabitants of each street, each city section and the participants of the thematic structures choose their priorities and elect the counselors of the Participative Budget.
Between these two phases, there is place for an intermediate phase, in which there are a lot of meetings, in the thematic as well as in the regional sphere (which are subdivided into micro-regions). It is when the population brings up their needs and establishes a certain priority for the most urgent works that need to be done. Even though this is done in smaller meetings, this phase is the key of the process because in order to establish the priorities the population ends up expressing its wish, causing a healthy discussion of what is more important.
2) After the priorities are chosen and the delegates and counselors of each region and thematic structure are elected, the Regional and Thematic Delegate Forum and the Municipal Council of Government Plan and Budget are formed.
The Municipal Council of Government Plan and Budget is formed by 2 (two) main counselors and the same number of elected substitutes in each of the 16 (sixteen) regions of the city, by 2 (two) main counselors and the same number of elected substitutes in each of the 5 (five) thematic structures, by 1 (one) main representative and 1 (one) substitute of the Municipal Employee Union and 1 (one) main representative and 1 (one) substitute of the Union of Inhabitant Associations of Porto Alegre. The government representatives are in the number of 2 (two), not having the right to vote. The mandate of the counselors is of 1 (one) year, with the possibility of a following reelection. This mandate, however, is revocable at any time, through a specific process to take place in the Regional and Thematic Delegate Forum and requires the qualified majority of 2/3 (two thirds).
The Council coordinates and organizes the process of conceiving the budget and the
investment plan and, later, checks the execution of the planned budget. There are regular
weekly meetings where a debate list is brought and a permanent link with the Executive
Power is activated.
3) After the meetings in the Thematic Structures and in the Regions and the constitution of the Delegate Forum and the Municipal Council of Government and Budget Plan, the final sketch of the Municipal Budget and the Investment Plan is starts to be drawn. Firstly, the all the Secretariats together with government organs participate in the meetings of the Municipal Council to discuss the works, their cost and technical feasibility. With that type of information in hands, the counselors and delegates establish new debates with the communities. Following, the Executive Power presents the counselors with a detailed budget proposal, including all the income/expense items. After the three big numbers of the Budget are defined, the next step is the definition of the Investment Plan. Three criteria are observed in conceiving the Investment Plan: a) the priority of the region (chosen in the regional assemblies - sewerage, education, street pavement, etc.); b) the total population of the region (the most populated areas receive a higher grade); c) lack of the service or infra-structure (the poorest regions receive a higher grade). Crossing these criteria and discussing with the population is when, then, is defined the investment and the works that will be effected in each region of the city, proposed by the Thematic Structures and by the own Government.
At the end of the process the Investment Plan is subject to approval by the Municipal Council of the Government Plan and Budget.
4) After the approval of the Municipal Budget by the Council, the proposal is sent by the Executive Power to the Municipal Town Councilors. It is here the actual joint of the direct and participative democracy with the representative democracy. It is a naturally tense and difficult relationship that has proved to be extremely positive. The town councilors discuss with the Executive Power and with the counselors about the numbers of the budget, present amendments and eventually change suggestions. A strong negotiation is then established, resulting important changes that do not affect the global structure of the budget, as the town councilors themselves know that the budget came out of a truly process of political and social representativeness.
Porto Alegre City Hall
Porto Alegre City Hall
Utzig, Jose Eduardo
Ferrer, J. Carlos Camargo
To MOST Clearing House Homepage