Many cities around the world practice some form of participatory budgeting, but even among those that do, Cascais [Portugal] is an outlier. It spends prodigiously through the system: in Paris, five per cent of the city’s annual investment budget has been allocated to participatory projects in recent years, but in Cascais, more than fifteen per cent of the budget flows through the program, and the percentage can float higher if voter turnout rises. Cascais is surprising in another way: its mayor, Carlos Carreiras, is both a champion of participatory budgeting and a member of a center-right political party. Participatory budgeting is often considered a tool of the left, but its role in Cascais suggests that it could have a broader appeal; part of the theory behind it is that citizens can be better than officials at knowing how money should be spent.
Of course, it won't solve all of our problems:
Even in the best of circumstances, participatory budgeting faces some structural limitations. Citizens can’t use it to raise the minimum wage, for instance, or to reconfigure affordable-housing policy, or to ban single-use plastics. As it stands, the approach “will never change the destiny of a poor neighborhood,” Giovanni Allegretti, a senior researcher at the Centre for Social Studies at the University of Coimbra, told me. Allegretti noted that participatory budgeting is mainly a competitive process involving limited resources with no long-term strategy; it doesn’t eliminate the need for other policy interventions. But when it functions effectively, participatory budgeting can give direct political power to those who might otherwise have very little of it.
There is something very compelling about empowering people to come up with new ideas, compete with others for the best ones, and then participate in public decisions. It also strikes me as a possibly efficient way to force: "We only have this much money to spend. What should we spend it on? Spending on this means not spending on that. Time to make a decision."
And now it has me wondering: If we asked Toronto whether it wanted to spend over $1 billion to rebuild the Gardiner Expressway east or spend it on other things, what do you think it would say?
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Three quick and unrelated things for today's post:
1.
A handful of years ago, before the pandemic, Bullpen Consulting, Slate Asset Management, and AD HOC STUDIO started a somewhat irregular basketball meetup for Toronto's development industry called City Builder Ball. It, of course, fell off the rails during the pandemic, but as of this month we are officially back at it! We played over the weekend and I can't tell you how much fun it was to run around a gym for an hour and play basketball very poorly -- so much fun. The next meetup will be in January and if you'd like to join, drop Ben Myers of Bullpen an email to get on the mailing list. It is open to all.
2.
A few months ago I wrote about a passion project that I am working on with a friend, called Unlyst. The idea is to see if there is a way to leverage the "wisdom of crowds" to determine the current market value of housing. And the way it works is that we feature a home on the website, people (or the crowd) get 14 days to input what they think it's worth, and then we come up with something we are calling an "unlysted value." There's a lot of evidence of this sort of thing working exceptionally well for other markets, so we're very curious to see if it can work for housing. If you're interested in contributing your home and/or just seeing how it works, check out unlyst.com.
3.
World Cup Finals. What a game! A huge congratulations to Argentina and, of course, Messi. I should, however, come clean and say that I know virtually nothing about football, I don't know why the field is so big, and that my overall impression of the game used to be mostly consistent with this Simpsons' take (albeit with more sensationalized flopping by men with faux hawks). But since Canada qualified this year, I felt it was my duty to watch -- at least some bits and until we got eliminated. And since the finals are the finals, and since I have an open crush on France, I figured this would also be a good game to watch. Turns out I was right. And now, I am fairly certain that it has turned me into a true fan -- or at the very least a "I could watch a finals game every 4 years" kind of fan. Who knew that soccer, I mean football, could be so thrilling?
Photo by Florian Wehde on Unsplash
One of the most profound shifts taking place today – because of new technologies – is that of decentralization. I’ve written about this before, but I keep coming back to it because I find it so fascinating.
It’s happening to varying degrees, but as a general trend, I believe it is leading to better data (less information asymmetries), more efficient markets, and the removal of many middle people. In the past, some intermediaries were necessary in order to act as proxies for portions of the market. But I believe that is changing.
So what’s an example of this? Bitcoin. Bitcoin is an example of decentralization because no one entity controls it. It operates through a decentralized public ledger. And because of this, it has the potential to be highly disruptive to the way we think about currencies today.
Put another way, I see decentralization as a way to leverage the wisdom of crowds. I am convinced that large groups of people can be incredibly intelligent when they’re allowed to contribute in the right ways. And I think this could solve many different problems, from the infighting we see within cities to broader market phenomena.
As another example, there’s something new in the venture capital space called DAO – which stands for Decentralized Autonomous Organization. Essentially it’s a decentralized VC platform based off of a Bitcoin derivative currency.
But perhaps the most noteworthy and relevant feature is that it allows its large pool of investors to anonymously vote on which investments to pursue. This is in contrast to a more centralized approach where an investment committee would meet behind closed doors in a big boardroom and make a decision. This would be the more typical approach.
If you’re not in the tech space, the above may not seem all that exciting to you. But I see many parallels between venture capital and real estate development, which is one of the reasons I follow the space. So I can’t help but wonder what this trend could ultimately mean for real estate, design, and other city building industries.
I can certainly imagine a world where the forces that shape our cities are more collective and decentralized in nature. It’s already starting to happen through crowdsourcing, social media, ridesharing, and other online platforms.