Full Article: Participatory Budgetting...

Author(s): Willem Overbeke
Publication date: Wednesday 22 December 2004

I. What entails Participatory Budgeting (PB)?
II. Three forms of Participatory Budgeting
III. Some common ground in Participatory Budgeting efforts
IV. PRSP critique with an eye on Uganda
V. Important critical issues as regards Participatory Budgeting
VI. Participatory Budgeting, society building and HIVOS

I. What entails Participatory Budgeting?

a. Participatory budgeting in practice

Since participatory budgeting started in Porto Alegre around 1989 (when the Workers` Party won its first municipal elections in this state capital of Rio Grande do Sul), over 140 Brazilian cities and six states have implemented participatory budgeting in some form. In 2002 in Rio Grande do Sul, almost 400.000 citizen participated in participatory budget assemblies in the states 497 municipalities.

In practice Participatory Budgeting is a process in which citizens meet in open, public assemblies to decide which investments are most important to them locally and for the state as a whole. The meetings begin long before the legislative budget cycle, and occur in regional meetings and the thematic meetings throughout the state. After setting budget priorities, the participants elect regional delegates, who in turn elect state budget councillors. Both regional delegates and the state councillors continue to meet throughout the year to negotiate the final budget document. State planning officials use the priorities decided by the community, population size, and levels of need to allocate investments throughout the state. The state aggregates the municipal priorities to develop an annual investment and services plan included in the budget that is then passed through the state legislature and distributed to the budget delegates and councillors. In the following year, budget delegates receive a list of the investments and services planned and actually provided, allowing PB participants to evaluate government performance and directly question government officials in public assemblies.

b. A definition and some characteristics

”Participatory budgeting is a process of democratic and voluntary participation through which the citizenship decides in a direct way and in co-ordination with their government (s) on the allocation of public resources, that will be used by the government for the implementation of social policies/programmes and infrastructural works that drive (local) development”

(translated from Daniel Chavez, p. .)

• Process: i.e. no blueprints, no uniform models.
  Techniques and institutional frameworks still developing.
  
• Direct way: i.e. forms of direct democracy, as complimentary to representative democracy. But these also need certain institutions (conventions, assemblies, public fora, media, communication, etc.)
• With government(s): i.e. some conducive policy space is required (stakeholder approach, partnerships, etc.)
• Public resources: i.e. reflects civic engagement into economic policy making on social and material aspects of life.
• (Local) development: i.e. issues citizen can identify with.

c. An innovative expression of participatory development

According to Schneider and Goldfrank (2002) the rise of participation in the budget processes in particular on such a large scale as in Rio Grande do Sul, comes as something of a surprise to traditional thinking on both budgets and participatory democracy. They consider PB as an innovative public process in resource allocation priority setting and as the most prominent example of a lower class political project.

This sets PB apart from many previous a-political participatory development efforts, as PB goes beyond micro-projects and entails public processes where investment choices are being negotiated and substantial resources allocated for long term public good provision.

And most importantly, at the same time traditions of local direct/public democracy can and indeed are being built.

Therefor participatory budgeting as a political tool and public process has the potential to contribute to citizens’:
• Participation in (monitoring of) economic policy and public sector probity
• Civic education
• Economic literacy
• Self-confidence and assertiveness
• Voice & recognition
• Public and pro-poor basic services
• Conflict resolution, and thus social capital

All this makes it important to assess and follow the various strands of participatory budgeting processes (democratisation of urban economic planning in LA, gender budgeting and PRS proces) in their development accurately; as regards institutional settings, techniques and evolving practices. Including how these practices relate to issues like transparancy, accountability and media and information policies.

However, after first giving a short overview of three different forms of Participatory Budgeting, in the following I shall mainly focus upon participatory budgeting processes within the contested PEAP/PRSP model in Uganda. As from Uganda´s case being an early PRSP pilot country, there is still much to learn. [top]

II. Three forms of Participatory Budgeting

a. Initial impetus of PB in the ´90’ies from the democratization experiences in Latin America, that had to deal with economic reforms.

• Best known: Porto Alegre´s model, that started in 1989 and in 1998 spread to Rio Grande do Sur state (see Introduction).
• Since 2001 the World Social Forum has helped to spread the ideas and practices of PB worldwide, as democratic resistance to neo-liberalism through new urban political movements.
• Also the WSF fostered various new networks of academics, local authorities and citizen working on PB´s; interestingly also in Europe:
–Democratiser Radicalement la Democratie (DRD, France), 1998, 18 countries, International Observatory on PB.
–Forum of Local Authorities for Social Inclusion (FAL, Brazil), 2001, 1000 local authorities from 26 countries
–Network for the New Municipium (NNM, Italy), mayors, NGOs and local social forums working on PB.
• The high profile of Brazil´s Porto Alegre´s PB model has also raised considerable interest in various European countries: France (10 city cases), Germany (15-20, main reference Christchurch, NZ), Spain (12), Italy (20).

b. Gender Responsive Budgeting (GRB)

• GRB is a tool which is used to analyse budgets from a gender perspective. It considers how government policies and activities impact differently on men, women and other social groups in society, as budgets usually are “gender blind” and thus ignoring the different socially determined roles, responsibilities and capabilities of men and women.

