Local Budgeting

Participatory Budgeting in Central and Eastern Europe 129

economic,social,cultural,and political lives were largely directed from the center,with implementation through local offices ofthe central state.The role ofthe state was pervasive and prescriptive,and freedom ofassociation and access to information were limited.The state provided citizens with a range of goods and services,but citizens had little control over which services were provided and at what level and quality.Ordinary people were passive receivers ofpublic goods.This affected the local government environment,citizen attitudes toward the state and service provision,and the size,nature,and depth of organized civil society.

With the collapse ofthe Soviet Union,the structure ofcentral-local intergovernmental relations and state-citizen relationships changed.States passed new constitutions providing for autonomous local governments.Constitutional change was often followed by development ofthe legislative framework at the national,state,and local levels ofdecision making to provide for an independent level oflocal government and for citizen participation.At the same time,Western countries,multilateral institutions,and international NGOs extended development aid and undertook democratization activities in the region.These activities influenced the development discourse.

The history ofthe region means that participatory budgeting initiatives operate in contexts characterized by the following conditions:

Citizens have historically been detached from decisions that affect them,are mistrustful ofcollective action,and are passive receivers ofpublic services. Collective forms ofpolitical and social organization,such as political parties and civil society organizations (CSOs),are relatively new,as is an elected,independent,and autonomous local level ofgovernment. Intergovernmental fiscal relations systems are still being developed;roles and responsibilities are weakly and ambiguously assigned to local levels. The expenditure responsibilities oflocal governments do not match their revenue capacity,and transfers from upper levels are nontransparent and unreliable. Local governments have insufficient authority to make decisions and often are still developing the capacity to use resources effectively and efficiently to solve local problems. Citizens are dissatisfied with local services but do not believe that they can affect them or that local governments are able to do anything to alleviate or solve problems.

The literature on participatory budgeting highlights the need for capacity on both sides ofthe equation (governments and citizens) in order to achieve