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Participatory budgeting: what should we expect?

Interview with Einar Braaten, professor of Norwegian Institute for Urban and Regional Research University of Oslo and Akershus.

Prepared by Oksana Vasylytsya

Q: Participatory budgeting means that citizens can take part in process of city budget distribution. Are there different types of it?

A: There are many types of this process. A very simple one: city council decides on a portion of the budget that could be used and delegate the decision of money usage to a certain entity like district community or tenant association. We have seen it for example in Chicago. These entities may be invited to participate in budgeting. After that, they are responsible for money usage. On the other extreme end, we have Porto Alegre in Brazil, where a parallel city council is directly elected by communities. That parallel city council is sitting only for 1 year. They look into all aspects of the city budget and give very strong recommendations on what should be a priority for the whole city. Members of that council pay attention also to allocations. For instance, a school in very marginal district should be a priority #3 and new swimming pool in the middle-class area should be a priority #10. It is a very important instrument in handling the budget for the whole city. To sum up, the first delegated type is easier to organize. But, for example in Norway it is illegal. All the taxpayers’ money should be accounted by municipal authorities. If they transfer responsibility to someone who was not elected, it will be illegal. In Oslo, we decided to start from the simplest way, but it turned out to be not so easy.

Q: Is phenomenon of participatory budgeting widely spread in the world? What cities usually use it? In what countries participatory budgeting is spread: developed or developing?

A: There are two types of spreading of participatory budgeting.  The first type is more civil society movement, inspired by Porto Alegre. They have some event called Social Forum. It started in 2001. Porto Alegre was a host city and people came from all over the world. This city has practiced participatory budgeting for more than 10 years. So they are very mature.

The second type was initiated by the World Bank, which takes the idea and come to the countries telling them that: “It is good for you”. Many countries in Africa, some transition countries (Albania, Mongolia) have adopted participatory budgeting. It is a bit difficult to do it in this way, because such changes should be a social initiative driven from the bottom. People in the city should really see the need of it. If some technocrats come and say that it is good for you, it will not work.

Nowadays we have a combination of the two approaches.  In Ukraine and in Norway it is a mixture of civil activists and experts. So it might be the third type of movement in the history of participatory budgeting.

Q|:City authorities decides what part of the budget could be given to the participatory projects. What are the figures? What part of the budget usually is given?

A: Very often it is small part – 1%. In Porto Alegre the budgeting council looks not only into the whole budget, but also they are particularly responsible for all investment projects. There are different peculiarities of investment projects, which should be taken into account. For example, if you construct 100 new schools, you also have to hire new teachers and other staff. It will increase your expenditure. These things should be coordinated. Participatory budgeting does not always consider long-term cost of investment projects: maintenance, running. The easiest way to organize participatory budgeting is when these projects do not involve huge future cost. It might be a park, sport facilities etc.

Q:Ukrainian cities only start to implement participatory budgeting. Do we need to make some legislation changes to start participatory budgeting?

A: As I told in Norway we have started from the wrong end. It depends on your legislation system. Sometimes you don’t need to change anything but it differs from one country to another.

Of course, you will have to change bylaws.

Very interesting is an experience of Porto Alegre where elected council also make participatory budgeting regulations, bylaws. They decided how this process should go. But all the rules are agreed before money comes.

Q: What are the side effects of participatory budgeting?

A: First of all the budgeting process becomes more transparent. The society could see where their money goes and they could participate in its distribution. Before participatory budgeting, the main part of the budget in Porto Allegre went to salaries and personal benefits. But when the process starts there is more pressure from the society that more money should be given for the investment, more money should be given to the participatory part. This increases the efficiency of the budget usage. The World Bank have noticed this side effect.

Sometimes with the help of different project you can involve inert social groups in the budgeting process. For instance, in one Brazil city there was huge premises in a port. Community decided to make culture center there with premises for rehearsal, exhibition sites etc. Usually, people of art are very social but they are far from politics, budget process. But in this case, they were involved. So this is the other side effect.

Participatory budgeting helps to improve civic education. This means that city authorities are not somewhere in remote places. Community takes part in this process and sees it from inside.

Participatory budgeting has much in common with trust. City authorities try to trust communities to run money. This process will not function without trust.

Q:What is the mechanism to control project money?

A: It depends on the model. If we go to more delegated model you give the money to more or less civil society. And you ask for a report. Or money might be divided into portions. You will receive another portion of money if you can provide a report. It is very typical in Scandinavian countries. In Porto Alegre there is different system. Citizens decide and municipality implements. So it is administrative responsibility. Recommendations come from the participatory budgeting council.

Q: You have told about positive side effects but are there any negative aspects? Are there any cases when participatory budgeting does not work?

A: If we are talking about public money, we can mention community elite. For example, you have a neighborhood association. There is a board committee there. Some people are for 10-15 years in leadership of this board. They can easily dominate the process. They can get the money to start to crash. They bring in their own family to run the crash as their business. This is a kind of nepotism. You have to watch out how money is used: if there is any kind of steeling, exploiting. If we are talking about the community it is not always positive things.

Q: Is Ukraine ready to participatory budgeting? There are only some cities in Ukraine where pilot projects started but participatory budgeting is not widely spread in Ukraine.

A: I am not very familiar with the situation in Ukraine, but there are polls, surveys, showing that people need more participation because, they feel that they are left aside the decision making process. I think participatory budgeting is possible everywhere. As I told there are different forms with different resources so you can adapt it to the local will.

Q: Usually in Ukraine all participatory budgeting projects concerns social sphere: park renovation, new benches, bus stop renovation. What projects are funded all over the world?

A: In participatory budgeting suits the best for the third sector. It is easier for people to cooperate and agree on social projects, because they can see and feel them.

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