Brazil Public participation initiative on revenue and spending

Branch of Government:
Executive

Open Budget Survey / Public Participation in the Budget Process Score (Out of 100): 2015: 71 – 2017: 35 – 2019: 17

Stage in Fiscal Policy Cycle

Formulation

Summary

The public policy councils in Brazil provide a comprehensive form of institutionalized civil society participation in designing, implementing, and monitoring public policies. The councils are permanent collegiate institutions, formally created by the Public Administration, to provide an avenue of dialogue between civil society and government to promote public participation in public policy management and decision-making.

They are composed of both governmental and non-governmental representatives, related to a specific area and they are designed to link citizens and policy experts to specific line ministries (although as one observer notes, it is considered somewhat controversial if they indeed perform this function).[ref] While Council responsibilities are not homogenous and vary between the different policy areas, Councils generally have the responsibility of suggesting new policies (budget formulation) as well as monitoring government implementation.

Alongside participatory budgeting at the sub-national level, which was pioneered in Brazil, public policy councils have been instrumental in creating momentum in the country for public participation.[ref] The councils’ importance lies partly in their scale: they are established for a variety of public policy areas, such as the environment, health, or education, and they are organized at all levels of government, local to federal.[ref] The councils are instrumental in fostering social participation and monitoring, making government more accountable, and deepening democracy.[ref] They also aim to provide more universal access to social services.[ref]

The public policy councils in Brazil engage a number of public participation principles in practice, most prominently the principles of respect for self-expression, and sustainability. These two principles are well illustrated by the practice, while others, such as timeliness, complementarity or reciprocity, are not fully realized as of yet.

Basic Facts

The practice takes place during the budget formulation stage and is led by the executive branch at all three levels of government. While there are records of some cases of councils in the legislative and judiciary branch, those are uncommon.[ref]

Why

Brazil’s Public Policy Councils are public spaces of plural composition and for the most part, although not uniformly, parity between state and civil society, established at all three levels of government: local, state and federal. They are – for the most part, but again, not uniformly – established by law by the executive and are ruled by an internal statute.[ref] They can have several functions: deliberative, legislative, advisory and/or supervisory.[ref]

Councils have an important, albeit somewhat generic oversight function: they monitor the proper allocation of resources and public service delivery, thereby furthering government accountability broadly.[ref] That being said, as one observer notes, only a small number of councils show deeper oversight prerogatives.[ref] Some councils also approve new programs and the annual budgets of corresponding agencies.[ref] Many of the councils are thus involved at various points in the policy process: formulation as well as review/audit.[ref]

Authorizing Environment

The Decree n. 8243, of 23 May 2014, represents an initiative trying to put together all the current form of public participation in federal government. Although this act remains in vogue, it has been highly criticized by some lawmakers and media sectors, and a parliamentary proposal to revoke its effects is currently under scrutiny in Senate.

Who and How

In some councils, the members have the task of approving the proposed budget within their policy area. As such, these councils can alter or reject the budget as proposed by the executive branch at their level (mayors, governors, president). Veto is unlikely, however, given that typically 50% of council members are executive appointees and decisions are made by simple majority. Additional reasons for the lack of veto are the fact that actors share a common interest in the policy, which would be compromised by a veto, and there is generally a lack of time and knowledge to perform a deep analysis of the proposals.[ref] The government’s agenda-setting powers also limit the use of veto.[ref] Council members in some cases also approve the previous year’s fiscal report. Without this, the local government may not be eligible for federal funds transfers (in the cases where council actions are conditions for transfers to take place).

The councils’ work is often – but not always –  complemented by thematic conferences, also taking place at all three levels of government (municipal, state and federal). Conferences are regular forums for discussion, formulation and evaluation of specific issues in the public interest, with the participation of representatives of government and civil society so that they can contemplate state, district, municipal and regional stages and propose guidelines and actions on the specific themes discussed.  Conferences take place over one or two days every one to four years and are attended by citizens and community leaders.[ref] General policy proposals are discussed and voted on within the conference with the objective of providing input to the government with respect to policy priorities.[ref] Councils and conferences are interconnected by the fact that council members are, at times, elected during the annual or biannual conference meetings, although this is not a general rule. The councils often prepare the agendas for the conference meetings.