• Gender Budget expenditure categories:
- Gender specific allocations, targeting a specific gender
(affirmative action funds, etc.)
- Allocations to achieve equity (f.i. in public service through training), or equality (pay, etc.)
- Mainstream allocations (gender disaggregated research needed).

• Half of 40 known GRB initiatives are in Commonwealth countries, with strong inputs from South Africa, Australia and UK.
- Public pressure (by civil society and research groups) is needed to enforce policy commitments of government.
- The commonly adopted analytical approach in GRB works best within broad stakeholder context.

• Example: FOWODE, Uganda
- FOWODE´s GBI is a collaborative effort between 5 different partners: Politicians/MP´s, Government Planners, Researchers, NGOs/CBOs and Media.
- The approach:
a. Gender situational analysis in a given sector;
b.Gender analysis of policy: assessment of how policy addresses the (gender) situation;
c. Gender analysis of budget: assessment of actual allocations against (intented) gender responsive policy;
d. Monitoring of progress in GRB.

c. Participation and Poverty Reduction Strategy Process

• Globally the most extensive and contested expression of participatory budgeting (in principle at least), is in the frame of a new focus upon pro-poor economic policy development through the WB/IMF initiated PRS processes, that started around 2000.

• In ´90’ies, the experiences in macro economic policy development (in particular in LA) also pushed the WB/IMF towards more citizen participation in national economic strategy making, i.e. their Comprehensive Development Framework.

• In 1999 the IFI´s increased their debt relief allocation for poor countries under the HIPC (per capita income)
• Critical condition under HIPC became: Poverty Reduction Strategy Paper (PRSP)–A National Development Plan, initiated by national government–With targets for: a. macro economic stability; b. economic growth and c. social sectors/poverty policy.
• Main principles PRSP–The PRSPs are supposed to be “locally generated” and “owned” by a partnership of government working together with civil society organizations, seeking local solutions–Covering the entire process: problem definition/identification, priorisation of problems & goals, strategy formulation, indicators for M&E.–Shared priorisation between government and society
• PRSP process–Poverty analysis based upon research/correct data & indicators–Participation of society in monitoring of poverty reduction (strategies & budgets)–In 2003: 77 low income countries under HIPC, with 45 long term PRSPs and 21 interim PRSPs.
• Overall experience with the PRSP now exists for four years and the debate about its relevance is becoming more intense by the year, with a fast increasing number of evaluative and critical studies [1].In Netherlands also the ISS is involved in PRSP monitoring through an agreement with SIDA for the evaluation of three PRSPs (2003-2007) in Latin America (Bolivia, Honduras, Nicaragua). [top]

III. Some common ground in Participatory Budgeting efforts

• After the collapse of communism initially a dramatic increase in number of formal democracies.
• Almost immediately followed by a growing realism as regards many “democracy deficits” within liberal representative democracy. In particular under conditions of unequality, conflict and/or poverty. [2] Questions/issues arose like:–Meaning of democracy (“institutions” vs. “politics”)?–Extent/depth of democracy?–Conflict resolution effectiveness of democracy?–Democracy and globalization/transnational corporations?
• The ´90’ies democratization experiences in Latin America and the gender movement contributed to a new wave of democratization. With participation as a core component of good governance, in particular in economic policy making.
• Concurrently macro-economic policy making moved from being an exclusive/secretive planning activity towards more inclusiveness of ownership by interest groups (civil society and private sector).
• In the late ´90’ies the IFI´s followed suit with their Comprehensive Development Framework, elaborating good governance principles in economic policy strategy: accountability, transparency, rule of law, participation/citizen voice.
• In short, common ground of PBs:–Broad general awareness of democracy deficits–Recognition of need for more inclusiveness in economic policy making–New shift from democratic “institutions” towards democratic “politics”–New social movements (gender, rights based approach) expanded conception of democratic citizenship & rights. [top]

