toward a more inclusive and effective participatory budget in porto alegre
TRANSCRIPT
Toward a More Inclusive and Effective Participatory Budget in Porto Alegre
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AGENDA
1.Context2.Objectives3.Scope and Methodology4.Impact Evaluation5.What else have we learned?
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CONTEXT
Porto Alegre was one of the first local government to adopt PB as the core policy for improving governance and reducing social inequalities
Macro Changes in Brazil: The process was initiated during the early years of re-democratization and decentralization in Brazil, which significantly expanded the fiscal, political and administrative space of local authorizes
Local Innovation: It started as a response to social pressure for opening decision making and reducing social inequalities, but also as a strategy of a progressive mayor to gain social support for his progressive agenda under a constrained fiscal situation, and adverse local council
No Single Model: From its early experimental phase, PB has evolved from a very simple governance approach to highly diversified forms of engaging citizens in the budgeting process
Global Dissemination: From a left-wing administration in Porto Alegre, it rapidly expanded in more than 200 cities across the political spectrum in Brazil, Latin America, North America, Europe, Africa, and Asia
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CONTEXT
ESW: Joint initiative of LAC Social Development Unit and the Social Development Department Anchor
Demand driven: Municipal Government of Porto Alegre and Participatory Budgeting Council (COP) requested WB support to strengthen the PBsustainability
PoA moved from a fiscal surplus to deficit in 3 consecutive years
About R$ 30 million of public investments prioritized through the PB process on hold
Transition in political leadership
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OBJECTIVES
Analyze the key challenges and recommend strategic reforms for improving the PB process
Research Questions: How can the “quality of participation” in the PB be
improved? How can the interface between the PB and municipal
fiscal management be strengthened? How can the capacity of the PB to monitor budget
execution be improved? How can a more coherent system of social accountability
in the city be established, How to improve the articulation between the PB and
different participatory fora? What are the social and fiscal impacts of the PB?
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SCOPE AND METHODOLOGY
Conceptual Framework
WDR 2004: “the long route of accountability”
OP OP
The state
Politicians Policymakers
Voice Long route of accountability
Citizen/clients
coalitions/inclusions
Non - poor Poor
Providers
Management
Frontlin e
Organization s
Client power Short route
Compact
Services
PB The state
Politicians Policymakers
Voice Long route of accountability
Citizen/clients
coalitions/inclusions
Non - poor Poor
Providers
Management
Frontlin e
Organization s
Client power Short route
Compact
Services
The state
Politicians Policymakers
Voice Long route of accountability
Citizen/clients
coalitions/inclusions
Non - poor Poor
Providers
Management
Frontlin e
Organization s
Client power Short route
Compact
Services
The state
Politicians Policymakers
The state
Politicians Policymakers
Voice Voice Long route of accountability
Citizen/clients
coalitions/inclusions
Non - poor Poor
Citizen/clients
Coalitions/inclusions
Non - poor Poor
Providers
Management
Frontlin e
Organization s
Providers
Management
Frontline e
Organization s
Client power Short route
Client power Short route
Compact Compact
Services Services
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SCOPE AND METHODOLOGY
Chapter 1: Quality of Participation representative survey of Porto Alegre households
1300 interviews Desegregated by gender, age, income, and territory
Focus groups with PB participants and non-participants Interview with key informants
Chapters 2, 3, 4: Interface between PB and Municipal Finance Management, Budget Execution Oversight, the broader local governance space
Information gathering covering the past 15 years Review of key data on municipal revenue and expenditure Review of budget policies and guidelines Review of key internal audit reports Focus groups with PB participants and non-participants Interview with key informants
Chapter 5: Impact Evaluation Uses econometric tools to undertake a counterfactual analysis of the fiscal
and social impacts 150 PB municipalities Porto Alegre
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IMPACT EVALUATION
The impacts of PB on Brazilian municipalities
Challenges/Limitations Need to isolate the influence of PB from other variables which
affect social and fiscal outcomes i.e.: tendency to find PB in LGs run by the Workers Party which have
progressive polices independently of having or not PB PB potentially impacts on many areas, which were beyond the
scope of the ESW Certain impacts are likely to occur over a longer time period
which data is not often available
Approach Use of well-known econometric techniques to evaluate impact on
intended variables Isolating the causal relationship is the most important aspect to
make compelling arguments Comparing Brazilian municipalities that adopted PB to a group of
non-PB municipalities with similar characteristics before the baseline point.
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IMPACT EVALUATION
Although Porto Alegre became internationally known for its progressive governance agenda, few studies tried to estimate the PB impacts
Marchetti’s (2004) evaluation concluded that PB in PoA led to a more progressive distribution of public goods, but did not provide contracfactual to compare results
Zamboni’s (2007) research used randomly Audit Report from CGU to suggest that PB municipalities were likely to have less corruption than non-PB municipalities
Baiocchi et all (2006) used cross-sectional data and a pairing approach to suggest a positive impact on empowerment and poverty reduction
The ESW built on these previous studies, but it used the same set of variables in years prior to the baseline to control for municipalities which have similar dynamics in the intended outcomes before PB was implemented
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IMPACT EVALUATION
Expected outcomes of participatory budgetingWhat effects are
expected from PB?
