Porto Alegre’s Participatory Budget – A Genuine Alternative?
The Porto Alegre Alternative: Direct Democracy In Action, edited and translated by Iain Bruce (Pluto Press/IIRE, 2004)
Reviewed by Paul Flannigan
10th December 2004
This IIRE publication does not try to account for the neo-liberal deviation of the recently installed Workers Party (PT) government headed by President Lula. This is a pity, but perhaps it is still too early to tread over the hallowed ground of one’s wayward partner in government. The chief concern is to describe and defend the twin Porto Alegre experiences of direct democracy and participatory budgeting (PB). Only a little while ago a public defence of the Porto Alegre experience seemed hardly to be necessary. Porto Alegre was the organising centre of the global justice movement and its righteous status went almost unquestioned. The occasion of the Lula government has altered things a little, the Porto Alegre Popular Front now has to explain and justify the PT way of governing, a way that used to be taken by most of the global justice ‘movement’ mainly on trust, this can only be a good development for nothing in political life should go unquestioned.
Some supporters of the Porto Alegre Popular Front evidently think that their participatory approach is now being unfairly treated on the basis of a party political affiliation with the increasingly disreputable Lula’s government. A well-publicised attack on the Porto Alegre approach to local governance by João Penha may well have provoked the publication of this counterblast of essays. Penha (1) recently argued that the participatory budget was nothing short of an ‘elaborate confidence’ trick instigated by the World Bank and the IMF to involve the mass of Brazil’s poor in the supervision of their oppression. ‘Why has the World Bank characterised the PT-led city government of Porto Alegre as the best pupil of the world bank and the IMF?’ he asks. For Penha the participatory budget was no better than ‘participatory austerity.’ Community organisations and trades unions enlisted for participation in local decision making based on austerity budgeting were simply being ‘co-opted,’ being transformed into relays for the dictates of the IMF. Thus in chapter one editor Iain Bruce writes ‘the texts in the rest of this book should make clear how difficult it is to recognise either the theory or the practice of Porto Alegre’s PB in Penha’s description.’ (p33)
Porto Alegre is the state capital of Rio Grande do Sol, a city of some 1.4 million people that is also at the core of a metropolitan region with a population of around 3 million. The participatory process started in 1989 following the election of PT candidate Olivio Dutra, a former bank workers union director and self declared ‘Christian Marxist’, as mayor. There are two ways by which the population can participate; either territorially in one of the 16 city regions were they live or thematically, relating to the process is via subject matter. In the main the regions select their top four priorities out of a list of 14 budget headings. At present the list comprises sewers and drains, housing, social services, paving, water supply, education, street lighting, health, transport, leisure areas, sports and leisure, economic development, culture, and environment improvement. In the thematic meetings, priorities of a more city-wide character are decided. These thematic meetings were introduced in the mid-1990s, partly to offset the problem of parochial bias and partly to bring in the non community sectors like the unions and business associations. In both regional and thematic meetings candidates are elected to a delegate forum – there is one forum for each region and each thematic area – these then elect a citywide budget council. The PB council is a permanent yet voluntary body, which has overall responsibility for managing the PB process. It meets twice a week and is tasked with combining and reconciling the priorities put up by the regional and thematic meetings. The regional and thematic delegate meetings are staged once a month and are charged with translating the general demands discussed at the community meetings into specific proposals.
The local political structure is such that the mayor’s office serves as the executive, and the Chamber of Deputies as the legislature. The executive prepares the budget, which then has to be ratified by the Chamber. Two institutions of the mayoralty – the planning office (GAPLAN) and the Coordination of Relations with the Communities (CRC) – manage the budgetary debates with city residents. While CRC works through its regional coordinators with community leaders to set up discussion assemblies and to aggregate community claims, the responsibility of squaring citizen demands with technical and economic viability lies with GAPLAN.
