How participatory budgeting promotes citizen engagement: Insights from emerging economies

More than ever there is a need for citizens and communities to be actively engaged in the democratic process, and in particular, by becoming involved with spending decisions made by local government authorities. In this light, participatory budgeting (PB), which originated in Porto Alegre Council in Brazil, has become a globally spread practice where members of a community (e.g. village, town or borough) are engaged in a process of making resource distribution and service provision decisions by the local governments (Falanga and Lüchmann, 2020).

PB goes well beyond the typical consultation exercise and can involve decisions about a portion of the authority’s annual spending or of its investment budget. The process normally entails a series of events and round table discussions where individuals and groups from target communities negotiate and agree with elected and local government officials to commit funds on activities and projects they believe will improve public services. PB has been welcomed by most policy-makers, politicians, officials, development professionals, community members and local organisations given its ability to embed ‘pro-poor’, equitable, democratic and inclusive approaches to the allocation of public resources. However, paradoxically, its implementation and efficacy in many countries (see e.g. Uddin et al. (2019) for Japan; Kuruppu et al. (2016) for Sri Lanka; and Jayasinghe et al. (2020) for Indonesia) are seen to be limited in scope or lacking in dynamism. So, questions remain as to why this is happening and how PB could be made more effective in communities?

A study funded by the World Bank’s Public Expenditure and Financial Accountability (PEFA) Secretariat, and led by a team of academics from the Universities of Guelph and Essex (Lassou et al., 2021), explored how participatory budgeting (PB) is deployed in an African local government setting (Benin). International agencies sought to promote the development of PB process in local municipalities to support the delivery of public services, particularly in primary health. Our findings from the field reveal an enthusiasm amongst communities, with the support of grassroots organisations and the political will/interest at the local level, to engage in a process of deliberating, evaluating and negotiating how funds should be spent. Through this process, local politicians and municipal officials also become more ‘visible’ and more accountable to their constituencies. One distinct finding is how local organisations and communities see PB as a way to promote the need for individuals to pay their local taxes or to consider how in-kind resources could be mobilized to address community demands; which otherwise would not have materialised. Therefore, PB enables democracy to be put in practice by providing voice and space to the constituencies while highlighting their responsibilities as taxpayers, by helping to identify what matters at the local level and by ensuring decision-makers engage more constructively with the citizenry.

At the same time, challenges do emerge, notably in relation to the limited participation of remotely located communities and disadvantaged groups (e.g. women; people with disabilities), attempts by some political and elite groups to influence the outcomes and pressures to complete the PB process without enough time to gather deeper engagement. Furthermore, there are bureaucratic central government rules which limit how (or on what) to spend funds and some of the funds meant for the PB exercise have not been allocated at the outset, leading to a lack of project implementation. In addition, many PB experiments were supported by donor funding and once the support ended, the PB exercise essentially lapsed. Some of these issues, which effectively lead to a disenfranchised community, have also been highlighted in studies of other emerging economies by members of the research team, namely in Indonesia and Sri Lanka.

As a result of our research work, a number of recommendations were discussed with local stakeholders (December 2020) in Benin and thereafter formally presented them to international policy-makers and development agencies during a PEFA Webinar on 3 May 2021. Some of the key speakers opined:

"PB enabled the social contract between the citizens and the state, including it could create incentives to pay taxes for better service delivery. In Benin, PB had also provided an important forum for citizens to express their priorities on PFM (Public Financial Management) that used to be confined to PFM experts" (Rosmarie Schlup, State Secretariat for Economic Affairs, Switzerland).

The Senior Public Sector Specialist Saidou Diop from the World Bank also called for greater use of PB for improved voluntary compliance of taxes and improved public investments. Finally, Mr Jacky Barboza from GIZ (a German development agency) states: "This study is timely and is the first of the kind since we have been operationalizing participatory budgeting in Benin. It is crucial for us as development partner engaged in the area to learn through the study how this public finance tool is impacting communities and empowering them in the formulation of remedies to their needs, which I think is more sustainable..."

Our key recommendations focus on the local/regional, national and international aspects, namely (i) to ensure the communities can reflect on the service delivery of previous PB-decided projects and thus develop experience about the viability of future projects, (ii) to associate the PB process to existing community or traditional gatherings to ensure sustainable participation, (iii) pool the experiences achieved so far to develop national guidelines for the deployment of a meaningful PB process in local government and commit funds in advance, and (iv) to ensure that international assessments of public sector accounting practice and of democratic systems address the extent to which countries engage with the PB process.

In conclusion, we see participatory budgeting as being part of the step change in democratic reforms and citizen engagement that are required to ensure local governments can be truly accountable and effective. Although our work was in the context of emerging economies, we note its resonance and relevance to all local government contexts.