What are the mechanisms through which it causes the expected effects?
What variables are proxies for outcomes?
• Strengthened pro-poor capital investments
.
PB is a municipal governance approach that aims to close the gap between the preferences of the poor and decision making by means of empowering the poor to voice their needs in capital budget formulation. As such it is expected to come up in the short-term with a capital budget more consistent with the real needs of the poor.
• Access to water• Access to sewerage
By means of redirecting capital budget to pro-poor investment, it is expected that OP can have a mid- to long-term positive impact on poverty
• Poverty headcount
• Strengthened budget transparency and literacy
PB is municipal governance that aims to strengthen budget transparency and citizen awareness. As such it, is expected to come up with increased local tax compliance, a better balance between current and capital expenditure and a lower incidence of corruption
• IPTU divided by municipal GDP as a measure of the willingness to pay taxes
• Incidence of mismanagement of public funds (as evaluated in Zamboni)
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IMPACT EVALUATION
Positive social impacts However, impacts on poverty reduction is more evident in the
long run Positive impact on local tax collection However, the impact on capital investment to current
expenditures is negative
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What else have we learned?
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AUGUST/ SEPTEMBERDiscussion and vote on the Budgetary Matrix;
beginning of the distribution of resources for the regions and non
COP themes.
Second FortnightAPRIL/ MAY
Single round of assemblies in the regions; election of
the thematic priorities; election of councilmen.
MAY/JUNE/JULYRegions, Thematic
and Municipal Forums of
Employees; Election of delegates;
Prioritization of works and services.
MARCH/ APRIL
Preparation Meetings in the
regions; Integration
meetings of the delegate forums
and planning forums.
First fortnight JULY
Municipal Assembly
JULY/ AUGUST/ SEPTEMBERAnalysis of the demands and organization
of the matrix.
NOVEMBER/ DECEMBERDiscussion in the regional, thematic forums
and municipal forum of employees of the alterations of the Internal Regime, general,
technical and regional criteria.
DECEMBER/ JANUARYDiscussion and vote
on the Internal Regulation, general,
technical and regional criteria.
FEBRUARYRecess
OCTOBER/DECEMBERDetail of the Investment and
Service Plan. Finalization of the distribution of resources to the
regions.
Data to send the LDO to the Chamber of Councilmen – August 15th.
Approval of the LDO by the Mayor by Oct 10.
Sanction of the LOA by the Mayor – December 15th.
Data to send the LOA to the Chamber of Councilmen – October 15th.
Interface between PB and Municipal Finance
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Interface between PB and Municipal Finance
The revenue forecasting capacity deteriorated in recent years.
Accuracy of municipal income forecasts, 1995–2005
Expected Income = Actual Income
70%
75%
80%
85%
90%
95%
100%
105%
110%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
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Interface between PB and Municipal Finance
The share of investment prioritized through the PB in relation to total capital investment decreased in recent years.
Percentage of total investments planned by the PB, 1997–2006
0%
10%
20%
30%
40%
50%
60%
70%
80%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
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Interface between PB and Municipal Finance The capacity to executed the PB decreased
continuously
% of PB Priorities Executed
0%10%20%30%40%50%60%70%80%90%
100%
1999 2000 2001 2002 2003 2004 2005 2006
Ano
%
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PB as an Independent Budget Oversight Mechanisms
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PB as an Independent Budget Oversight Mechanism
Although the PB formally enables citizens to monitor the execution of the Investment Plan, oversight takes place mainly in an ad-hoc manner.
The PB has not fulfilled its potential to improve budget literacy, and has paid scant attention to budget oversight.
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The PB enjoys credibility among participants and the population of Porto Alegre as a whole.
56.91 28.57
53.6 30.11
51.71 29.16
57.26 26.68
65.88 23.61
0 20 40 60 80 100
Is very important
Broadens democracy
Increases government efficiency
Pro-poor
Improves quality of life
Totally Agree Somewhat Agree
%
Public perception of the PB by percentage of population, 2006
Quality of Participation
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Evolution of the number of PB participants1990 to 2006
02000400060008000
100001200014000160001800020000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Year
Number of OP participants General Total
Although the initial increase in the number of participants, the trend started to reverse in recent years
Quality of Participation
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Quality of Participation
Social groups that suffer from a lack of incentives to participate: extremely poor, youth, middle- and high-income groups, entrepreneurs.
Over-representation of elder people.
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Mismatch between the PB’s positive public perception and its weak internal accountability system
Uneven playing field for PB participants in delegating to upper levels of representation
Lack of systematization and records in reporting mechanisms between delegates and their constituencies.
Quality of Participation
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THANK YOU