While in 2009, there were 32, 413 councils, by 2011 this number was 50,557, including councils in the three federative levels and different policy areas. The majority of councils have been implemented in municipalities that have less than 15,000 residents, since most Brazilian cities have less than 20,000 inhabitants (68,72% according to the Brazilian Institute of Geographics and IBGE in 2015). [ref]

That being said, councils are more likely to be found in urban centers than in small municipalities, depending on policy area. Evidence suggests that medium and large municipalities are also more and more willing to adopt councils voluntarily. [ref] In fact, as municipalities grow in size, they adopt more councils, particularly as they are in some cases required to establish councils by the federal government as a pre-condition for the transfer of federal funds for certain programs.[ref]

Positions on the council are filled either by election, or appointment by a specific authority, and some are directly nominated in the created statute.[ref] The number of seats for each Council is determined either by the founding legislation or the internal rules of the council. Council membership is generally based on parity with 50% of the Council seats going to government officials and 50% going to CSOs, including social movements, community-based organizations and unions.[ref] Limited representation from private companies and policy experts is also possible.

Some exceptions exist to the principle of parity, which – although not a rule – is generally diffused in the council system, with the exception of certain policy areas such as for councils in the areas of health and food security, where health boards are composed of 25% government representatives, 25% of CSO representatives and 50% of users of Unified Health System (SUS) health services.[ref]

CSO members are generally selected through forums where CSOs compete for seats with each other, while the government nominates its members and service providers are nominated through their associations or by government authorities. Labor union representatives are generally elected through internal elections for guaranteed seats. Members do not receive compensation for their activities. Rather, they are expected to have an interest in and a specific knowledge of the particular subject matter covered by a council.

Councils typically hold meetings biweekly or monthly. The meetings are an opportunity to present information, ask questions from government officials and discuss issues with government officials.  Meetings are, for the most part, but with exceptions, open to the public and they are announced typically five days in advance, but variations do exist to these rules.  Many councils have multiple subcommittees for various policy areas. The subcommittees of the councils provide a space for more detailed research activities and policy discussions and they also part-draft proposals and engage in oversight activities. They report back to the main council about their work. [ref]

Results and Impact

Statistical data from 2012 shows that municipal councils in the areas of health, social care, and rights of children and adolescents exist and are fully operational in 99% of municipalities. The councils for the elderly, for culture, for the environment are present in over 50% of municipalities. Councils for the rights of people with disabilities, women’s rights, and food security are increasing in numbers and are now present in around 30% of municipalities. [ref]

Data from Brazil’s Applied Economic Institute (IPEA) from 2010 shows that among the national level council-members, an overwhelming majority serve on another council or had previously served on a council. 70% participate or had participated in another council, and nearly 90% percent of the councilors who responded assert that they have extensive contact with their bases and their members (if they are CSOs) (2013 data from IPEA). The councils are thus linked through personal continuity.

IPEA administered a survey to national-level councilors on three questions in 2012:

1) Capacity to influence the National Congress;

2) Capacity to influence the ministry in which the council is housed (e.g. National health council in the Health Ministry); and

3) Capacity to influence other ministries.

Results from the survey showed that 75% of councilors believe they have a “significant” or “very significant” impact on the relevant agency.[ref] The area where councilors believe they have the least amount of influence is the National Congress. Councilors thus believe they are an integral part of the national decision-making environment.

The process has resulted in more consensus-based decision-making and more citizen control over the allocation of public resources. It also resulted in a greater continuity of public policy and has made the budget process more accessible to the public.[ref]

Lessons Learned

Challenges to the process have included:

  • CSO members of the councils are volunteers, while the government members are professionals, which can lead to a knowledge and expertise imbalance between the different members and can lead to capture of the council on occasion.[ref] Lack of knowledge and lack of training for council members hinder the process.[ref]
  • Emphasis has been stronger on the budget formulation phase than on implementation and audit/review, where attention has often been completely lacking. [ref]
  • Some councils exist only to guarantee government fund transfers but are otherwise not fully functional.[ref]
  • Capture of councils by CSOs that are better organized or have a more established constituent base.[ref]
  • There is no impact assessment for councils.[ref]

Generally, there is a lack of public information available on the operations of the councils, although some of them are known for broad publicity of every single act of their members.[ref]

Principles of Public Participation in Fiscal Policy

The public policy councils in Brazil engage a number of public participation principles in practice. Most prominently illustrated is the principle of the respect for self-expression, as councils work at all levels of government, and thus enable communities, even at the local level, to express their interests in their own way.

