What Brazil Can Teach the World

We need to start looking elsewhere for ideas. This means
rejecting the assumption that we have nothing to learn
from 'poorer' countries. In fact, it may be in Brazil where
we can learn how to use our public money better. In particular
we could examine the participatory budget process.

Guy Burton

 

Last weekend central London was host to a tax protest. The thousands who marched were campaigning against the council tax, a levy which every household must pay to help maintain local government finances.

The tax has been in place since the early 1990s and supplements the grant ministers make to municipal authorities. But while the list of services councils must pay for has grown, the amount allocated by central Government has not increased with the same proportion.

Although the government has grabbed headlines for the amount it has provided for education this year, its local government grants for other council services (including social services for children and the elderly and street cleaning) are expected to rise by less than inflation for 75 percent of councils this year.

To compensate, council tax rose by an average of nearly 13 percent last year. But these increases are now beginning to reach the limit of political acceptability—hence the protests.

The public criticism has pushed the Government into the corner. They now concede the need for a review and recently published a consultation on local government finance. Meanwhile the Liberal Democrats, the third force in British politics after Labour and the Conservatives, have begun a campaign to abolish the property value-based council tax and replace it with a local income tax.

But why stop there?

Government, voters regularly argue, 'wastes' the taxes they collect. They believe politicians don't spend the money properly, allocating it to undeserving causes like asylum seekers and refugees or failing to provide services local people want, like policing, waste collection or better public transport.

The problem with this view is the electorate's lack of understanding of the competing demands politicians—at both national and local levels—face when deciding which goods and services to fund; paying for one means less for another.

But replacing the council tax with a local income tax won't address this problem. All it will do is swap one form of tax collection and may well maintain the disconnection many voters feel that they have any stake in the way their taxes are spent.

What we should be looking at is not only ways of making the tax system fairer, but also how to educate our electorate in the tough choices politicians must make.

Usually when British decision-makers want to explore new ways of addressing public services we tend to look across the Atlantic and the United States: railway privatisation, welfare reform and industrial relations are just some of the policy issues where we've examined and adopted American ideas.

But following these ideas hasn't always been to our benefit. Our trains are neither well-funded nor run on time, our most impoverished fall through the safety net and our unions have become increasingly emasculated.

The Brazilian Model

Perhaps we need to start looking elsewhere for ideas, including from the South. But this means needing to overcome our hang-ups and reject the assumption that we have nothing to learn from 'poorer' countries.

And yet if British politicians can get over their 'superiority complex' I think we should cast our eyes beyond the American horizon in favour of a horizon further south.

In fact it may be in Brazil where we can learn how to use our public money better. In particular we could examine the participatory budget process, an innovation which was first trialed in the southern city of Porto Alegre since the early 1990s.

For more than a decade, the Workers Party, the Partido dos Trabalhadores (PT), has had a system of participatory budgeting. The process brings people at the neighbourhood together with council experts and elected politicians. Instead of letting politicians decide how the council's annual budget will be allocated, they and council officers have to listen to the people at street-level meetings. By doing so they establish the priorities of each neighbourhood; and those next to each other may well have different priorities.

Through a series of such meetings council officers establish the priorities of local people, from the quality of pavements and lighting to basic amenities like waste disposal, water supply and school and medical provision.

The participatory budget process brings together the different priorities from each neighbourhood and fixes them in a spending plan for the following year. But wait: even at this level, there are representatives from outside the political class who are involved. The process requires representatives be elected to serve as delegates all the way through the participatory budget system, from the neighbourhood level to the city-wide budget committee.

In this way local people are able to counter the elected politicians, whose constituency may not only be voters, but business and the media as well. By including local people at all levels, from the neighbourhood to the budget-setting meetings, local people have a real say in how their taxes are allocated and spent.

Not only do local people get their say in how the council's money should be spent, the process has been shown to help educate them about what services the council can and can't provide. Also, there is evidence to suggest this learning experience has also helped local people become more civic-minded and politically engaged.

In the case of the Workers Party some of its activists have been drawn through the process; men and women who might never have thought of getting involved politically were it not for their involvement in the participatory budget process.

Since the system was pioneered in 1989, other Brazilian cities have taken the idea to heart. In 1996 the UN highlighted it as an example of best practice. It has since been adopted in varying forms elsewhere. The PT has even attempted to introduce the system at the state level, including in the Federal District under Cristovam Buarque and during Olivio Dutra's administration of Rio Grande do Sul.

Not for Everyone

The participatory budget has become such a distinctive feature of PT governance it has been included in Jorge Bittar's 1992 book, O Modo Petista de Governar (The PT Way of Governing), a 'how-to' manual for elected PT activists.

But to imagine all PT administrations have successfully implemented the participatory budget would be a mistake. At the same time Cristovam was applying the participatory budget in Brasília, the then PT governor of Espírito Santo, Vitor Buaiz, had given up on the project. And ironically, the presence and absence of the participatory budget in each didn't prevent the two from losing the gubernatorial elections in 1998.

And yet despite this surely including local people in the use of their taxes is good in itself. Not only does it make them feel they have a stake in their society, it also helps them learn about the choices which must be made in politics and might even find some enthusiastic enough to enter the arena—politics is beleaguered enough as it is and needs new blood.

In Britain—as elsewhere in the post-industrial world—political activity is increasingly becoming the preserve of fewer activists. And less participation also opens the political arena up to minority—including extremist—views. For example in the north of England several councils have substantial far-right representation. Much of their support comes from disillusioned voters who believe the established parties have failed them.

But if we open up the political process and make it easier for local people to become engaged in the way their local taxes are spent, then that could help reduce this threat.

The challenge though remains of whether British politicians have confidence in greater devolution. The PT in Brazil has shown a way; the question is whether we're prepared to swallow hard and shun American-based ideas in favour of a solution from the political South.

 

As a postgraduate student, Guy Burton carried out fieldwork on the Partido dos Trabalhadores. His research, on the PT administrations in Espírito Santo state and the Federal District (the equivalence to regional governance) between 1995 and 1998, was published in Gianpaolo Baiocchi's Radicals in Power (Zed Books, 2003). He is the prospective London Assembly candidate for the City and London East constituency in elections in June. His comments are his own opinion and do not reflect official Liberal Democrat position. He can be contacted at gjsburton@hotmail.com