Types ofParticipatory Budgeting Initiatives

164 Alta Fölscher

and the state.Civic engagement in local decision making occurs in a context in which citizens already have an understanding oftheir roles in local governance.In contrast,years ofcentrist communist rule in Central and Eastern Europe disempowered civil societies.An important contribution of participatory budgeting in that region may be building citizens’awareness oftheir rights and obligations.In Asia this “platform”ofawareness was already in place.

The Philippines offers a good example ofa country in which civil society’s role has developed along two mutually reinforcing paths.Before 1986 increasing centralization,graft,and lack ofresources left a vacuum in local service delivery,which civil society filled (Brillantes 2005).The overthrow of the Marcos regime in 1986 resulted in a constitution that provides a strong framework for civil society participation in the process ofgovernance.The constitution tasks the state to encourage NGOs that promote the welfare of the nation.It guarantees the right ofpeople’s organizations to effective participation at all levels ofsocial,political,and economic decision making. The Local Government Code provision translates this provision into explicit mechanisms for participation.NGOs are allocated a minimum ofone-quarter ofthe seats on local development councils,as well as seats on local pre-bid and awards committees,local health and school boards,and the local peace and order councils.

Governments in the Asian case study countries may also be better equipped to maximize the benefit from citizen-state partnerships than their counterparts in other regions.In Rajasthan,India,the state government has recognized the role communities can play in ensuring that public funds are used effectively:it is replicating the social audit methodology initiated by a CSO in other districts in the state.In the Thai cases and in Naga City in the Philippines,local governments have seen the potential in the national legal frameworks for participation and initiated participatory practices.

Types ofParticipatory Budgeting Initiatives

Very different types and levels ofcitizen engagement with public resource decisions and service delivery are referred to as “participatory budgeting.” Two broad types ofcitizen engagement can be distinguished based on the degree to which citizens enter the action space ofthe state in planning, allocating,and monitoring the use ofpublic resources.

In the first set ofparticipatory budgeting initiatives,citizens do not attempt to take over or partner with the state in these phases ofthe budget process.They undertake activities in the broader public domain that are

Participatory Budgeting in Asia 165

aimed primarily at improving the transparency ofgovernments’actions and the accountability ofstate actors.This type ofparticipation occurs within the boundaries ofrepresentative democracy:making public decisions is still the purview ofgovernment agencies and elected office holders.However, citizens do not take the bureaucratic effectiveness ofthese institutions for granted but undertake activities to bolster transparency and accountability. Put differently,these activities typically generate information on public policy and services outside ofthe state in order to influence what happens in the state.Activities in this broad category are usually initiated by NGOs.

In the second set ofinitiatives,citizens engage in the decision-making processes ofpublic agencies.Examples ofthis type,which could be seen as a form ofdirect democracy,can be observed throughout the budget process. In addition,the mechanisms deployed represent different intensities of participation,because governments have discretion over the degree ofaccess to traditional state-controlled action spaces they provide in setting up or taking over participatory mechanisms.McGee (2003) sets out four types of participation:information sharing,consultation,joint decision making,and initiation and control by stakeholders.As participatory practices move up this ladder,the argument goes,they become more effective instruments of participation:direct initiation and control by stakeholders are more powerful than joint decision making,which in turn is more powerful than consultation and information sharing.

Initiatives that Improve Transparency and Accountability Civil society achieves the first level ofengagement with the budget when it attempts to bring information on citizens’opinions and preferences to the attention ofsubnational governments or to initiate dialogue and influence public decision making through budget analysis.This level ofparticipation relies on the quality ofthe information needed to persuade decision makers to change development and funding priorities and to improve the quality of services.However,as Paul (2005a) argues,budget analysis and dissemination by skilled professionals are often aided when broad-based movements,or “people power,”get behind it.Paul emphasizes the need for coalitions ofdifferent types ofNGOs,including organizations that have broad-based membership.

Getting ordinary citizens involved requires that the analysis be easy to understand and relevant to the concerns ofaverage citizens.Participation can occur in a variety ofways,such as involving citizens in publicity campaigns and events or inviting them to express their preferences by voting on policy and service delivery issues.The involvement ofordinary citizens

166 Alta Fölscher

also strengthens civil society groups’efforts at monitoring and auditing public projects and services in a systematic way.

