Between 2008 and 2023, the share of Belo Horizonte’s municipal budget allocated to projects chosen by residents fell from 4.2% to 0.2%, draining the mechanism of all substance. The Brazilian city has just adopted a legal floor of 1% of net current revenue, enforceable against each successive administration. For the three thousand cities worldwide that have experimented with participatory budgeting, this reform poses a concrete problem: a citizen decision has real impact only if the administration commits the corresponding funds.
The essentials
- Citizen participation survives political transitions only if the vote produces a budget obligation, not an allocation that the executive can reduce at will.
- In Belo Horizonte, participatory budgeting fell from 4.2% of the municipal budget in 2008 to 0.2% in 2023; the Municipal Chamber established a legal floor of 1% of net current revenue (Câmara Municipal de Belo Horizonte, Nota Técnica nº 55/2025).
- The central mechanism is the separation between deliberation and financing: without a mandatory floor, citizen decision remains subject to the incumbent mayor’s discretion.
- In January 2025, 280 voted projects remained undelivered, a legacy of a cycle where commitments accumulated without assured funding.
- The open question is whether a guaranteed fraction is enough to prevent a new stock of unfunded projects, or whether the floor must be accompanied by strengthened administrative execution capacity.
Twenty years of decline
Porto Alegre invented participatory budgeting in 1989. The idea was clear: give residents the right to vote on a fraction of the municipal budget, then execute what the vote produces. The model spread rapidly. Belo Horizonte, Brazil’s third-largest city with three million inhabitants, adopted it in 1993. At its peak in 2008, the mechanism represented 4.2% of the municipal budget, a real envelope on which residents exercised verifiable choice.
What happened next is documented with precision in the Nota Técnica nº 55/2025 of the Municipal Chamber. The share declined overall between 2008 and 2023, with fluctuations by year, before the municipal organic law imposed a minimum level. In 2023, it reached 0.2%. The vote still existed. Neighborhood meetings still took place. Projects were still selected. But available resources were insufficient relative to the backlog of projects to be executed.
The case of Belo Horizonte illustrates a structural problem that participatory budgeting advocates long underestimated. Deliberation and financing are two distinct acts. The first can be preserved without the second: it is enough to maintain assemblies, publish results, maintain the appearance of participation. What residents decide then commits the administration only within the limits of what the executive accepts allocating that year, until a legal obligation changes this logic.
The stock of undelivered projects, a symptom of broken contract
The breach of trust resulting from a stock of undelivered projects acts cumulatively. Each voting cycle that opens while previous commitments remain pending weakens the device’s legitimacy among the most active residents—that is, those whose regular participation conditions the vitality of the assemblies. These are the ones who transmit information in neighborhoods and mobilize new participants. When their repeated experience is one of voting without follow-through, their withdrawal triggers a contraction in participation far beyond the circle of those directly affected by an undelivered project.
The drop in credits produced a mechanical effect: voted projects could no longer find financing for execution. In early 2017, the Prefeitura reported approximately 450 participatory budget projects awaiting execution, stalled, or not yet started. This figure says something precise about the nature of the problem: residents had voted, the administration had recorded projects from previous rounds, but available resources no longer allowed them to be executed.
A stock of undelivered projects is more than administrative delay. It is a visible breach of contract. Each resident who voted for a project awaiting execution for three, five, or seven years has concrete proof that their decision did not count. Confidence in the mechanism erodes proportionally. Participation rates in subsequent assemblies follow the same curve as credits.
In January 2025, 280 projects remained to be completed according to the same technical note. The figure has declined compared to 2016, but remains substantial. These 280 projects are the visible liability of years when voting and budget operated on two disconnected timelines.
This gap between deliberation and execution appears in other contexts, notably that of local coordination of social services: when decisions are made at one level and resources at another, implementation becomes uncertain. This problem is structural to any institutional innovation that separates decision from financing.
The legal floor as an architectural response
The reform adopted by Belo Horizonte’s Municipal Chamber responds to this problem through an architectural change. Participatory budgeting is no longer an allocation that the executive can adjust each year according to its priorities. It becomes an obligation inscribed in municipal law: at least 1% of net current revenue must be allocated to projects chosen by residents, regardless of which mayor is in office.
A floor of 1% remains modest in absolute value, but a legally binding obligation changes the juridical nature of the device. An executive failing to respect this floor violates a formal constraint, which opens legal recourse. Citizen decision thus acquires an enforceability it previously lacked.
