Author: Emily Moir, The Business of Cities.

Portugal continues to struggle with the after-effects of the Global Financial Crisis. Unemployment remains stubbornly high, particularly amongst young people (around a third of whom are out of work), the country’s largest listed bank collapsed at the beginning of August, and personal indebtedness levels are still of concern.

Gallup[i] and the Financial Times[ii] have reported that political discontent has surged with the ongoing economic hardship. But there are glimmers of hope to be found at the city level. Leaders in the capital, Lisbon, have been working hard to increase citizen engagement in local politics, with positive effects.

Lisbon has not escaped the hardships felt by Portugal as a whole: it has suffered from severe out-migration with around 100,000 inhabitants leaving the city for each of the last three decades, and overall unemployment was the highest in the country at the end of last year.[iii]

As Deputy Mayor of Lisbon and the Councilperson responsible for Economy, Innovation, Modernisation and Decentralisation, Graca Fonseca has employed numerous strategies aimed at revitalizing the city’s economy, from cutting red tape for start-ups and entrepreneurs, to enhancing the city’s appeal as a centre for movie and TV filming. However she has also focused on bringing decision making closer to the city’s citizens, to ensure that they are getting the services that they want and need in times of national austerity.

Fonseca has led a major administrative reform programme which aims to increase power and resources at the local level in the city. Lisbon has two levels of administration – a lower tier of parishes and an upper tier of the City Council. Fonseca’s reform has consolidated the city’s lower tier of administration, reducing the number of parishes from 53 to 24. This has allowed for a tripling of parish budgets, which the City Council hopes will in turn increase power at the local level. The reform is the most significant innovation in Lisbon’s administrative structure in more than 50 years.

Lisbon’s city leaders have also employed an inventive new method of participatory budgeting. Introduced in 2008, the scheme sets aside 5% of the city’s investment budget each year to be used as the citizens wish.

Citizens propose projects that they would like to see in the city, either online, or through participation in on-street ideas collection. One method of ‘on-street collection’ is an outdoor post-it wall, designed specifically for citizens to ‘post’ their ideas to. After two months the city collects the ideas and adapts them into schemes, by assigning each project an appropriate price and timescale. The collated schemes are then presented to the public, who have a further two month period in which to vote for their favourite. The council undertakes to implement all schemes with the most votes, up to the threshold investment amount, within two years of the winners being decided.

The participatory budget has been a huge success – in only six years the number of participants has increased from 1,000 to 40,000 voters.  In 2013, there were 16 project winners, including two projects which secured over 150,000 Euros of investment – a botanical garden project and a mobility project.[iv] It is hoped that the scheme will not only result in public money being spent more effectively but, by its transparent and democratic nature, will also enhance citizens’ trust in the city’s politicians.

 

[i] Economic Hardship, Political Discontent Surge in Portugal
[ii] www.ft.com – Discontent threatens Portugal’s fiscal progress 
[iii] Lisbon leads the country’s unemployed
[iv] Project Winners 2013