In all five case studies presented below,the NGOs use mechanisms for transparency and accountability to influence what happens within the state. They often bring important new information on public services into the public domain.They bring “people power”to bear on the accountability of elected representatives and public officials by drawing in ordinary citizens and coalitions ofNGOs.To do so,they make effective use ofthe media to reach citizens,legislators,and officials.They know how to capitalize on the aversion ofpublic figures to exposure.The organizations are inventive when it comes to translating technical information into ordinary terms and making what may seem distant relevant to people’s ordinary lives.

Paul (2005a) argues that programs like these can be successful only in societies that adhere to democratic governance,are open to public debate and criticism ofthose in authority,have relatively free media,and have independent NGOs in place.One could take this argument further to add that the quality ofdemocratic governance counts.Goetz and Gaventa (2001) emphasize the importance ofthe nature and organization ofthe political system in determining the level and quality ofparticipation.A CSO should be equipped with the expertise and resources to initiate a program to improve government effectiveness through various transparency and accountability mechanisms. Its efforts will not yield significant benefits,however,ifthe poli- tical system is rooted in the politics ofidentity,personality,and patronage.When issues of public policy get more play in voter preferences,politicians have less leeway to perpetuate behaviors that invite voter dissatisfaction.

In order to bring about change (or prevent deterioration ofservices), initiatives need to convey to state actors the implicit threat of“public accountability discomfort.”The more vibrant a country’s democratic governance and the more real the contest for political power,the more options there are for effective civil society participation.Electoral volatility and the degree to which the contest for political power is policy based are also enabling factors.Initiatives that work on the policy and allocation side ofthe budget process will find it much harder to deliver results in environments in which politics are not rooted in citizens’preferences for public goods and services.In such environments,initiatives that focus first on the implementation and service delivery side may have a greater chance of stirring voter dissatisfaction and therefore a higher chance ofimpact.An example is Bangladesh,where local government elections draw large voter turnouts and are hotly contested but local governments remain weak and unequal to the task ofdelivering effective services efficiently.

Participatory Budgeting in Asia 167

Ofthe four cases presented below,the participative auditing and score card methodologies deliver the most tangible results:redress and improved implementation ofservices and projects.Tangible impact is much harder to achieve in initiatives that focus on influencing the allocation offunds against priorities.Ofcourse,the voices ofcitizens and citizen groups compete with many others in policy and resource allocation processes.Even ifcitizens’ voices are heard in policy decisions,many linkages must occur through the budgeting and spending cycle for citizens’preferences to effect changes in spending.While analyses that expose such gaps may pressure officials, accountability is much harder to establish,particularly in an intergovernmental fiscal environment,and it occurs only over a long time.Moreover, governments (and citizens) are more likely to recognize citizens’right to hold government to account in implementing projects or programs than they are to allow them to have a say in policy and budgeting processes.That said,the dynamics of“accountability discomfort”should not be disregarded when trying to understand differences in effectiveness across locations in different political environments.

The Development Initiative for Social and Human Action (DISHA) in Gujarat State, India The Development Initiative for Social and Human Action (DISHA) is a local voluntary organization.Founded in 1985 as a trade union and a tribal welfare organization,DISHA aims to improve the living conditions ofthe large tribal populations in Gujarat.It created a unit,Pathey,to undertake budgetary analysis and advocacy work as a complement to its more activist campaigns.The strong membership base ofPathey’s parent organization lends weight to its engagement with public officials and elected representatives. Pathey also has access to outside economic and financial specialists.

Pathey analyzes issues in the state budget ofspecial relevance to poor tribal people.Comprehensive analysis is kept to a minimum and used to frame specific analyses,including analysis ofbudget allocations to the most relevant sectors (health,education) and the tracking ofspecific schemes that affect local people.Pathey also tracks expenditures on programs ofhigh relevance to its client population,through records in the field and interviews with beneficiaries.For example,Pathey tracks expenditures on critical programs through district budgets in order to determine whether specific purpose grants are used as required.