The choice of a threshold of 1% of net current revenue merits attention. Net current revenue measures resources actually available after deduction of mandatory transfers. It is the portion of the budget over which the city exercises genuine discretion. Indexing the floor to this measure rather than gross budget makes the constraint more robust: it adapts to resource variations without being able to be circumvented by a modification of budget structure.
Three thousand experiments, a shared fragility
Belo Horizonte is not an isolated case. Participatory budgeting has been adopted by more than three thousand cities worldwide since Porto Alegre. In Europe, cities like Seville, Lisbon, and Paris have deployed similar mechanisms. In Africa, Dakar and several Kenyan cities have experimented with adapted versions. In South Asia, Indian municipalities have integrated participatory elements into their local budgets.
The history of these experiments is marked by a repeated asymmetry. Mechanisms advance under favorable administrations and regress under hostile ones. The continuity of voting does not guarantee continuity of financing. Academic work on these experiments, notably by researchers such as Yves Sintomer and Brian Wampler who have compared dozens of cases across multiple continents, shows that the device’s durability depends less on initial enthusiasm than on institutional mechanisms that protect it from political transitions.
This is precisely the mechanism Belo Horizonte is attempting to construct. The reform can be read as a response to the most frequently documented problem in the literature on the subject: citizen participation collapses when it remains a discretionary decision of the executive rather than an institutional obligation.
Guaranteed financing without execution capacity
The separation between guaranteed financing and execution capacity introduces a form of disconnect that reproduces, at another level, the very logic the reform seeks to correct. The vote produces a formal right to a budget appropriation, but this appropriation transforms into realization only if the downstream administrative chain functions without rupture. Yet this chain depends on human and procedural resources that are not automatically strengthened by the existence of a legal floor, so the financial constraint can become visible without the operational constraint ever being made public or enforceable.
The question posed by the reform goes beyond the floor itself. Guaranteeing financing solves the problem of budget depreciation. But the 280 projects still awaiting delivery in January 2025 signal a second problem: administrative capacity to transform votes into concrete realizations.
A voted project must be designed technically, submitted to procurement procedures, awarded, monitored, and delivered. In a city of three million inhabitants, this execution chain mobilizes technical teams and incompressible timelines. If the legal floor guarantees credits but does not strengthen engineering and monitoring capacity, the risk is reconstituting a stock of unfulfilled commitments, this time for administrative rather than financial reasons.
The Municipal Chamber’s technical note identifies this risk. It documents bottlenecks in the execution phase and recommends strengthening monitoring teams. The reform of the legal floor will therefore be complete only if it is accompanied by a reform of the city’s operational capacity to deliver what residents vote for.
Legal floor or execution capacity: what the years 2026-2035 will determine
The open question is one of trajectory. Two scenarios are emerging for Belo Horizonte and for cities that will draw inspiration from this reform.
In the first, the legal floor stabilizes financing and the city invests simultaneously in its execution capacity. The 280 awaiting projects gradually clear. Delivery rates rebound. Resident participation in neighborhood assemblies recovers, because residents observe that their votes produce tangible results. The mechanism regains the credibility it lost during the years of decline.
This scenario assumes continuous political will, a strengthened administration, and a public tracking procedure that makes delays visible.
In the second, the floor guarantees credits but the stock of undelivered projects reconstitutes for operational reasons. Procurement timelines lengthen. Technical teams are insufficient. Residents vote for projects that enter an opaque queue. Confidence is not restored, even if credits are formally present.
This scenario would be particularly damaging to the credibility of the reform itself: if the problem was not only financing but also delivery capacity, the solution will be only partial.
The difference between the two trajectories will play out on measurable signals in the next three to five years. The first is the annual delivery rate of voted projects: if the share of projects delivered in the year increases, the device functions in both dimensions. The second is the evolution of the stock of awaiting projects: regular decrease signals that the reform is addressing the backlog and preventing reconstitution of a new one. The third is the participation rate in assemblies: sustained growth indicates that residents have restored their confidence in the mechanism.
For other cities watching Belo Horizonte, the conditional lesson is already useful. A legal constraint on financing is a necessary condition for participatory budgeting’s durability. It may not be sufficient. Cities that draw inspiration from this reform will also need to document their execution capacity and make it public. A guaranteed budget fraction, without a transparent monitoring system and without technical teams sized to the workload, reproduces the breach of trust in another form.
There is a connection here to a broader question about local government’s capacity to honor its commitments over time. Institutional innovations that create new rights for residents are worth their weight only if they are accompanied by the means to fulfill them. Belo Horizonte has posed the first constraint: money must follow the vote. The next is to show that the project follows the money.
