Competitive institution building: The PT and participatory budgeting in Rio Grande do Sul

In the late 1990s, the Workers' Party (PT) government of the Brazilian state of Rio Grande do Sul introduced participatory budgeting, a process in which citizens establish annual investment priorities in public assemblies. This innovation was one of several attempts by incumbent parties to structure political conflict using budget institutions. The character of participatory budgeting is most evident in its policyrnaking processes and policy outcomes. The process circumvented legislative arenas where opponents held a majority, privileged participation by the PT's voter base, and reached into opposition strongholds. The outcomes favored the interests of potential supporters among poor and middle-class voters. The political project proved vulnerable to its own raised expectations: it failed to sustain the image of clean government; brought tax increases along with fiscal insecurity; and left unfulfilled the participants' expectations for targeted investments. This article highlights the role of participatory budgeting, indeed all budgeting, in partisan actors' institutional choices.