IV. PRSP critique with an eye on Uganda

In the PRSP consultative process the principle of participation in macro-economic policy has gotten some recognition and a toehold in some settings. For instance in the case of Uganda, which national Poverty Eradication Action Plan (PEAP, since 1995) was approved as PRSP by WB/IMF in 2001. However since then, both the Ugandan liberalisation led-growth development model and its recent pro-poor PEAP/PRSP addition, have come under increased criticism, by various civil society groups and concerned scholars.As regards Uganda´s development model, because of its uncertain path towards unambigious democratic political competition in combination with worrying macro-economic trends since 2000 (see Kintu/Overbeke, 2004). And as regards PEAP/PRSP, because so far it has been impossible to include macro-economic policies and the WB/IMF structural adjustment recipes in the discussions between CSO and other stakeholders in the PRSP process.PRSP deliberations are mainly limited to economic and budgetary aspects of policy development for “soft policy areas”, like health and education. Consequently the pro-poor economic strategy of PRSPs is not comprehensive and in practice diverting attention away from critical macro-economic policy issues, like f.i. fiscal and monetary policy, privatization, trade policy, land reform, labor policy, foreign and domestic investment policy, that indirectly or directly also impact on the poor.And it are precisely above macro-economic policy issues that play dominant roles in other economic-financial support instruments (like PRGF, PRSC)) and institutional arrangements (CPIA ratings) that exist between WB/IMF and the borrowing countries, within the structural adjusment framework.The reasons why sofar macro-economic and structural policy discussions are “forbidden areas” in PRSP consultations are complicated, as they also should be understood in the macro-context of an unequal balance of power between borrowing countries and creditor donors, causing asymetrical relationships and unconducive attitudes.However, more specifically they have to do with:

• reluctance from the side of WB/IMF, because of certain information disclosure policies as regards aspects of their general country assessments.
• unclear accountability within the PRSP frame as regards the primary responsibility for bringing macro-economic policies to the table.
• lack of capacity to analyse and formulate macro-economic policy at the side of various stakeholders (CS, the legislative) in borrowing countries. [3]
• reluctance and/or self-censorship from the side of borrowing governments, that don´t want to play with their macro-economic credentials and credit status.
• lack of formal democratic overside of and effective parliamentary involvement in the PRSP process in the borrowing countries [4].

Finally, despite above concerns, an earlier PANOS study also listed a number of achievements as a result of the Ugandan PEAP/PRSP process itself, including:
• Poverty is being redefined – powerlessness and voicelessness have emerged as dimensions of poverty.
• Consultation has often been channelled through or led by an umbrella organisation. This has strengthened information sharing and debate among civil society organisations, and has enhanced their advocacy capacity.
• Many organisations have learned fast and developed approaches to monitoring implementation – the crucial next stage, when outcome more than process will count.
• The concerns of poor people are more likely to be voiced and heard because official attitudes to CSOs have improved and civil society is now more able to contribute to political analysis.
• There has been a new government openness – making documents available, evenmacroeconomic and budget information – even if CSOs have not been invited or had the capacity to engage in dialogue at this level. [top]

V. Important critical issues as regards Participatory Budgeting

• Who participates?–Elected citizen volunteers?: high opportunity costs and risk of systematic self-selection (usually women and the poor are disadvantaged).–Non-elected civil society representatives?: not democratic and not “representative” and also not necessarily pro-poor (e.g. Gender budgeting)–Which interest groups/social partners: from labour unions, producers associations, civil society?The question “who participates”, is usually not much regulated, but also direct democracy needs regulated public spaces, i.e. certain institutions.
• Representative democracy (Parliament) versus Civil Society?–The role of CSOs in the PRSP process has raised important new questions such as: what role should civil society play in policy formulation in relation to parliamentarians, local governments and national government agencies?–PRSP aims at civil society-donor-executive branch interaction, which thusfar seriously has neglected a central actor from political discourse, i.e. Parliament/the legislative branch. However, under the recently created Parliamentary Network on the World Bank (PNoWB), the WB is trying to accomodate the increasing interest of parliamentarians in IMF/WB policies .[5] CSOs thus ought to consider how to engage more with their MP´s on monitoring PRSP and debating macro-economic and structural adjustment policies.–What have the public consultations for drafting PRSPs done for the formal democratic debate and processes within countries? [6]–Are weak and clientalistic legislatures only a temporary hindrance for pro-poor spending and should, under conditions of scarce resources, thus not be given priority to strengthening democratic institutions in the first place(o.a. political parties and parliament)?
• As according to Bräutigam (2004), a conducive institutional framework for pro-poor spending has the following characteristics:–Pro-poor spending is usually initiated by relatively strong democratic and ideological left-of-center political parties.–By governments with effective auditing and transparency.–Which had also institutions (media, internet, public meetings, pamphlets) that enabled information dissimination to build accountability.
• And, what about the private sector and revenues (e.g. tax reform)?–In PB and PRSP the private sector sometimes takes a very backseat.–Chile´s tax reform and convenant with private sector realized revenues/taxation for sustainable pro-poor budgets/spending in a democracy.
• Lastly, specifically as regards PRSP. Pro-poor and social spending, although desirable as such, improbably can make an effective dent into poverty if cut loose of macro-economic policy design. This supposes a deepening and widening of the PRSP process, to make it really comprehensive:–all macro-economic aspects of economic development (models) to be brought into the PRSP frame;–the enhancement of macro-economic analytical skills (for various stakeholders) is needed to increase ownership in macro-economic frameworks–contextualized and nationally adjusted alternatives to “structural adjustment” to become possible–PRSPs can only become more nationally owned if they are effectively communicated with the general public through media and communication institutions (ICT!) [top]

