Budgeting instititutions in the state of Rio Grande do Sul, Brazil, bring participatory democracy to public finance. A chief impact of participatory institutions is to change the relative power of groups within society. In this case, with the Workers Party in state office, participatory decision-making strengthened lower-class groups interested in redistribution to the poor. Putting participatory budgeting (PB) in place required overcoming the difficulties of incorporating face-to-face decision-making on a large scale. It also sparked the political opposition of those who had benefited from more closed decision-making structures. Despite these obstacles, the PB has attracted hundreds of thousands of participants and had a significant impact. Institutionally, it opens avenues for participation to previously ignored sections of society and enhances government accountability. Politically, PB shows signs of shifting the balance of power in the party system, while fiscally it has promoted a redistributive development model while improving budgetary planning and efficiency. It is concluded that PB is an example of a lower-class political project that includes a participatory vision of democracy and a redistributive vision of development.
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IDS Working Paper No. 149, Brighton, UK: Institute of Development Studies, ISBN 1-85864-406-2, 28 pp.