Points for Participation

The Obama campaign’s direct and wide-scale efforts to mobilize the public in 2008 resulted in voter turnout rates unheard of since the 1960s. However, a report released by the Center for the Study of the American Electorate at American University predicts that there will be a drop in voter turnout for the 2012 elections due to political disenchantment among young voters. As the report summarizes, “Obama the president did not fulfill the hope invested in Obama the candidate.” Researchers at MTV also gauged this enthusiasm gap, finding that, despite electing Obama in 2008, many young people feel that they “lost anyway.” As a result, the popular television station plans to discontinue their long-time catchphrase “Choose or Lose.” The major source of this political frustration, reports MTV president Stephen K. Friedman, is the “wall of the economy,” which did much to dampen political optimism, leading 72 percent of the youth polled by MTV to report that they do not trust the government to take care of their well-being.

These sentiments illuminate the very real issue of America’s struggling economy, including concern over growing socioeconomic inequality in the United States, an issue that was highlighted by Occupy Wall Street, a movement led largely by young adults. They also reveal beliefs that the actions of the US government are growing ever more distant from the actual desires of the people. Take, for example, the public outcry against the passage of the Troubled Asset Relief Program (TARP) in 2008. An attempt to solve the financial crisis by putting $414 billion of taxpayer money into failing banks, the very hands of which caused the recession to begin with, TARP not only revealed the extent to which Americans were troubled by the government’s use of their money for corporate welfare, but also how little the American public can influence how the government uses public finances.

Concern over these issues of economic inequality and political inefficacy necessitates a search for solutions: If the system is broken, then it must be fixed. The question, of course, is how. It might be helpful to first look toward public policy elsewhere that has succeeded in reducing inequality and involving citizens more in governmental deliberations. In Belo Horizonte, Brazil, a municipal policy called participatory budgeting (PB), which has democratized the process of city budgeting, has succeeded in accomplishing just that.

Beginning in the late 1980s, several large Brazilian cities instituted the revolutionary public program. Through PB, a portion of the municipal budget reserved for new capital expenditures, such as new physical construction, is left to the deliberation of the general public. In the city of Belo Horizonte, specifically, city officials arrange public forums once every two years to establish the city’s municipal planning priorities, and citizens are invited to submit regional project ideas and proposals that fall within these previously established priorities. For example, if water and sanitation is an established goal, residents may propose to expand the municipal water system in their community. The submitted proposals are then deliberated upon through a democratic process, and the winning projects begin construction that year. By allowing residents to establish their own planning goals and to select their own public projects, PB has effectively expanded democracy into the realm of municipal finances.

PB was created in response to problems similar to those that are currently being faced in the United States – namely economic and political inequality – with the hopes of redistributing civic wealth and creating a more democratic system. From colonial beginnings, to various military dictatorships, to a frail democracy finally achieved in the 1980s, fiscally conservative elites, who funneled the majority of municipal resources toward wealthier areas, dominated Brazil for nearly 500 years. Poor neighborhoods could only gain access to city services through clientelism – a system in which city services and infrastructure improvements are exchanged for votes in indigent areas, effectively turning public works into political favors rather than rights. Brazil’s problems with inequality were further exacerbated in the 1940s when the country began to undergo a period of rapid urbanization in which city dwellers grew from 30 percent to 70 percent of the population in just 50 years. The urban poor’s lack of political accommodation prompted the formation of illegal settlements, commonly referred to as slums, vilas, or favelas, in virtually all major cities, which largely lacked access to basic amenities as a result of their rapid and informal development. During this period, Brazil’s elite-driven municipal governments only intensified infrastructural deficiencies in vilas by continuing to direct municipal funds toward wealthy districts as opposed to those in need.

PB was therefore designed with two goals in mind – to reverse the historical flow of capital and resources to the wealthy and to end Brazil’s history of elite-driven, clientelistic government. Overall, evidence suggests that PB may have been very successful in these endeavors. A study conducted by Carew Boulding and Brian Wampler, professors at the University of Colorado at Boulder and Boise State University, respectively, comparing Brazilian cities that implement PB to those that have not has shown that the program is correlated with small – but statistically significant – decreases in extreme poverty and increases in municipal spending on health and education. PB also has succeeded in reversing capital flows from the wealthy to the poor; the municipality reports that poor residents receive $5 in investments for every $1 that they contribute to the program in taxes. Furthermore, the program has served to strengthen the public’s faith in government. Participatory budgeting is the highest rated municipal program in Belo Horizonte, and the World Bank reports that the program leads to increased municipal tax compliance because citizens better understand how their tax money is spent and have greater control over its use.

So should cities in the United States begin to implement PB as a means of engaging the public and opening the process up to the community? Maybe, but that is not really the point. Instead of copying and pasting policy, it is much more productive to examine what aspects of PB make it so successful. There are important lessons to be learned from PB that are rarely seen in American legislation and might help the United States achieve the equality it supposedly values. Participatory budgeting’s method consists in viewing the public as a relevant actor in the governmental decision-making process.

America has always sought to achieve equality through a democratic state system reliant upon providing equal opportunities to all, but this model has not succeeded in creating a truly equitable society. The United States has long subscribed to the ideals of a meritocratic democracy, according to which the hardest worker with the strongest resolve would ultimately achieve success. This understanding of meritocracy, which operated and was conceived in direct opposition to the socially immobile British aristocracy, was developed behind the notion that all men were created equal. But Luigi Zingales, professor at the University of Chicago Booth School of Business, notes that “unlike the French Revolution, which emphasized the principle of equality, [the American Revolution] championed the freedom to pursue happiness. In other words, America was founded on equality of opportunities, not of outcomes.” And indeed, the outcomes have not been promising.

