Category Archives for Participatory Budgeting

13 New Articles on Participatory Budgeting

A band inaugurates a public work selected through participatory budgeting in Brazil (picture by Prefeitura de Olinda on Flickr).

The new issue of the Journal of Public Deliberation (Volume 8, Issue 2 – 2012) presents 13 new articles on participatory budgeting. Edited by Janette Hartz-Karpz (Curtin University) and Brian Wampler (Boise State University) “This special issue of the Journal of Public Deliberation brings together leading scholars expand our conceptual tools to understand why PB programs are being adopted, how governments are adapting the rules and principles to meet different policy and political goals, and the impact of PB on civil society, state reform, and social well-being.”

Below links to the articles:

Transnational Models of Citizen Participation: The Case of Participatory Budgeting
Yves Sintomer, Carsten Herzberg, Anja Röcke, and Giovanni Allegretti

The Benefits of Citizen Engagement: a (Brief) Review of the Evidence

Picture by neotint on flickr.

(I am working on a brief literature review on the benefits of participation, focusing on its different types of impact. Most of it (but not entirely) relates to participatory budgeting. Below are a few of the sections covered and a rough draft. Ideas and suggestions for topic coverage and literature (preferably peer-reviewed) are more than welcome.)

INCREASED TAX REVENUE / REDUCTION OF TAX DELINQUENCY

As shown in a cross-national analysis by Torgler & Schneider (2009), citizens are more willing to pay taxes when they perceive that their preferences are properly taken into account by public institutions. Along these lines, the existing evidence suggests the existence of a causal relationship between citizen participation processes and levels of tax compliance. For instance, studies show that Swiss cantons with higher levels of democratic participation present lower tax evasion rates, even when controlling for other factors. This effect is particularly strong when it comes to direct citizen participation in budgetary decisions, i.e. fiscal referendum (Frey & Feld 2002, Frey et al. 2004, Torgler 2005). In the Latin American context, a number of authors have observed a similar relationship with regard to participatory budgeting processes. In the municipality of Porto Alegre (BR) for instance, Schneider and Baquero (2006) show that the adoption of PB led to a substantive increase in tax revenues. In a similar vein, a comparative study of 25 municipalities in Latin America and Europe finds a significant reduction in levels of tax delinquency after the adoption of PB (Cabannes 2004: 36). In another study Zamboni (2007) compares the performance of similar Brazilian municipalities with and without PB processes: even when controlling for other factors, the study finds a significant relationship between the existence of PB and the reduction of tax evasion.

Some evidence suggests that participation may be even more effective at curbing tax evasion than traditional deterrence measures, such as fines and controls. At odds with conventional economic reasoning, the literature in the field of “tax morale” suggests that citizen participation actually comes across as a better remedy for tax evasion than commonly adopted deterrence policies (e.g. Torgler 2005, Feld & Frey 2007, Feld & Torgler 2007) .

INCREASED EFFICIENCY / BETTER ALLOCATION OF RESOURCES

According to a study by the Institute of Development Studies (IDS) on the PB process in Rio Grande do Sul state, “PB has promoted a redistributive development model while improving budgetary planning and efficiency” (Schneider & Goldfrank 2002, p. iii). From an efficiency point of view, the study observes that the PB process improved governmental capacity to allocate funds across governmental divisions (e.g. secretariats) to enact planned projects. For instance, with the implementation of PB, the rate of completion of budgeted education projects increased from an average of 62.5% to 82.5% (Schneider & Goldfrank 2002) . The implementation of PB also increased the planning capacity of the state, leading to a budget that better forecast the revenue receipts, with the government actually spending amounts systematically closer to the planned expenses (Schneider & Goldfrank 2002).

Another study on the municipality of Porto Alegre shows that prior to the implementation of the PB process, no more than two percent of the municipal budget was dedicated to investment, with most of the budget allocated to personnel expenses. Five years later, the combination of increased tax revenues and efficiency gains – engendered by the PB process – led to a tenfold increase in the percentage of investments (Baiocchi 2003). Finally, as shown by Zamboni’s (2007) quantitative study, even when controlling for other factors, municipalities that adopt PB processes are better managed and present less financial irregularities (e.g. corruption) than those without PB.

The elements highlighted above lead to another question regarding the extent to which citizen engagement leads to more targeted and evidence-based allocation of resources. The literature dealing with citizen participation primarily approaches this issue by considering the extent to which participatory processes lead to an inversion of priorities and to increased social justice. In this respect, the available evidence suggests that participatory budgeting leads to significant shifts in priorities and policies, towards expenditures that directly benefit poor sections of society (Avritzer 1999, Navarro 2001, Blore et al. 2004). In a similar vein, quantitative analysis by Baiocchi et al. (2006) finds that participatory budgeting is strongly associated with a reduction in extreme poverty and increased access to basic services. More recently, a World Bank report demonstrated that participatory budgeting bears a statistically significant impact on a number of social indicators. Amongst others, the authors of the report find that PB is positively and strongly associated with improvements in poverty rates and water services (World Bank 2008).

