Participatory budgeting in Peru is is mandated from a national level. It follows a 4-phase yearly cycle and has been used since 2004.
Problems and Purpose
A democratization process occurred in Peru at the start of the 21st century when Alberto Fujimori’s authoritarian regime was unsuccessful. Mcnulty (2013a) shares, “Fujimori had governed the country for ten years in a regime typified by the gradual concentration of power in the executive, extreme corruption, and the lack of transparency. After two national scandals came to light, involving high-level corruption and links to drug trafficking, Fujimori fled the country to live in exile in Japan” (p.1). These problems contributed to the creation of the participatory budgeting process.
The history of Peru at the start of the 21st century left a government in ruins in many ways. There was a pressing need for a renovation of government and this is where the participatory budget process was born. According to Mcnulty (2013a), a decentralization reform occurred “...that strengthened regional, provincial, and district levels of government” (p.2). The process was intended to accomplish a change of nature in the local government and “...to mandate democracy and development from above” (p.1).
Background History and Context
Leading up to this initiative the government was in ruins because of the authoritarian regime of Alberto Fujimori. He was not transparent in leadership, and fled for Japan while leaving the country corrupt. Two of his national scandals were the events that caused of his fleeing Peru, and ultimately lead the country to partake in a participatory budgeting process. Congress knew this initiative to be “...part of a larger decentralization reform,” and saw that it, “...strengthened regional, provincial, and district levels of government” (p.2). The participatory budgeting process had never before been tried in Peru because former presidents never worked to dismantle the decentralization efforts (Mcnulty, 2013b). Worth mentioning is the similar participatory budgeting process in Ilo, Peru.
Organizing, Supporting, and Funding Entities
The originating entity was Congress and they initiated the process to participation (Mcnulty, 2013a). Funding of the process is unclear, but it would be helpful to understand whether regional, local, or strictly national government fund the participatory budgeting process.
Participant Recruitment and Selection
There is a four step participatory budget phases method for the regional, district, and provincial level. The recruitment is participatory at its origin, making it a self-selection method of participation recruitment. According to Mcnulty (2013a), there is “... a call for participation, registration of participants, a training period for participants - called ‘participatory agents’ or PAs - the formation of a technical team, and several meetings during which participating agents prioritize and vote on investment projects” (p. 2). There is a clear imbalance of genders in Peru’s participatory budgeting process. Female participatory agent rates are lower than men, never representing more than 32%. In terms of other minority communities, Mcnulty claims, “if we use female representation as a proxy indicator for additional disadvantaged communities, we can assume that these populations are under-represented as well” (p.7).
Methods and Tools Used
The method used is participatory budgeting. The process involves four steps:
4. Formalization (Mcnulty, 2013a).
It is unclear as to what tools were used in the process.
What Went On: Process, Interaction, and Participation
Mcnulty shares the phases according to Law 292981:
- Preparation, or identifying, registering, and training participating agents.
- 'Concertation’: During this phase, the participating agents meet to discuss the region’s development plan and prioritize the “themes” of projects that should be funded in the new budget. This discussion should be based on the development plan. The technical team then evaluates each proposed project and, based on the agreed upon priorities, recommends the projects that should be funded.
- Coordination among the different levels of government, which consists of meetings between the regional president and the local mayors to make sure that spending is coordinated, sustainable, and has regional impact.
- Formalization of investment projects. This takes place during a regional meeting where all participating agents are given a vote in the final project list. This final list is sent to two regional governmental bodies, the Regional Coordination Council and the Regional Council, for approval” (Mcnulty, 2013a, p. 1).
- “Once a list of projects is approved in the final participatory budget meeting, the subnational executive (the regional president or local mayor) sends the list of projects to his or her Regional (or Local) Council, similar to a legislative body, to approve. The final list is then sent to the Ministry of Economy and Finance (MEF), which evaluates technical viability” (Mcnulty, 2013a, p.3).
- “The MEF sends a final budget to Congress to approve as part of the national budget process. While civil society participation is an important part of the process, it is only one part of a long and complicated budget process that involves elected regional authorities and central government officials...” (Mcnulty, 2013a, p.4). This ensures that citizens are able to monitor the projects and make sure that the projects are formed. Participation looks like “...representatives from civil society organizations, members of the Regional or Local Coordination Council, and government officials” (p. 3). The civil society organizations are to register in advance if they meet criteria. Each level of government is required by national law to determine the process of registration and put it in code (Mcnulty, 2013a).