While equal opportunities should logically lead to an equal chance at success, the facts prove otherwise: Social mobility has been declining in America. The Economic Policy Institute, a Washington-based think tank, claims that 40 years ago in the United States eight percent of those born into the second-lowest income bracket remained in the same socio-economic position throughout their lives. As the increase from eight percent to 32 percent in the 1980s and 36 percent in the 1990s indicates, more of the poor are simply remaining poor. Furthermore, while the real household income of the lowest fifth of American earners grew by 6.4 percent from 1979 to 2000, the top-fifth’s household income saw a 70 percent increase and the top 1 percent enjoyed a 184 percent increase in household income over this 21 year period. With an ever-growing chasm between rich and poor Americans, it is clear that equal opportunities are not translating into economic equality.

Here is where we might learn from PB, which has opted to value equality in outcomes rather than in opportunities. PB is designed in a way that does not seek to dole out services equally, but rather, acknowledges that the poor require more than the wealthy in order to succeed and not the same amount. The central ideology behind this measure is that, even while providing theoretically equal opportunities, it takes those beginning at a disadvantage longer to complete the race to success.

In Belo Horizonte, 50 percent of the municipal budget reserved for PB is evenly split between the nine administrative regions, and the other 50 percent is allocated through a weighted process inversely proportional to the average income and the level of development of the region. In addition, the votes of more impoverished regions are weighted more heavily during the deliberation process. This mechanism of allocating more funds and weighting votes to regions experiencing the compounded disadvantages of poverty and underdevelopment serves to level a historically unequal playing field and ensure that city services are being delivered to marginalized populations. As already noted, the policy has resulted in significant improvements in the daily living conditions of the poor and has succeeded in reducing extreme poverty and income inequality. Given America’s failure in achieving equality by promoting equal opportunities, perhaps it is time to take a cue from Brazil and start championing equal outcomes.

Another lesson to be learned from PB is that the public often knows better than the politician. American democracy is highly representative – there are only rare instances in which direct democracy results in the formation of legislation or governmental action. It is commonly held that the public is uninformed and easily swayed. PB has produced evidence, however, that there are great advantages to including public insight in governmental deliberations.

PB is built on the premise that asking the public what they need is more efficient than the government deciding for them – a novel idea for many governments. When PB was first implemented, the public’s major demand was for paved roads, a request that was viewed as frivolous by government and community leaders and which prompted one community activist to quip that, “by the end of the twentieth century, we’ll have a totally paved stupid city.” But by connecting neighborhoods to the city’s water and sewer systems and allowing the entrance of city services, such as public transportation, trash collection, police cars, and ambulances, into previously excluded communities, the implementation of paved roads did much to improve living conditions. Rebecca Abers, political science professor at the University of Brasília, noted that mobilization around issues of pavement and sanitation were “not surprising” because “the effect in many cases was to transform dangerous, dark, and difficult-to-reach areas into integrated parts of the city,” highlighting the public’s acute understanding of their own needs, even when the solutions are not as obvious to community leaders or elected officials.

In the United States, the detriments of excluding public insight from governmental deliberations can be seen in TARP’s utter failure – even the Congressional Oversight Panel admitted that they “[saw] no evidence that the US Treasury has used TARP funds to support the housing market by avoiding preventable foreclosures” and that “hundreds of billions of dollars have been injected into the marketplace with no demonstrable effects on lending.” Essentially, the banks failed to effectively use the bailout money to help the average American, something that most citizens – especially those facing the threat of foreclosure – likely could have predicted, even without an extensive background in economics. Putting to public vote whether banks such as Citigroup should have gotten a $414 billion bailout might have yielded a different, and better, outcome.

Some American cities are actually starting to experiment with participatory budgeting. In a trail that began in October 2011, four New York city council districts, including parts of Brooklyn, the Bronx, Manhattan, and Queens, completed their first attempts at using PB to allocate municipal funding for capital expenditures, with votes ending April 1 of this year. The city council members in these four areas each put one million dollars of their discretionary funds up for public input and debate. The council members hoped that PB would encourage community involvement and engagement and increase governmental transparency. In these endeavors, the PB NYC experiment has thus far appeared to be a large success – 33 percent of participants had never previously engaged in community problem solving, and almost 99 percent of residents who participated in the process gave the program a positive rating. While this example of PB takes to heart the idea of listening to constituents and putting their ideas into action, it is important to note that the American version of PB has left out the program’s redistributive structure. In failing to do so, the program has not effectively addressed the lesson of valuing outcomes over opportunities. At a conference held at Pratt University on March 30 and 31, Gianpaolo Baiocchi, professor at Brown University and scholar of participatory budgeting, warned that the program has the potential to be co-opted by the wealthy and may actually serve to reinforce inequality in the United States.

And this lesson might just be the kicker: If America is serious about solving its capital problems, then government must start talking to the people. Regardless of who wins the upcoming presidential election, 2008 proved that real change is not going to come from the ballot box, but rather by mobilizing the public outside of election day. Instead of “Choose or Lose,” MTV’s slogan for this election season is now “Power of 12,” a nod not only to the political power of America’s youth in the upcoming election, but also a concession to the fact that voting is “just one step” in the larger process of political action. For equality to actually be achieved, there needs to be a more fundamental shift in our political and economic system – one that seeks to see equality manifested in society and that matches public policy with public opinion.