How participatory budgeting gives citizens a say in financial matters

Porto Alegre in southern Brazil: The city is part of a long tradition of participatory democracy in South America. Keystone/Michael Runkel

Participatory budgeting is a democratic process that gives people power over public spending. Switzerland and Argentina have two different approaches to involving citizens in money matters – both with a real-life impact in the end. 

This content was published on November 2, 2022 minutes

“Participatory budgeting” – where everyone can have a say on how public money is used – has become an increasingly import global feature of modern democracy. Citizens in Madrid and Paris have already had several opportunities to decide how multi-million-euro budgets are spent.

But to this day, Switzerland is the only country in the world where the participatory method is applied as a binding rule, according to the Italian research group Politis.

This is the case in Aarau, for instance, a town between Bern and Zurich. It holds mandatory referendums on financial matters if the expenditure exceeds CHF6 million ($6 million). Voters may also have a say on any other budget item through an optional referendum as long as 10% of residents sign up to hold a vote within a specified time period.

From top-down to bottom-up 

Elsewhere however, the practice has remained a top-down process with high dependence on the goodwill of local leaders. Also, limitations of the available financial resources and difficulties including a diverse group of people has sometimes undermined the efficiency of participatory budgeting procedures. These are problems the National University of Rosario (NUR) in Argentina wanted to address.

It has launched an innovative initiativeExternal link to give the academic community a say on how funds are used on campus. It allows demands and ideas from students, teachers and staff to become collective projects at the university after getting approved by a vote.

Such participatory budgeting is a democratic process that gives people real power over real money. Since the launch of the initiative, the university has decided to create a new meeting space in the business school, to buy 3-D technology printing material and to upgrade the kitchen in the agrotechnical school.

“I learned how to build ideas collectively,” says Carla, one of the university student participants. “Creating a community” was one of the main goals of the initiative implemented for the 12 faculties of the NUR and in its three associated schools - Agrotechnical, Business and Polytechnic. It aimed to promote civic education, especially for youth, encourage collaboration and democratise decision-making.

“Participatory budgeting became a forum to express the needs and wishes of the university members in the pandemic, a meeting point to talk, propose, deliberate and decide in the lockdown period,” says Cintia Pinillos. According to the professor of comparative politics at NUR, it is no coincidence that most of the winning proposals during this past cycle are about access to new technologies and the creation or renovation of meeting and leisure spaces.

The concept of participatory decision-making isn’t new to Rosario. With around 1,690,000 people, the city is the third largest in Argentina after Buenos Aires and Córdoba. The port of Rosario, on the Paraná River, exports most of Argentina’s cereal production. Its economic importance is central also for its industrial sector.

Since the nineties, the city has been an outstanding example of the promotion of participatory democracy in Argentina. However, the recent surge of drug trafficking and urban violence, has made a stronger case for new forms of engagement. It is in this context that the University of Rosario engaged academics in participatory budgeting.

Three stages to participatory budgeting

There are three stages to participatory budgeting at the university. First, the university and school forums open virtual platforms to receive proposals, share comments and enrich ideas shared by others (in 2021, 1,645 people participated and proposed 226 ideas).
In the second step, a university commission and school councils are involved in evaluating the ideas and developing them further. Last year, 198 participants worked on 94 ideas that were turned into 18 projects for the university and 25 for the schools that were passed by a vote.
In the third stage, people vote on the projects and the projects move forward. In 2021, some 4,169 people voted on the projects.

End of insertion

The initiative itself comes on the back of a long tradition of participatory democracy in South America. In the city of Porto Alegre in southern Brazil a process was launched to engage people in local financial decisions during the nationwide transition from an authoritarian regime to a democracy in the late 1980s.

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It began as a mechanism for citizens to propose and/or debate and decide on a small percentage of the budget of the city. Although initially promoted by left-wing officials such as the Workers’ Party in Brazil, the United Left in Peru, or the Broad Front in Uruguay, it soon spread to cities governed by right-wing leaders.

The World Bank and other international institutions view participatory budgeting today as “good practice”, noting that it could be an effective tool to combat corruption and provide knowledge of citizen demands and possible solutions. To date the Global Atlas of Participatory BudgetingExternal link displays more than 11,000 case studies in 71 countries.

The most documented processes – four out of five in the Atlas – are hosted in countries, which can be called “imperfect democracies”. Additionally, the process is also used in cities in countries currently measured as “autocracies” such as Budapest or Moscow. According to the Global Atlas, “full democracies” may not see it as an important democratic tool due to the higher living conditions, and because people in such countries have high levels of trust in their institutions.

It might come as a surprise that the Global Atlas does not include Switzerland in the list of countries hosting participatory budgetingExternal link, even though it is considered a full democracy.

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In reality, another more binding kind of “participatory budgeting” has a long tradition in countries with strong direct democratic tools on the local and regional level like the United States and Switzerland.

Here citizens can put a government decision to a popular vote by gathering a certain number of signatures. In many cases such popular votes are also mandatory if the spending by the city exceeds a certain amount. In other words: they get the last word on financial matters. 

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