“Participatory Budgeting”: Increasing Citizen Involvement in Municipal Development Strategy Formulation

A Case from the South: Porto Alegre, Brazil

Limited economic power is often accompanied by limited political power. Families with sparse financial resources may find it difficult to make their voices heard, and the poor are frequently underrepresented in the political process. This disparity in public sector participation tends to be reflected in the decisions made by national and local authorities, which often do not promote the interests of the marginalized.

Without an avenue for local political participation, disadvantaged populations are unable to affect change and may thus find it impossible to ameliorate their own living conditions. Without the full participation of its citizenry, a government is unable to fulfill its mandate as the people’s elected representative. It is therefore in the interests of both municipalities and marginalized populations to facilitate the political participation of the latter.

An innovative mechanism for such participation was established in the city of Porto Alegre, Brazil. The municipality developed a system called Orçamento Participativo, or “Participatory Budgeting”, that has since become a model for similar programs not only in Brazil but also in Latin America at large. Participatory Budgeting provides a method through which the entire community can participate in the process of governance. It also demonstrates that a truly democratic and transparent administration of resources is one of the most effective ways to avoid the corruption and mishandling of public funds and to ensure that investments are directed towards the most pressing needs of the most number of people.


Porto Alegre (pop. 1,290,000), the capital of the State of Rio Grande Do Sul, was a city characterized by high levels of income inequality, minimal transparency in government transactions, inefficient management of municipal resources, and low levels of electorate participation until the election of Mayor Olivio Dutra in 1989. Mr. Dutra initiated a change in municipal administration by implementing a sweeping program of tax reform that also increased tax revenue. Tax and tariffs were rationalized and indexed to inflation, and their collection was made more organized and efficient. There was also a dramatic change in property tax collection, which went from constituting about 5.8% of municipal revenues in 1990 to more than 18% in recent years. The increased willingness of people to pay taxes has been attributed to the transparency in municipal spending brought about by participatory budgeting. In 1993, Tarso Genro was elected mayor and brought a renewed enthusiasm to the reform process.

The Participatory Budget — How It Works

The driving force behind the budget reforms was this program of Participatory Budgeting (OP for short). OP is a voluntary and universal mechanism whereby any resident of Porto Alegre, whether individually or part of an organization, can participate in the design and execution of the municipal budget.

OP compliments the elected Chamber of Councilmen and Mayor by serving as a third municipal branch composed of civil society members. The city is divided into 16 regions, each of which forms a “Popular Council,” which in turn consists of is representatives from community associations and other local groups. These local councils convene to elect two delegates to the city-wide OP Council of Representatives. The elected municipal government assigns several city officials to act as liaisons to this council.

The OP Council of Representatives sets the agenda for municipal spending by compiling a list of priorities for public works. The agenda of each individual OP Council representative is set in consultation with elected delegates (called Regional Delegates, elected one per every 30 citizens) from his or her region. Before they come to any decision, the OP Council of Representatives and Regional Delegates hold multiple forums wherein any member of the region can come with general input or demands for specific projects like school construction or road pavement.

After gathering the ideas and suggestions of their constituents, the OP Council of Representatives and regional delegates sit down with elected officials to assign in ranking each of the proposals that have been put forward. The rankings are based on (i) what percentage of the population and area of the relevant district(s) lacks social services (ii) the total population of the district and (iii) the prioritizing by of the OP Councils of Representatives. For example, a request to pave a street that runs in front of a school will be weighted more heavily than a similar request for a street that has only a few homes. During Genro’s administration, the public set different priorities each year; in 1995, for example, paving 23 kilometers of streets in slums was the top priority. Last year, the priorities were sanitation, community street paving and housing.

The weighted system of project evaluation used in Porto Alegre is one solution to the conflict of interests that arises in a truly inclusive and participatory system of governance. With the interests of so many individuals and groups represented, a method was needed assure the systematic and fair consideration of each proposal. In addition, a weighted system of evaluation helped transform the formerly patronage-driven budget deliberations into a more accountable and transparent process. The mere presence of so many community members in the resource allocation process is enough to tie the hands of municipal officials and prevent others from seeking favors.

Annual spending was not the only participatory aspect of the Porto Alegre budgeting system. Thematic councils were established in addition to regional ones, and charged with the creation of long-term strategic plans for the city. Local organizations-including unions, environmental groups, business associations and student movements-form these councils and, working with municipal officials, they debate long-term goals and programs in key areas including health, housing, transportation, historic trusts and culture. The thematic councils set out broad policy directions that shape municipal development over several years, extending beyond the annual public works projects.

In addition, the OP process includes citizens’ annual review of the preceding year’s budget and the effectiveness of its implementation. This review occurs as the first round of the OP process, and it initiates the cycle of budget negotiations for the coming year. This review process is another way to ensure accountability and transparency in the execution of the budget, and it verifies that the decisions made through OP mechanisms are carried out by the municipality.


By all accounts, the Participatory Budgeting system of Porto Alegre has been extremely successful. Between 1989 and 1996, the number of households with access to water services increased from about 80% to about 98% and the percentage of the population served by the municipal sewage system increased from 46% to approximately 85%. Also since 1989, 200 km of road has been paved in the city. Porto Alegre is now the Brazilian State capital with the highest-ranked Human Development Index.

OP was also very popular among residents of Porto Alegre. An opinion survey about OP found that 85% of city residents either had been active in the budget process or considered it positive. When he left office in 1997, Mayor Tarso Genro boasted a 75% approval rating.

Orçamento Participativo has now been instituted in fifty other Brazilian cities. Soon, the system will be implemented in the Argentine cities of Buenos Aires and Rosario, and in Montevideo, Uruguay.

We would like to thank Mr. André Passos Cordeiro for providing us the information about his project.

For more information, please contact:

Porto Alegre, Brasil
Telephone: 55 51 216 1300
Fax: 55 51 216 1308
Email: andre@gaplan.prefpoa.com.br, passoscordeiro@ig.com.br