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What relevance can a middle-sized Brazilian city possibly have for the rest of the world? This book provides the answer. We live in an age where there is more and more disillusion with periodically trooping to the polls, voting with the party herd, and supporting politicians who, once in office, act contrary to the promises they made on the hustings. The practice of representative democracy, in short, does not command much confidence. In the US, elections are dominated by big money. In developing countries, structural adjustment and neoliberal economics compel governments to ignore the demands of ordinary people for services like health and education. This is where the participative budgetmaking experiment in Porto Alegre comes in. Over the past decade, this city has institutionalized the direct involvement, locality by locality, of ordinary citizens in deciding spending priorities. This book gives a down to earth description of how this democratic innovation works in practice. It explores the difficult questions. Can inhabitants taking part in public management really strengthen its efficiency? Is genuine participation possible without small groups monopolizing power? Can local organizations avoid becoming bureaucratized and cut off from their roots? Can neighbourhood mobilization go beyond parochialism and act in the general interest? The authors also raise the bigger question about what are the lessons to be learned from Porto Alegre for a renewal of democratic institutions elsewhere in the world. This is why this illuminating and independent-minded investigation will of use to scholars, politicians and those campaigning for a deepening of democratic institutions worldwide.