Pathey distributes its findings simultaneously to legislators and target population groups.At the outset,Pathey realized that ordinary people were not equipped to understand or use its rather technical analyses.It therefore

168 Alta Fölscher

built a network ofnongovernmental groups,including trade unions,to create a coalition for dialogue with the government.DISHA/Pathey also launched campaigns to inform and educate state legislators and officials on budget findings.Disseminating findings to the media helps reinforce DISHA/Pathey’s voice in the legislature and with officials.Pathey uses its district analyses to motivate local citizen groups and NGOs to meet with local authorities.

Surveys conducted by Pathey to measure its impact show that the target audiences welcome the organization’s work.In fact,a third ofthe people who receive material about the budget undertake follow-up action.Many ofPathey’s nongovernmental partners use the analysis to draw the government’s attention to specific issues.They see long-term value in the information.Members ofthe state legislature,political parties,and senior public servants make significant use ofPathey’s findings and suggestions (Paul 2005a;Wagle and Shah 2003).

Mazdoor Kisan Shakti Sangathan (MKSS) in Rajasthan, India Mazdoor Kisan Shakti Sangathan (MKSS),a union ofpeasants and workers in the Indian state ofRajasthan,uses another approach to stimulate citizen participation in budget processes.MKSS holds public hearings—or “social audits”—at which citizens discuss government expenditures on development in their communities.Citizens then hold public officials accountable for these funding decisions.

Typically,a social audit public hearing includes five stages.In the first stage,MKSS gathers all public agency documents,including cash books, wage rolls,and expenditure voucher files;project engineers’measurement books;and utilization certificates on development projects.Some ofthese documents are used to verify expenditures.

In the second stage,the information is organized into matrices that present technical information in terms that villagers are familiar with.(For example,volumes are expressed in terms ofcamel or bullock cartloads rather than tons.)

In the third stage,project staffmembers go house to house,distributing the information to villagers.Residents who have worked on sites provide feedback on whether the records appear accurate.In some cases,workers may identify discrepancies between information provided on wage rolls and what they actually earned. Villagers notice when wage rolls are inflated with the names offictitious or deceased people.This process can take as little as one week or as long as a few months.

The fourth stage ofthe process is the public hearing itself.Anticipation runs high.Public officials,local elected representatives,local media, and citizens attend the hearing,which is held in an open area in the village.

Participatory Budgeting in Asia 169

A panel ofrespected citizens oversees the proceedings,which are facilitated by MKSS project team members.Citizens are called to give testimony that may point to inefficient spending,poor planning,or corruption.The public officials responsible are given a chance to defend the projects.In some cases officials have admitted wrongdoing and paid back illegally obtained funds on the spot (Ramkumar and Krafchik 2005).In the last stage,MKSS prepares an official report,which is circulated to senior state officials,the media,and other civil society groups.

The initiative has had a significant impact.At the most basic level,it has mitigated corruption.But the full impact has been broader:the state government now requires that a social audit be held in every village every year.As part ofthe audit,all village residents must be given an opportunity to vote on a resolution verifying that the projects in their village were successfully completed. The state has passed a law on access to information.While this process has limitations,it represents a radical change in the institutional space provided to citizens to audit public funds (Ramkumar and Krafchik 2005).

Public Record ofOperations and Finance (PROOF) in Bangalore, India Public Record ofOperations and Finance (PROOF) is a local civil society coalition initiative to improve civic participation in budgetary processes at the city level in Bangalore,a city of6 million people and a hub ofIndia’s high-tech industries.PROOF aims to demystify the budget process and make budgets more accessible to citizens.It conducts periodic dialogues between the government and citizens on budget allocations,priorities,and performance.

The PROOF initiative occurred against the background ofthe modernization ofBangalore’s municipal financial management system,which resulted in reformed budget formats and timely reports on revenues and expenditures.The availability oftimely budget information was a major factor that stimulated the promoters ofPROOF to launch their campaign. Partners in the PROOF campaign brought complementary skills to the table: budget analysis,civic organization,capacity to establish state-civil society dialogues and communication,and community awareness building.

PROOF created a public forum for discussing the city budget on a quarterly basis,preceded and followed by more detailed investigations into specific aspects ofthe budget.Preparation for the first forum began with an information campaign to educate citizens about budgets in general. This exercise was necessary to encourage ordinary citizens to attend the public meeting.In the effort to increase citizens’economic literacy, PROOF held training seminars for citizens by qualified accountants and financial analysts.