Influence, Outcomes, and Effects
Peru’s participatory budget process has remained mostly the same since it was a thought around 2000 outside of the budget overhaul in 2007 (Mcnulty, 2013a). The data that exist suggest that PAs are prioritizing “social” projects that are “pro-poor” in nature” (p.7). Mcnulty claims, “...the process was intended to accomplish a change of nature in the local government and “...to mandate democracy and development from above” (p.1). In relation to this purpose, in 2001, the Latin American Public Opinion Poll found that 29.30% of respondents said “Yes” either “A Lot” or “Somewhat” to the question, “Do you trust the local government?” Whereas in 2010, only 28.20% said the same. In terms of willingness to be involved in the community, the Latin American Public Opinion Poll found that in 1998, 20.63% of respondents answered “Yes” when asked, “Have you attended a town meeting, city council meeting or other meeting the past 12 months?” In 2012, however, only 11.95% responded “Yes.” Instability was increased instead of decreased, even though this participatory budget process is probably not the only cause of conflict around the country (Mcnulty, 2013a).
Because of its nature, it is difficult to do any in-depth measuring of the influence, outcomes, and effects of Peru’s participatory budgeting process because the results are not at all the same when comparing one place to the next. The number of PAs ranged from 2592 to 3088, and the percentage of PAs representing CSOs decreased overtime from 63% to 54% (Mcnulty, 2013a). As surprisingly successful as it may be, there are many challenges and problems with participatory budgeting in Peru. The projects that are pro-poor and group-diversifying are not always accomplished. When this is the case, it affects participatory budgeting impacts. Additionally, problems like national conflict and perception of local government are not improving. Many would argue that ten years is too short of time for any real impact to be made (Mcnulty, 2013a).
Analysis and Lessons Learned
Finally, it must be noted that the results are not direct; they are a bit scattered. There is no way to tell for sure if the participatory budgeting process is helpful or not. There have been benefits, but there have just as well been many challenges. These challenges could cause major problems in the long run, and meanwhile the citizens are not gaining a stronger perception of their local government the way many may have hoped. The nature of the participatory budget design, the restriction of participation from certain groups, as well as the lack of quotas instituted, have all played a role in the limited results. Mcnulty (2013a) claims, “...The national government is simply not interested in promoting the PB [participatory budget]” (p. 11). In order for shortcomings to be fixed in the future, government interest will need to improve. And last but not least, the status quo is still a major factor for the government and they are therefore seemingly not responding to the needs of their citizens to the best of their ability (Mcnulty, 2013a). Mcnulty’s research shares about participation satisfaction, “When asked to ‘grade the process,’ 50.5 percent of the respondents reported that the process was ‘regular’ (normal), 35.1 percent ‘good,’ and 5.4 percent ‘excellent’ (MCLCP 2007, as cited in Mcnulty, 2013a). It did not work well in terms of guaranteeing a completely participatory meeting. Participation was restricted and organizations were not able to meet necessary requirements. It also did not work in terms of representing a diverse participating agent base. Quotas could be a wonderful addition to ensure diversity (Mcnulty, 2013a). There were no formal evaluations conducted concerning the participants’ experience and/or the entire process.
Goodin (2008) proposes two types of governance: High Modernism vs. Deliberative Governance. High Modernism emphasizes command and control, is expert-led, top-down, and centralized, does not seek public input, and does not adapt policies to local contexts and evidence from evaluations. On the other hand, Deliberative Governance emphasizes negotiations and collaborations, is bottom-up and decentralized, adapts goals and plans to local contexts and evidence from evaluations, and is adaptive (Goodin, 2008). Peru went from a high modernism structure of governance to a deliberative governance with the shifting of powers from Fujimori to the creation of the participatory budgeting process.
Goodin, R. E., Rein, M., & Moran, M. (2008). The public and its policies. In R. E. Goodin, M. Moran, & M. Rein (Eds.), The Oxford handbook of public policy (pp. 3-36). Oxford: Oxford University Press.
Mesa de Concertación para la Lucha Contra la Pobreza (MCLCP). 2011. Presupuesto participativo 2008-2009. Lima, Peru.
—— 2007. Informe nacional de monitoreo: Resultados del proceso participativo. Lima, Peru.
Mcnulty, S. (2013a). Improved Governance? Exploring the Results of Perus Participatory Budgeting Process. SSRN Electronic Journal. doi:10.2139/ssrn.2309427
McNulty, S. (2013b). Participatory Democracy? Exploring Peru’s Efforts to Engage Civil Society in Local Governance. Latin American Politics and Society, 55 (3), 69-92. doi:10.1111/j.1548-2456.2013.00203.x
For more on the Peruvian national participatory budget process, see https://localdemocracy.net/countries/south-america/peru/
The first submission of this case entry was written by Maggie Benton, a Master of Public Service candidate at the University of Arkansas Clinton School of Public Service. The views expressed in this case study are those of the authors, editors, or cited sources, and are not necessarily those of the University of Arkansas Clinton School of Public Service.