Participatory Budgeting (Villa El Salvador, Peru)

Problems and Purpose

Villa El Salvador is a district within the city of Lima, Peru. In 1999 it began using participatory budgeting (PB) as a means to create an urban development plan, with the first PB talks commencing in 2000.

Three years later, the initiative became national when the Peruvian National Government made participatory budgeting mandatory as a response to the rampant corruption that occurred during the Fujimori Administration. In 2003, 22 of 24 regions took part in participatory budgeting and were included in the 2003 National Budget.[1]

History

Villa El Salvador, a district within Lima, has historically been known for its active citizenry who participate in its development plan. In the 1970s, Villa El Salvador had territorial-based councils that negotiated directly with the central government regarding development plans. Its participatory processes and self-management made it, in the eyes of the left-wing military governments which controlled Peru between 1968 and 1980, a model for the country. During the 1990s, the terrorist group The Shining Path created a base in Villa El Salvador and killed many local community leaders, effectively crippling the culture of vibrant citizen participation. The problem was augmented by the centralization policies of then-President Fujimori that took away most meaningful opportunities for citizen engagement in Villa El Salvador’s governance.

In 1999, the municipality of Villa El Salvador and three NGOs worked together to launch a participatory planning process in order to create a new urban development plan for the municipality.  In 2000, the year of Fujimori’s fall from power, the government chose to allocate 35% of its investment fund to participatory budgeting processes, following the successful model of participatory budgeting in Porto Alegre, Brazil from ten years before.

The success of Villa El Salvador’s participatory budgeting experiment led in part to the national government’s requirement in 2002 that all municipalities undergo some amount of participatory budgeting. However, some members of the national government were wary of or opposed to the idea, and the laws which regulated participatory budgeting nationally gave less power to the citizenry than Villa El Salvador had.

Originating Entities and Funding

The funding for the participatory budget can come from the municipality's own revenues and/or fund transfers from the Municipal Worker's Compensation Fund. If the latter occurs, those funds can only be allocated to expenses related to infrastructure and/or projects. The community can also contribute a percent of the value of the work, by financing projects, labor, tools, services, etc. Non-governmental organizations are also allowed to aid in the technical assistance of the PB process.

In Villa El Salvador, the allocation of economic resources to each of its eight districts area is based on the district’s population, the level of basic services provided, and tax contributions.

Participant Selection

To take part in the participatory budgeting process, a citizen must register in their municipality as a “Participating Agent.” Civil society members of the Regional and Local Coordinating Councils (discussed below) must represent a legally-registered civil society organization.

Public Interaction, Deliberation, and Decisions

According to national laws, the participatory budgeting process starts with the provision of information, followed by participant training and then deliberations in a series of workshops. After an agreement is adopted by the citizens, a technical committee assumes responsibility for the execution of the agreements. The technical committee’s activities are monitored by designated oversight committees.

Peruvian Law requires the existence of Regional and Local Coordinating Councils. These councils are allowed to further specify the national participatory budgeting rules, with the goal of achieving better representation of the local population (ie, they could create laws which take gender, indigenous or marginalized groups, or other factors into account). These councils are made of 40% members from civil society organizations (30% of whom must come from entrepreneurial organizations) and 60% state-representatives. This means that the local rules are determined, in effect, through citizen-government deliberation, with the government having an automatic majority in any vote.

Outcomes and Effects

In Villa El Salvador, the participatory elements of Villa El Salvador’s urban development planning process were apparently successful, as 83.7% of participating citizens voted in favor of the settled plan. However, no information is available on the effects of the participatory budgeting process specifically.

Nationally, information on the effects of PB is similarly scarce. The major study on Peru's participatory budgeting policy was completed in 2009, six years after the initiative began, and according to Michaela Hordijk, the author of the study, “scholars have correctly warned that a meaningful assessment of [participatory budgeting]’s impact can only be undertaken after circa 8-10 years.” Further research is needed.

However, some data is available on the participants in the PB processes. The leaders and active members of civil society organizations have been the majority of participants in PB events. Only 3% of participants represent women’s organizations, and there are fewer women participants in the regional councils when compared to the local level. Finally, roughly half of the participating agents at the local level are public servants, meaning that the government has a strong presence inside the citizen deliberative processes.

Analysis and Criticism

Although nationally-mandated PB has been a step towards giving more avenues for citizens to engage in government, there is still much room for improvement.  

The current PB regulations hinder the effectiveness of the PB process. The technical committees in charge of implementing the agreements adopted in the participatory process have the power to change or even reject those agreements, according to its criteria which align with the national accounting system’s standards. Furthermore, the oversight committees have no real power to ensure that the participatory agreements are carried out, as no legal sanctions for noncompliance exist. Thus, the success of the PB process depends on the attitudes of local civil servants towards PB and their willingness to cooperate with the local citizenry.

The representative process currently limits direct citizen participation. In the past, a citizen could qualify to register as a “participating agent” only if he/she represented a legally-registered civil society organization that had been in existence for at least three years. However, this requirement was repealed because it excluded many civil society organizations, and also disenfranchised the “unorganized” parts of society. However, the requirement of previous registration still exists, and presents a possible obstacle to participation.

In the Regional/Local Coordinating Councils, it is still a requirement for any civil society organization to be legally registered. This has blocked the participation of many un-registered organizations without the resources to register themselves.

The composition of participants, as noted above, heavily favors already-active members of civil society. This could be a result of a lack of funding for the municipality to advertise the opportunity widely, a lack of necessary capacity among the populace, general disinterest, and/or other factors.

The government’s power to influence the PB process potentially reduces the independence and power of citizens in the initiative.  Because half of participating agents are government officials, the participatory processes can become, in effect, deliberation between citizens and government rather than deliberation among citizens. Only 10% of researchers who have studied Peru’s PB initiative have found it to be a genuine participatory process.  

Also, the final deliberations in which budget allocation and agreements are reached occur at the representative level, with government representatives sometimes having the majority of the votes, diluting the citizen’s voice. Lastly, the representative model creates overlaps between the councils formed for the PB process and the local government, creating ambiguities in competencies.[4]

Secondary Sources

Mariana Felicio and Indu John-Abraham. “Peru: Towards a System of Social Accountability.” The World Bank - En Breve 39 (Feb. 2004): 1.  Available here.

Michaela Hordijk,. “Peru’s Participatory Budgeting: Configurations of Power, Opportunities for Change.” The Open Urban Studies Journal. 2 (2009): 49.  Available at http://www.benthamscience.com/open/tousj/openaccess2.htm.

External Links

Villa El Salvador Municipality Website <http://pivesweb.com.pe/Trans_PresupuestoParticipativo.htm>

[1] Mariana Felicio and Indu John-Abraham. “Peru: Towards a System of Social Accountability.” The World Bank - En Breve 39 (Feb. 2004).

[2]Michaela Hordijk,. “Peru’s Participatory Budgeting: Configurations of Power, Opportunities for Change.” The Open Urban Studies Journal. 2 (2009).

[3] Villa El Salvador Muncipality Website < http://pivesweb.com.pe/Trans_PresupuestoParticipativo.htm>

[4] Michaela Hordijk,. “Peru’s Participatory Budgeting: Configurations of Power, Opportunities for Change.” The Open Urban Studies Journal. 2 (2009).