Toward a more inclusive and effective participatory budget in Porto Alegre

Abstract

This research attempts to design a method for estimating the impact of the implementation of Participatory Budget (hereafter PB) on selected public finance variables. The idea is that people participating in the budget decision will be more willing to pay local taxes since (the argument goes) the citizens have more control over the allocation decision. The PB was implemented in municipalities in Brazil starting on the late 1980’s and had been growing steadily ever since. This characteristic allows the analysis to be carried out using a panel spanning data from the early 1990’s until 2004. The analysis is then applied to the case of Porto Alegre, Brazil.