The city is divided into sixteen regions. There are two rounds of plenaries in each region relating to the themes. The citizens groups meet around March just before the first round of formal assemblies to register demands and mobilize the community to select regional delegates. The municipality is not formally involved in these intra-community discussions. The first round of meetings between the citizens and the executive follows in April, in the presence of the mayor, to review investment plans of the previous year, discuss proposals for the new year, and to elect people to be delegates at future deliberations. Between the first and the second rounds (March to June), informal preparatory meetings are held to discuss demands for investment in sectors as presented by the various community associations (unions, cooperatives, mothers’ clubs, etc.). These demands are then ranked on an ascending scale of 1 to 5 by the participants. These are then aggregated by the executive together with points earned through two other criteria: i) need – measured by how much of access a region has had to a particular service, and ii) population size. The maximum points that can thus be attained are 15: 5 points if a region has had less than 20% access to a service, 5 if it has more than 120,000 inhabitants, and 5 if people rank it top on their list of demands.
The second round takes place in July when two councillors (and two substitutes) are elected from all 16 regions (32 delegates), from all the 5 themes (10 delegates), in addition to a member each from the civil servants’ trade union and an umbrella organization of neighbourhood communities (2 delegates) to constitute a 44-member Council of Participatory Budgeting (COP), which is essentially the main participatory institution. These councillors then familiarize themselves with the state of municipal financing, debate criteria for resource allocation, elaborate their constituents’ demands, and revise the budget proposal prepared by GAPLAN and the mayor’s cabinet. For these tasks, the COP convenes for two hourly meetings once a week until September 30 when a final budget proposal is submitted to the legislature. Between September and December, the COP follows the debates in the Chamber and lobbies intensely, while working on a detailed investment plan that lays down all specific public works and corresponding amounts to be allocated to each region. The executive drives the COP process by coordinating the meetings, setting the agenda and having its departments present information before allowing interventions from the councillors to seek clarifications. In the end, the way resources get divided up is through a weighting system that combines the subjective preferences of citizens with the objective quantitative criteria.
The UN has nominated Porto Alegre as the Brazilian city with the ‘best quality of life.’ The city has registered some notable achievements in recent years, credit for which is often attributed to the existence of the participatory budget. Between 1989 and 1996, the number of households with access to water services rose from 80% to 98%; percentage of the population ; service by the municipal sewage system rose from 46% to 85%; the number of children enrolled in public schools doubled; in the poorer neighbourhoods, 30 kilometres of roads have been paved annually since 1989; and because of a new transparency affecting motivation to pay taxes, revenue has increased by nearly 50% (budget resources for investment only went up from US$54m in 1992 to US$70m in 1996). Flying in the face of pressures to privatise public services, the city is considered to have the best publicly owned bus service in Brazil.
The advocates maintain that there are three broadly progressive outcomes: a change to local spending priorities to the benefit of the economic periphery, collective mobilisation of the poor and working class, leading to a rise in class morale and political consciousness. The participatory process has successfully directed local resources into the regions of the city in greatest need, known as the periphery. In the first budget it was agreed that 70% of available spending would be directed to the five poorest regions of the city. The participatory process has the most impact in mobilising the poorest sectors of the community into self-organised action. In the beginning only around 900 people participated in the first plenary, but by 2002 the numbers involved had soared to over 30,000, and these were overwhelmingly drawn from the poor and working class. Thousand of people have become active in all sorts of new community organisations that have come to life all across the city. The collective morale of the poorer communities has been raised. The PB has broken the spell of the expert and the accountant over local finance and spending, it has broken up the often corrupt relationship between private firms and public contracts. Tens of thousands of people have arrived at a political consciousness that is critical of the representative version of local democracy.
