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PB Within Municipal Budgets

Municipalities manage two types of public expenditures: (i) current expenditures, and (ii) investment expenditures. Only the latter are subject to PB. By law, each sub-national government has to make public the amount of investment expenditures that should be discussed and allocated through the PB mechanism. Thus, the amount of resources that are put in referendum is basically a political decision of the mayor and may end up being a very small portion of the municipal budget. According to the municipal representatives working on PB, the unwillingness of local governments to allocate most of the investment resources through PB is mainly due to its two limitations: (i) the fragmentation of resources for investment in several projects, and (ii) the implementation of low-impact projects. Municipality officials think that the participatory agents do not have the broader context of the local situation and mostly care about their neighborhoods. Also, we find that governments’ representatives think that the PB process prevents the implementation of high-impact projects that benefit large populations.

Generally, projects are presented at the PB meetings as ideas, which are later developed, including the elaboration of a profile and technical file during one or more years until they meet the requirements and are finally eligible to be prioritized. Even though the projects’ requirements for municipalities are quite basic, in many cases they are not fulfilled due to the lack of experience and capabilities of most participating agents.

Figure 4.1 presents the distribution of resources allocated through PB by sector for year 2009 for the municipalities included in the sample of this study. As shown, roads and transportation is the main recipient of resources prioritized by PB. The next most important sector is health and education. Water and sanitation is third in importance, commanding 12 percent of resources allocated.

PB-prioritized budget by investment sector—2009

Fig. 4.1 PB-prioritized budget by investment sector—2009

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