INCREASED TRUST AND IMPROVED IMPLEMENTATION PROCESSES

The relationship between participatory budgeting and increased trust and legitimacy draws from a well-established body of literature dealing with issues of citizen participation, social capital and trust in government. It is widely known that citizen engagement leads to increased levels of trust in institutions: this holds true even when controlling for other factors (Brehm & Rahn 1997, Keele 2007, Tampubolon 2010) . Indeed, in some cases, one of the strongest effects of participatory processes is precisely that of increased trust in institutions (Altschuller & Corrales 2009).

The understanding that PB reduces implementation hurdles draws both from broader literature dealing with policy implementation and from the specific experience of PB itself. In a more general perspective, the evidence from experimental settings suggests that decisions made democratically lead to better cooperative models, mitigating problems of free-riding and facilitating subsequent policy implementation (Ertan et al. 2009, Dal Bó et al. 2010). Beyond experiments in controlled environments, the case for increased participation in decision-making processes – as a means to reduce implementation drawbacks – has been made in fields as diverse as those of economic reforms (Frieden 1991), agriculture policies (Bardhan 2000) and workplace decisions (Black & Lynch 2001). For PB the evidence is by no means different: as the outcome of an inclusive decision-making process, the implementation of PB decisions has been documented as less subject to elite capture and clientelist exchanges (Wampler 2001). The literature has also demonstrated the substantive popular support enjoyed by public works and services selected through the PB process, with local communities often collaborating with supplementary personnel, financial and material resources in order to increase the resources available for the implementation of PB projects (Cabannes 2004).

REFERENCES:
Altschuller, D., Corrales, J. (2009) “The Spillover Effects of Participation in Development Projects: Evidence from Honduras and Guatemala.” Working paper, CCEUP.

Avritzer, L. (1999) “Public Deliberation at the Local Level: Participatory Budgeting in Brazil.” Paper delivered at the Experiments for Deliberative Democracy Conference, Wisconsin January, 2000

Baiocchi, G. (2003) “Radicals in Power: The Workers Party and Experiments in Urban Democracy in Brazil.” London: Zed.

Baiocchi, G.; Heller, P.; Chaudhuri, S. and Kunrath Silva, M. (2006) “Evaluating Empowerment: Participatory Budgeting in Brazilian Municipalities”, in R. Alsop, M. Frost Bertelsen and J. Holland (eds), Empowerment in Practice: From Analysis to Implementation, Washington: World Bank

Bardhan, P. (2000) “Irrigation and Cooperation: An Empirical Analysis of 48 Irrigation Communities in South India.” Economic Development and Cultural Change, 48(4): 847–65.

Black, S., M. Lynch (2001) “How to Compete: The Impact of Workplace Practices and Information Technology on Productivity.” Review of Economics and Statistics, 83(3): 434–45.

Blore, I., Devas, N. and Staler (2004) “Municipalities and Finance: a sourcebook for Capacity Building.” Earthscan, London.

Brehm J, Rahn W. (1997) “Individual-level evidence for the causes and consequences of social capital.” American Journal of Political Science. Vol.41:999- 1023.

Cabannes, Y (2004) “Participatory budgeting: a significant contribution to participatory democracy”. Environment and Urbanization 16(1): 27-46

Dal Bó, P., A. Foster, and L. Putterman (2010) “Institutions and Behavior: Experimental Evidence on the Effects of Democracy” American Economic Review 100: 2205–2229

Ertan A., Talbot P., and L. Putterman (2009) “Who to Punish? Individual Decisions and Majority Rule in Mitigating the Free Rider Problem.” European Economic Review, 53(5): 495–511.

Feld, L. and Torgler, B. (2007) “Tax Morale After the Reunification of Germany: Results from a Quasi-Natural Experiment.” CESifo Working Paper No. 1921.

Feld, L.P., and B.S. Frey (2007) “Tax Compliance as the Result of a Psychological Tax Contract: The Role of Incentives and Responsive Regulation”, Law and Policy 29: 102–20.

Frieden, Jeffry (1991) “Debt, Development, and Democracy: Modern Political Economy and Latin America, 1965-1985.” Princeton, NJ: Princeton University Press.