The spending restrictions placed over the participatory process mainly motivate the social activists to demand an expansion of its range. The chief frustration is that the local administration only has a very limited control over municipal spending, the investment fund made available in 2003 amounted to just 12% of the total municipal spend. The greater part of the local spend is assigned to covering the wages of public servants. Federal and municipal statutes also oblige city hall to spend 30% of the local budget on education and at least 13% on health. Last but not least, the total fund available for municipal spending is woefully inadequate to begin with. Only 14% of the national tax take is controlled by city halls, the rest is controlled by central government. Political awareness induces an understanding of just how much the participatory process is being restricted by the neo-liberal policies of the central government. So in spite of the participatory process one study showed that between 1995 and 1999 inequality in the Porto Alegre Metropolitan Region rose by some 16%, child labour increased by 11% and the numbers of those classified as poor increased by around 20%. One big factor in all of this was the central government’s withdrawal of funds for basic social and welfare programmes. During the third PT administration when DS (2) leader Raul Pont was mayor, the central government abolished all central government spending on social housing. In 1998, the central government cut its spending on sanitation to less than a quarter of the previous level and tied up most of what was left in financing the privatisation of water and sewage. A strident opposition to globalisation and neo-liberalism has become very prevalent and it is no accident that Porto Alegre has become synonymous with the slogan ‘another world is possible.’
The editor does not pretend that Brazilian style participatory democracy is free from political ambiguity. It is admitted that there are in fact several competing versions, with over a hundred municipalities now operating some form or other: the Porto Alegre model has a rival one dubbed here as the moderate PT model, one supported by President Lula. In Brazil most participatory schemes are inseparable from a struggle between various left and right political tendencies operating within the PT and there is even one scheme administrated by the far-right Liberal Party. Several of the contributions here argue that most left criticism of the participatory approach is misdirected because it fails to take note of the differing applications of the participatory process in Brazil and in other parts of South America. The example of the town of Santo André, and its mayor, the now deceased Celso Daniel, is depicted here to illustrate the difference. The PB process he constructed and received backing for by the PT leadership meant that half of the PB council consisted of representatives of the city hall nominated by the mayor and with the right to vote. Indeed a two thirds majority rule on the PB presiding committee gave the local government side an effective veto in instance of disagreement. In short the PT’s moderate version of the participatory process does not allow for a wholesale transfer of sovereign power to the people. In 1999 Celso Daniel wrote the keynote section of the PT policy document that sought to define a new relationship between the public and the private based on the dialogue and social partnership participatory model, in reality it was a major revision to the original participatory democracy.
There are other ambiguities that the book ought to deal with but doesn’t. The relationship between the participatory process and the normal representative one is not fully explained. It appears that elected town councillors in the main accept the decisions of the popular assemblies with a minimum of fuss even though far more people actually vote for the councillors than actually participate in the community assemblies. It doesn’t seem likely that this is sustainable without conflict. What of the non-organised sectors of the population, do they feel discriminated against? How radical really is the participatory budget when the money that is collected and spent is raised from local household tax? The participatory process seems to invite local communities to deliberate and bargain for money that is taken from out of their own pockets. It is not as if the local tax is extracted solely from the capitalists and the middle classes. One of the claims of the participatory process is that it unities the communities of the poor and the working class but does it not also create group conflict and division. In April 2004 a strike by teachers was broken by the Popular Front administration. (3) In the propaganda battle it was often said that the Popular Front was holding out on behalf of the communities of the poor and the participatory budget. It is interesting to note that in the discussion section of the book one of the contributors complains that too much of the Porto Alegre budget (65%) is claimed by employee wage costs. Another source of ambiguity might have been cleared up by explaining how come the Porto Alegre budget is able to supply all kinds of community services at way below market cost. Porto Alegre for example has acquired over one hundred day-care centres, all run by community groups, ten for the price of what it used to cost to operate just one. Could it be that surplus labour of the periphery is being hired at a very low rate?
Despite the awkward ambiguities which may be taken as obstacles the participatory process has improved the social conditions for thousands of people living in the economic periphery. It undoubtedly has been a valuable school of political learning for many of the poor. But the bigger issue to be discussed is what ideological significance it has for contemporary socialism. Some of the contributing activists certainly mean to raise it to an emblematic importance. This is a little surprising given that they also express a loyalty to the revolutionary tradition as founded by Leon Trotsky.