VI. Participatory Budgeting, society building and HIVOS

Outline for a way forwardParticipatory budgeting is a political participatory development tool and policy theme with strong potentials to contribute to democratic society building as perceived by HIVOS. As it:–Entails civil society participation in multiple spheres (from local to global)–Is based upon alliances that should capitalise on expertise in pro-poor economic policy–Has a scope of engagement beyond NGOs (executive, legislative, movements, private sector)–Links cross-cutting issues within a pro-poor framework (gender, corruption)–Information & communication (ICT) policies and media strategies are paramount–Promotes domestic accountability and civic awareness through public engagement–Provides knowledge sharing opportunities to strengthen South-South/East and North-South engagements. In particular to bring African experiences on the global stage and relate them more with the ongoing PB experiences in Latin America.

• Points for further strategy discussion

1. A critical challenge as regards sustainable society building in transitional and weak democracies, is the struggle for conducive engagement and interaction between forms of direct/participatory democracy and the evolving institutions of representative democracy (both the legislative and the executive).–This would assume policies that challenge both civil society and government institutions.–As the challenges for civil society are to become more representative and accountable.–While at the same time democratic institutions should become more inclusive, transparant and pro-poor effective.–This would also assume pro-active HIVOS policies that go beyond civil society as the sole locus of institutional partnerships (see Outline for a way forward).–Participatory budgeting could thus provide a strategic policy theme to contribute to democratic political and economic development in transitional and weak democracies.
2. Next?

[1] To mention just a few: ODI (2001), World Vision (2001), Ibis, World Bank (2002), Nyamugaisra/Rowden (2002), PANOS (2002), AIV (2003), SAPRIN (2003), Church of Sweden (2003), IDS/UN. Helsinki (2003), ISS (2003). See in particular also: ActionAid USA & Action Aid Uganda (2004).
[2] See Annex 1 and in particular the book “Can Democracy Be Designed? The politics of Institutional Choice in Conflict-Torn Societies”.
[3]And probably also at the donor side, as the final patent on just macro-economic development has certainly not yet been granted. Which makes it even the more remarkable why in essence IFI macro-economic policy is still such a straightjacket, while more contextualised and nationally adjusted (and thus nationally-owned) macro-economic policies are much needed, to reflect individual national solutions.
[4]Within the limited purpose of this paper, at present it will not be possible to go deeper into above issues, they should however be seen and further analysed within the framework of democracy and accountability deficits (including civil society strategies on how to resolve them) in transitional societies. Like the analytical framework presented in Annex 1, as deducted from the research project Democratic Transition in Conflict-Torn Societies.
[5]The PNoWB´s chairman is Dutch Parliamentarian Bert Koenders and PNoWB´s ongoing operations mainly include education for MP´s are funded by Finland and the Netherlands. The network is formally independent of the WB and became registered in France in 2003. A chapter has been established in East Africa, such as to study the preparation of World Bank´s CASs in Kenya.
[6]In their empirical study on the Tanzanian PRSP process, one of Gould & Ojanen´s conclusions is: that “the constitutional system of representative democracy upon which Tanzania’s political system is nominally based is undermined from both above and below without providing a viable alternative mechanism for citizen oversight of government and donor actions. The modalities of policy processes introduced or reined under the auspices of the PRSP have, in part, exacerbated this problem

This discussion paper is based upon a lecture in the HIVOS Lunch and Learn Lecture Series, The Hague, Nov. 18, 2004. HIVOS at present is involved in an institutional re-positioning process, which a.o. things aims at a further strengthening of its policies with respect to society building and the role of civil society in democratic and inclusive development. Within this perspective also a partnership between the Institute for Social Studies (ISS) and HIVOS was recently established.
Based upon his recent work for HIVOS in Uganda, the author provides this draft working paper as a contribution to stimulate further discussion on the relevance and practice of Participatory Budgeting as a political participatory approach for pro-poor economic policy development in transitional and weak democracies.
Reactions to the paper are welcome at: Overbeke@ctv.es, or you can submit a comment at the bottom of this page.

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