Frey, Bruno S., Matthias Benz, and Alois Stutzer (2004) “Introducing Procedural Utility: Not Only What, but Also How Matters.” Journal of Institutional and Theoretical Economics, 160(3): 377–401.

Frey, Bruno S., and Lars P. Feld (2002) “Deterrence and Morale in Taxation: An Empirical Analysis.” CESifo Working Paper no. 760, August 2002.

Gaventa, J. & Barret, G. (2010) “So what difference does it make? Mapping the outcomes of citizen engagement”. IDS Working Paper, 347, 1-74.

Goldfrank, Benjamin (2006) “Lessons from Latin American Experience in Participatory Budgeting.” Paper presented at the Latin American Studies Association Meeting. San Juan, Puerto Rico, March 2006.

Keele，L. (2007) “Social Capital and the Dynamics of Trust in Government”，American Journal of Political Science，Vol.51，No.2：241-257.

Navarro, Z. (2001) “Decentralization, Participation and Social Control of Public Resources: “Participatory Budgeting” In Porto Alegre (Brazil).” Development, 41(3), 68–71

Schneider, A. and B. Goldfrank. (2002) ‘Budgets and ballots in Brazil: participatory budgeting from the city to the state’, IDS Working Paper 149. Brighton: IDS.

Schneider, A. and M. Baquero (2006) “Get What You Want, Give What You Can: Embedded Public Finance in Porto Alegre.” Brighton: Institute of Development Studies.

Tampubolon, G. (2010) “Civic engagement and trust in Britain 2003-2004.” ISC Working Paper 2010-14, Manchester University.

Torgler, B. (2005) “Tax morale and Direct Democracy.” European Journal of Political Economy 21, pp. 525 – 531.

Torgler, B. and F. Schneider (2009) “The impact of tax morale and institutional quality on the shadow economy.” Journal of Economic Psychology, 30(2). pp. 228-245.

Varma, K. N., & Doob, A. N. (1998) “Deterring economic crimes: the case of tax evasion”. Canadian Journal of Criminology, 40, 165–184.

Wampler, B (2004) “Expanding Accountability Through Participatory Institutions: Mayors, Citizens, and Budgeting in Three Brazilian Municipalities,” Latin AmericanPolitics & Society, 46:2.

World Bank Report (2008). “Brazil: toward a more inclusive and effective participatory budget in Porto Alegre.” Report No. 40144-BR.

Zamboni, Yves. 2007. “Participatory Budgeting and Local Governance: An evidence based evaluation of participatory budgeting experiences in Brazil.” Working Paper, Bristol University.

The Effects of Participatory Budgeting on Infant Mortality in Brazil

picture by Blog do Mílton Jung on Flickr

Adding pieces of evidence to the ROI of citizen participation. Highlights are mine:

Participatory budgeting, via which the common citizen is given the ability to interact with the elected politicians in the drafting of the local budget, became a popular political reform in Brazilian municipalities in the 1990s and attracted widespread attention across the world. This paper investigates whether the use of participatory budgeting in Brazilian municipalities in the period 1991-2004 has affected the pattern of municipal expenditures and had any measurable impact on living conditions. I show that the municipalities that made use of this participatory mechanism favoured an allocation of public expenditures that closely matched the ìpopular preferences and channeled a larger fraction of their total budget to key investments in sanitation and health services. I also found that this change in the composition of municipal expenditures is associated with a pronounced reduction in the infant mortality rates for municipalities which adopted participatory budgeting. This suggests that promoting a more direct interaction between service users and elected officials in budgetary design and implementation can affect both how local resources are spent and associated living standard outcomes.

You can read the full paper here [PDF].

Update:  The paper has been published in the World Development Journal. You can read the final version here [PDF].

The Guardian on Participatory Budgeting

The Guardian has come up with an interesting piece on Porto Alegre’s participatory budgeting, highlighting some of the benefits (well-known to some) of the process:

The effects have been overwhelmingly positive. Within seven years, the percentage of locals with access to sewers doubled from 46 to 95. The rate of roadbuilding, particularly in the favelas, rose five-fold. Tax evasion fell, as people saw what their money was being spent on.

Read the full article here.

 

Participatory Budgeting: Seven Defining Characteristics

I am often asked for definitions of participatory budgeting. Normally, I use the following definition in my texts:

“Participatory budgeting (PB) can be broadly defined as the participation of citizens in the decision-making process of budget allocation and in the monitoring of public spending.”

Nevertheless, while easy to understand, this definition opens the door to a big (and annoying) interpretation problem: some might think that simple budget consultations are the same as participatory budgeting, and they are not.