The main thesis is that socialists in Brazil ought to concentrate their best efforts on spreading the Porto Alegre model to cover federal and national development. The current limitation of the participatory budget is that it is not able to control the tax and spend capacities of both the federal and central governments: ‘the state must be democratised and participatory democracy developed at the national level’ (p143) and ‘the demand for a nationwide participatory budget is now a fundamental part of the struggle to change the direction taken by our PT government’ (p107). This is a proposal for a profound redrafting of the revolutionary strategy in two ways. First, it would mean a disavowal of the smashing of the capitalist state as a strategic conception; second, it would mean a shifting of the main battle ground for advancing the struggle. Instead of agitating for a class confrontation with the capitalist state, socialists would opt to build up an ‘alternative power structure’ that gradually drains away the legitimacy of the bourgeois state.
In the ideological parts of the book the typical refrain translates the adversarial meaning of socialist tactics into the principled idealism of democratisation and citizenship. Raul Pont declares ‘The question of democracy should be the guiding principle of all our political activity…this commitment to the struggle for democracy, to a new logic of democracy should shape everything we do, our relations with our supporters and with social movements and the policies of our popular governments and José Brizole, a participatory councillor, says ‘if citizenship is one of the most important things this participatory budget has created citizens, it has turned so many people into conscious citizens.’ Within the ideal capitalist legal framework ‘citizens’ are accorded equal rights, and an equal access and influence over both local and central government. But in the real world of capitalism some voices shout louder than others and are listened to more attentively, the divine right of citizen capital to dictate is supreme. (4) The logic of citizenship is determined by the holders of capital and in Brazil it is doubly determined by finance capital that isn’t even resident: the international bond holders that control the country’s debt. A socialist strategy that adhered to the logic of responsible citizenship under capitalist conditions would easily become the dupe of capital and its programme of cost cutting and low taxation. The working class ought to be steered well away from every citizenship morality, including the communitarian version, lest they become the responsible law-abiding citizens of capitalist law.
We cannot agree with a socialist strategy that sets so much store on democratisation of the actually existing state. In class society the meaning of democracy is relative not ideal, it is a method of selecting the political regime of the ruling class, a class that already has economic dominance because it controls the means of production. A democratic regime therefore is not the dissolution of class rule but a selective form of it. The strategy of democratisation, of returning the state to the mass of the people, is really only a substitute morality for a socialist movement that lacks the courage in its anti capitalist convictions. A democratising of the capitalist state does not bring into being a dual power institution like a soviet, it has no control over the means of production, it is merely a small variant within capitalist democracy. One other troubling thing about this new way of thinking is the tendency to speak of democracy as if it constituted a system of morality in itself, a sort of categorical imperative that socialists ought to acquaint themselves with and then rigidly adhere to. This we can attribute to an overreaction to Stalinism, but it is not the most helpful way of overcoming the ‘Machiavellian’ problem of treating democracy only as a means to an end as Stalinism always did. In conclusion, while we welcome the willingness of the left of the PT to innovate, we think they are leading the Brazilian working class and poor in a totally wrong direction. The capitalist state will never go quietly into the night.
2. Raul Pont was one of the founder members of the PT and has become known as one of the theorists of the participatory process. He is a leader of the Socialist Democracy (DS) current within the PT and is a previous mayor of Porto Alegre. His importance is recognised by affording him three of the contributions in this book. Other prominent members have made contributions to the book, including Ubiratan de Souza (an official of the Rio Grande do Sul budget and finance department) and João Machado.
3. On March 2, 2000 an assembly of teachers belonging to the State Union of Teachers voted by four to one to strike to make good a wages pledge. The strike lasted for more than a month but was broken by the Popular Front government of Rio Grande do Sul.
4. The American Declaration of Independence
speaks for all capitalists when it declares, ‘We hold these truths to be
self evident, that all men are created equal, that they are endowed by
their creator with certain unalienable rights, that among these are life,
liberty and the pursuit of happiness.’ Bourgeois right claims divine sanction.