They are also highly institutionalized forms of public participation, representing in practice the principle of sustainability. These two principles are very well illustrated by the practice, while others, such as timeliness, complementarity or reciprocity, are not fully realized and could be better engaged.

The mechanism engages the following principles:

  • Complementarity: This mechanism illustrates the principle of complementarity in action due to its multi-tiered nature, operating at all three levels of government, and due to the councils interlocking nature, both with each other but also with the larger policy-making environment. The various tiers feed information and views upwards, which also shows complementarity. This principle could be much better realized if the councils work.
  • Transparency: Relevant information is provided to and from the council to participate in the decision-making process.
  • Timeliness: This principle could be much better realized if sufficient time was allowed for the public at all times to provide input into the budget process.
  • Respect for self-expression: Since the councils work at the level of local community as well, they enable communities to express their interests in their own way.
  • Proportionality: The mechanism is proportional in nature since it tackles issues at the three levels of governments, is organized by sector or policy domain, and is tailored to the specific needs of communities differing in size.
  • Sustainability: Engagement is ongoing, regular and institutionalized. Councils are highly institutionalized establishments, and thus represent a permanent instrument of public management.
  • Reciprocity: The entities taking part are generally, but not always, open about their mission and the interests they represent. This principle could be better served if all entities were open about their interests.

Country Context

Type of Government

Brazil is a country of over 200 million people that transitioned to democracy in the 1980s, following a military dictatorship from 1964 and 1985. The transition’s major turning points were the indirect election of a civil president in 1985 and the adoption of the new Federal Constitution in 1988.

Brazil is a federal republic, consisting of 26 states and the Federal District, and 5,570 municipalities.  Following the 1988 Federal Constitution, states and municipalities became administratively and politically autonomous.[ref] Brazil has a democratic presidential system, where the President is the head of both the state and the government, elected by popular vote with term limits, supported by the Cabinet of Ministers.

The government consists of three independent branches: the legislature, the executive, and the judiciary.  The Federal Constitution establishes internal and external controls: internal in the form of internal audits or controllerships, such as the Union General Controllership, while external controls at the federal level are exercised by independent agencies with their own resources, such as the Federal Court of Accounts (Tribunal de Contas da União or TCU), Brazil’s Supreme Audit Institution.

Civic Space

Following the democratic transition, during the 1990s and the 2000s, Brazil expanded the number of participatory venues, allowing citizens a number of opportunities to participate directly in public policy-making. Specifically regarding participation in budgetary processing, Brazil has implemented participatory budgeting at the subnational, mainly municipal level, public policy councils at all levels, public policy conferences, and the pluriannual budget planning.

There are a number of laws and institutions that have opened up the budget process to the public, such as the Fiscal Responsibility Law, the Access to Information Law, the 2004 Transparency Portal, and the Federal Ombudsman, among others.[ref]

The number of NGOs have greatly expanded in the 1990s. While in the 1970s, the number of NGOs was around 11,000, between 1991 and 2000, almost 140,000 foundations and NGOs were recorded.  According to the Brazilian Institute of Geography and Statistics (IGBE) database, in 2010, there were 290 692 NGOs on record, and their number is expected to rise to more than 300 000 in 2016, according to the IPEA database.[ref] Many of these later became service providers.[ref] After 2003, councils and forums for national public policy started encompassing a number of key areas, such as social and economic development, public transparency, anti-corruption, and non-discrimination, among others.

Roundtables with labor unions were also created. Starting in the 2000s, both the federal and local governments have established strong partnership relations with CSOs. In 2014, a new law established the regime of voluntary partnerships between government and CSOs, based on mutual cooperation.[ref] This law deeply modifies the relationship between the public sector and CSOs, but the effects are yet to be assessed?

Open Budget Survey

Brazil scored 77 out of 100 on the 2015 Open Budget Survey, with a score of 71 for public participation. According to the Open Budget Survey, Brazil provides adequate opportunities to the public to engage in the budget process.  The score for Public Participation in the budget process is 71 out of 100, where as the score for budget oversight by legislature and supreme audit institution are 80 and 75 respectively. [ref]

This is an improvement from Brazil’s previous overall score of 71 on the 2012 Open Budget Survey. Freedom House’s 2016 Freedom in the World Report categorized Brazil as “free.”