In my opinion, there are no perfect definitions, with different authors stressing different points. Based on the literature that I have read, I think that participatory budgeting – at least ideally – should present the following seven characteristics:

1) Public budgets are the object of the process, or at least part of it (it is not urban planning)

2) Citizen participation has a direct impact on the budget (it is not a consultation)

3) Citizens decide on the rules governing the process

4) The process has a deliberative element (it is not like the Swiss fiscal referendum for example)

5) A redistributive logic is embedded in the design of the process (e.g. poorest districts / areas get more money and vice-versa)

6) The process is institutionally designed to ensure that citizens can monitor public spending

7) The process is repeated periodically (e.g. on a yearly basis)

Of course, I am probably missing and adding elements that many scholars would point out. Some might fairly consider my interpretation as too orthodox: a number of initiatives that we call PB rarely combine all seven elements.

Just in case, a few other definitions / descriptions of the process:

• Here’s a practical definition, based on five criteria:

“(1) The financial and/or budgetary dimension must be discussed; participatory budgeting is dealing with scarce resources.

(2) The city level has to be involved, or a (decentralised) district with an elected body and some power over administration (the neighbourhood level is not enough).

(3) It has to be a repeated process (one meeting or one referendum on financial issues are not examples of participatory budgeting).

(4) The process must include some form of public deliberation within the framework of specific meetings/ forums (the opening of administrative meetings or classical representative instances to normal citizens is not participatory budgeting).

(5) Some accountability on the output is required.”

Source: Sintomer, Y., C. Herzberg and G. Allegretti, 2011. Learning from the South: Participatory Budgeting Worldwide – an Invitation to Global Cooperation. Dialog Global, No. 25  [PDF]

• Another one is from a seminal article by Boaventura de Souza, based on guiding principles. An important element in this definition: citizens are the ones who decide the internal rules that govern the participatory process.

“The participatory budgeting is a structure and a process of community participation based on three major principles and on a set of institutions that function as mechanisms or channels of sustained popular participation in the decision-making process of the municipal government. The three principles are:

a) All citizens are entitled to participate, community organizations having no special status or prerogative in this regard;

b) Participation is governed by a combination of direct and representative democracy rules and takes place through regularly functioning institutions whose internal rules are decided upon by the participants;

c) Investment resources are allocated according to an objective method based on a combination of “general criteria” – substantial criteria established by the participatory institutions to define priorities – and “technical criteria” – criteria of technical or economic viability as defined by the executive and federal, state, or city legal norms – that are up to the executive to implement.”

Source: Santos, Boaventura de Souza. 1998. “Participatory Budgeting in Porto Alegre: Toward a Redistributive Democracy.” Politics & Society [PDF]

• Another definition, by the PB veteran Brian Wampler, stresses a major element often forgotten by scholars and advocates: the monitoring of public spending. Another important element refers to the redistributive nature of PB (e.g. poorest neighborhoods get more money).

“Participatory Budgeting (PB) programs are innovative policymaking processes. Citizens are directly involved in making policy decisions. Forums are held throughout the year so that citizens have the opportunity to allocate resources, prioritize broad social policies, and monitor public spending. These programs are designed incorporate citizens into the policymaking process, spur administrative reform, and distribute public resources to low-income neighborhoods. Social and political exclusion is challenged as lowincome and traditionally excluded political actors are given the opportunity to make policy decisions. Governments and citizens initiate these programs to (i) promote public learning and active citizenship, (ii) achieve social justice through improved policies and resources allocation, and (iii) reform the administrative apparatus.”

Source: Wampler, B. 2000. “A Guide to Participatory Budgeting.” Paper presented at the Conference on the Participatory Budget, Porto Alegre, Brazil. [PDF]

A couple of other, shorter definitions:

• One often used by advocates in the US:

“Participatory budgeting (PB) is a democratic process in which community members directly decide how to spend part of a public budget. […]”

Source: http://www.watsonblogs.org/participatorybudgeting/aboutpb.html

• Another one used by the PB Unit in the UK (and the Department of Communities and Local Government – DCLG UK Govt.):

“Participatory budgeting directly involves local people in making decisions on the spending and priorities for a defined public budget. PB processes can be defined by geographical area (whether that’s neighbourhood or larger) or by theme. This means engaging residents and community groups representative of all parts of the community to discuss and vote on spending priorities, make spending proposals, and vote on them, as well giving local people a role in the scrutiny and monitoring of the process and results to inform subsequent PB decisions on an annual or repeatable basis.”

I hope that helps.

Open Government: Technology and Citizen Engagement

A talk I recently gave at the World Bank on citizen engagement and technology.    

