Participatory Budgeting

A collaborative process that allows organizations to allocate/reallocate their financial resources efficiently across business units and investment areas, ensuring funding aligns with strategic priorities. It's strategic investment allocation.

✅ Improves financial transparency & accountability

✅ Aligns investments with business objectives

✅ Encourages cross-functional collaboration

✅ Enhances agility in budget allocation

✅ Promotes employee engagement in decision-making

Origins of Participatory Budgeting

📌 Participatory Budgeting (PB) originated in Porto Alegre, Brazil, in 1989 as a grassroots initiative to increase financial transparency and citizen engagement in budget decisions.

📌  It was introduced by the Workers' Party to democratize fiscal planning and ensure that public funds were allocated to high-priority community needs.

📌  The process empowered local residents to directly influence budget allocation, particularly for infrastructure, education, and healthcare projects.

Early Adoption and Global Expansion

🌎 After its success in Porto Alegre, PB expanded across Brazil and was adopted in over 100 municipalities by the late 1990s.

🌎  The model spread globally, influencing budgeting reforms in Latin America, Europe, and Africa.

🌎  The World Bank and United Nations recognized PB as a best practice for democratic governance and fiscal transparency.

🌎 Cities like Paris, New York, and Madrid have adopted PB to allocate public funds more equitably.

Evolution of Participatory Budgeting into Corporate Private Sectors

♻️ Initially, Participatory Budgeting was a government-driven initiative, but private organizations began adopting similar frameworks for resource allocation and stakeholder engagement.

♻️ Deloitte and Bain & Company highlight how Participatory Budgeting principles enhance corporate financial planning, particularly in agile investment management.

♻️ Large enterprises now use Participatory Budgeting-inspired models to balance short-term financial goals with long-term innovation investments.

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