The paper analyses the pedagogical dimension of the process of Participatory Budgeting in the State of Rio Grande do Sul (Brazil), taking into consideration the local and regional culture as well as the wider political milieu. The question this paper engages with is whether, in this social movement involving around 400,000 people in 2001, there are signs that a new form of education is emerging geared towards the production of a new social contract. The background of the discussion is the political-pedagogical works of Jean-Jacques Rousseau and Paulo Freire. Their respective pedagogical approaches might be taken as particular signals of, on the one hand, the creation of the modern social contract and on the other the basis for a search for a new contract. (Contains 14 notes.)