Participatory Budgeting: A Review of the Promise and Pitfalls

By Richa Mishra

In December 2013, the White House included Participatory Budgeting as a key initiative in its Second Open Government National Action Plan. As a follow-up, in May 2014, the Office of Science and Technology hosted a day-long discussion on Participatory Budgeting among practitioners, academics and researchers, government staffers and funders. Around the same time, the Africa Research Institute published a report on a PB initiative in Yaoundé, Cameroon. The contextual details of these two events could not be more disparate and yet the key objectives and concerns revealed a striking similarity.

Participatory Budgeting (PB for short) is still relatively new to the United States given that the first project was launched in 2009 in three wards in Chicago. Since then, it has been implemented in New York City, Vallejo CA, San Francisco, Rochester NY, St. Louis and Boston. While PB is a recent phenomenon in North America, it has been practiced in other parts of the world in very diverse settings.

The Brazilian city of Porto Alegre is regarded as the birthplace of Participatory Budgeting. What began in 1989, born out of necessity and in response to the extreme inequality in living standards among residents of the same city, is now a collaborative effort involving thousands of citizen participants to allocate up to 20% of the city’s budget.

PB has now spread to over 1500 cities in Latin America, Africa, Asia, North America and Europe. Further, PB has not remained restricted to cities alone — and the same principles and processes have been applied in projects as diverse as housing allocation, university budget planning and last but not least planning for scarce resources in poor villages all over the world.

The World Bank defines PB as

…an innovative mechanism which aims to involve citizens in the decision-making process of public budgeting. By creating a channel for citizens to give voice to their priorities, PB can be instrumental in making the allocation of public resources more inclusive and equitable. By promoting public access to revenue and expenditure information, PB effectively increases transparency in fiscal policy and public expenditure management, reducing scope for clientelistic practices, elite capture, and corruption, thereby enhancing the government’s credibility and the citizens’ trust. PB can also improve service delivery by linking needs identification, investment planning, tax systems and project management. Thus, PB goes beyond a simple participatory exercise to being an integrated methodology for promoting social learning, active citizenship and social accountability, opening new ways of direct participation which complements traditional forms of representative governance.

This definition captures the objectives, the scope and the intended outcomes of Participatory Budgeting. However, implementation in real life is complex and defies simple definitions. And therein lies the rub. At its best, PB contributes to deepening democracy. It empowers citizens from passive observers to active participants in public processes, and paves the way for citizens’ voice and choice to influence public policies. It makes arcane and abstruse policy decisions open and transparent; and public authorities answerable and accountable to the public. It also contributes to modernizing public administration and aligning it with public priorities. It improves the effectiveness of public spending and enhances people’s trust in public institutions.

On the flip side, critics of PB point that it is a great idea whose implementation remains problematic not least because genuine participation is difficult to garner. Admittedly, when implemented without the requisite forethought, planning and the attendant checks and balances, not only does PB fail to meet its objectives but it can be perverted with the veneer of token participation to render resource and budget allocation ever more opaque and inequitable.

Although PB is associated with urban settings for the most part and the overwhelming majority of case studies on PB from the global north are city/town based, it has been adapted and practiced in rural settings as well. In fact, this blogger’s personal experience with PB has entirely been within deprived rural communities where the challenges of participation, marginalization and lack transparency and accountability are so intractable that they take on a whole new meaning. To learn more about how and under what conditions open budgeting can lead to alleviating poverty and improving quality of life for the poor and disadvantaged refer to this report from the World Bank Institute.

Whether implementing PB in a remote indigenous community with little or no access to education, health and clean water–or in the city of Boston where the country’s first youth PB initiative was launched in January 2014 — certain common lessons apply.

Context is critical. Paradoxically, the first and most important lesson is that one size does not fit all. It becomes critical then that the processes, procedures and tools employed are in line with contextual realities. For instance, in one case the use of digital technologies may encourage participation by allowing those who cannot be physically present for meetings to participate. In other cases, where access to technology is limited, it may severely impair participation.

PB not a panacea. Expectations of what can be achieved, with limited resources and in a certain time frame, need to be realistic. Trying to do too much too soon does not work and the scope and scale of the initiatives should be prudent and pragmatic.

Well-defined purpose. PB lives up to its promise when the purpose and outcomes (not outputs) of the exercise are defined clearly. As a rule, it is helpful to remember that the main objective of PB is to promote citizen engagement and participation in primarily local matters that affect people’s day to day lives and not a short cut to direct democracy.

Process backed by results. Citizen engagement and participation have to be genuine, and that takes time and effort beyond token participation in the guise of consultation and information dissemination. Genuine citizen participation ensures that the community as a whole feels ownership which in turn ensures the continued sustainability of the gains. Chasing quick results at the cost of process is deleterious to participation, ownership and sustainability. Yet people need to see their voice making a difference for PB to work, so diligent adherence to process without tangible, demonstrable results is also a problem.

Engaged from the start. Mobilizing people’s participation cannot be an afterthought; it has to be the first step. People have to be engaged and active throughout the process of identifying and defining problems, prioritizing needs, planning, implementation, monitoring, oversight and evaluation. Unless this is so, PB cannot be deemed truly participatory.

Reduced costs to participation. Under the guise of promoting citizen engagement, an ill-conceived PB process could in fact create a situation in which powerful segments of the community and the local administration can collude to allocate budget to suit their preferences. To be successful the effort has to ensure that participation is truly open to all. This means, among other things, reducing the opportunity costs of participation for the poor and marginalized, the very people PB should seek to engage first and most.

Strong champions. PB needs many champions actively advocating and pursuing its cause. It needs political champions as well as commitment from community organizers, government bodies and formal and informal citizens’ groups. In Porto Alegre, elected officials who supported PB were successful at the polls, because it was popular. Other places that have launched PB initiatives have not been able to solve this political equation.

Photo credit: Hollie Russon Gilman

These are only some important lessons that have emerged on how PB can contribute to bringing public expenditure more in tandem with public demand. Indeed, there are many more.

The record on PB is still evolving and somewhat mixed. Amending and adjusting to context, sharing experiences and lessons and learning through the process of trial and error will help refine the process and make it up to its potential. This is why consultations like the one hosted by the White House Office of Science and Technology and reports like the one from Africa Research Institute are invaluable. They allow practitioners on all sides to share and learn from each other and hone the process.

One final note: while the principles and overall contours of the process remain the same, each PB effort will evolve along its own path, not least because people themselves own the process and will tweak it to suit their particular situation. And that is exactly as it should be.

Richa Mishra is a research fellow at the Ash Center for Democratic Governance and Innovation. She has over 15 years of experience in international development and public policy formulation with the UN system, the World Bank and research and academic institutions. Richa has extensive experience in promoting democratic institutions in transitional political systems.

Originally published at www.challengestodemocracy.us.