Mapping Participatory Budgeting and e-Participatory Budgeting

This is still work in progress. I have been trying to map  participatory budgeting and e-participatory budgeting initiatives across the world.There are many more e-participatory budgeting initiatives to be inserted, as well as offline initiatives. The e-PB initiatives included so far are highlighted in red color.

If anyone here at can think of any cases to be included or would like to collaborate in this effort, please let me know.

Any suggestions on how I could make this map more useful are very welcome.

 

Open Knowledge Festival

I will soon be in Helsinki for the Open Knowledge Festival to give a keynote lecture. The subjects will be citizen engagement, participatory budgeting and technology. This talk will be on  the topic stream “Open Democracy and Citizen Movements”.

Here’s a summary of the session:

The Open Democracy and Citizen Movements stream explores the recent moves towards a more open and participatory democracy and society. Online tools allow people to speak, be heard, find each other and take collective action in new ways. The stream will showcase and debate the topic starting with the formal means of the new democracy as for instance, the crowdsourced Icelandic constitutional reform, participatory budgeting and European citizens’ initiatives. The theme carries on to to the informal, non-mandated citizen movements that are shaping our societies from the bottom up.

Looking forward to it!

From Australia, An E-Participatory Budgeting Experiment

(originally posted at TechPresident)

The government of the Australian state of New South Wales (NSW), in an attempt to mitigate the effects of the economic downturn and stimulate local economies, has allocated the equivalent of US$30 million to the Community Building Partnership program. Aiming to support local jobs, stimulate growth and improve community facilities, the program allocates between US$260,000 and US$ 350,000 to each of the 93 NSW electoral districts. Under the program, community groups are eligible to electronically submit applications for funding to support local infrastructure and jobs in the district. Once applicants meet the requirements, MPs prioritize which projects are to receive funding.

However, the real novelty comes from the electoral district of Heathcote, where MP Paul McLeay is inviting the district’s citizens to decide through the Internet on the allocation of the funds that the government has made available. On the rather 2.0 MP’s website, the legislator uses video to explain the context of the initiative and invite citizens to prioritize the eligible proposals formulated by local community organizations.

From October 6th, citizens will be able to cast five votes each – with a maximum of 3 votes per project – in order to decide which causes are the most deserving of existing funds. According to a local article on the initiative, a system has been deployed to ensure that only residents of the district vote and to keep the initiative from being defrauded (e.g. multiple voting). In this respect, voting is auditable and, apparently in the same way as Belo Horizonte’s e-participatory budgeting system, votes are only considered valid by the system if the information provided is accurate and compatible with that contained in the electoral roll.

In order to alleviate the effects of the digital divide, the initiative counts on the support of local libraries that have made some of their computers available for citizens to access the initiative’s website. Last, but not least, the website will provide tools for organizations and supporters to lead their online canvassing, such as newsletters and website widgets.

E-participatory budgeting, as it spreads around the world, takes various forms. But, ultimately, it is always about leveraging the dispersed knowledge of citizens to shape decisions that invariably affect their lives. It will be interesting to see how the wisdom of the Heathcote crowd will operate in the allocation of their stimulus funds. Probably better than most earmarks we see around. Any bets?

Just released: Open Budget Index

(Originally posted here)

The International Budget Partnership released today the Open Budget Index (OBI). The UK scores first on the provision of budget information to its public, followed by South Africa, France, New Zealand and the United States. On the other hand, 80% of the surveyed governments fail to provide sufficient information on the budget to its public.

The study takes into account an important aspect which is the release of a simplified and accessible version of the budget (citizen’s budget). In this case, only 17 countries provided such budget information in a format accessible to the broader population.

A major finding of the survey is the fact that, even though most governments produce budget information that would be crucial to public involvement in the budget process, these same governments fail enormously when it comes to releasing the information: 51 out of 85 governments surveyed produce at least one major document that is not released to the public.

This is particularly striking given that governments could easily – and with low costs – improve their transparency by releasing this information through the Internet. As the report shows, even though most governments (68) disclose their enacted budget on the Internet, the majority fails to provide other relevant information such as a pre-budget statement. In fact, as has been pertinently underlined, much of the information considered to be “publicly available” (criteria of the study) can be obtained only upon request or the payment of a fee.

An interesting remark concerns how civil society organizations specialized in budget issues can enhance the performance of legislatures in the budgeting process. The OBI report also provides examples of good practices in the processes of budget formulation, approval, execution and audit.

Given the magnitude of the report, the study has its limits: the OBI index evaluates publicly available information on the budget issued by central governments only, leaving aside the subnational level where, in many cases, much of the action takes place.

Nonetheless, it is still a monumental work of the International Budget Partnership.

To access the full report and other relevant information click here.