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Participatory budgeting produces impressive results, under the right circumstances.

Participatory budgeting increases public participation in the process of public decision making, increases local tax revenues collection, channels larger fractions of public budgets to services stated as top priorities by citizens, and increases satisfaction levels with public services, according to a study from the Inter-American Development Bank. These effects, however, were found only when the model was implemented in already-mature administratively and politically decentralized local governments. The findings highlight the importance of initial conditions with respect to the decentralization context for the success of participatory governance--in other words, how robust the city's institutional setting may be.

The desirable outcomes are at risk if too many other new civic initiatives compete with the introduction of the participatory budgeting process and if implementation of the process is not adequately supported by training and technical assistance for the city staff, according to the paper, which is billed as the first experimental evaluation of the participatory budgeting model. Combining reforms such as administrative, fiscal, and political decentralization together with participatory budgeting appears to diminish the potential the latter can have when implemented in already-mature decentralized local governments. Dedicating staff to the support of the process increases the likelihood of success.

According to the paper, the following pattern of citizen engagement around the budget process helps create measureable improvements in tax collection and satisfaction scores:

* The yearly cycle is initiated with a community meeting where citizens express their demands and priorities for public service delivery. These priorities are tracked through specially designed report cards.

* After processing this information, local authorities and citizen delegates generate an initial budgetary proposal, which is presented and discussed in a second community meeting. In this meeting, further discussions are conducted to ensure that citizens' priorities are reflected to an appropriate degree in the budget.

* Using the feedback obtained from both community meetings, local authorities and citizen delegates formulate a final budget that must be approved by the local council in a third community meeting or budgetary hearing.

* After budget approval, a fourth community meeting is organized to delineate the service improvement action plan associated with the approved budget.

* Citizen delegates and local authorities monitor the execution of the budget using the performance management indicators contained in the service improvement action plan and a monitoring community meeting is organized halfway through the annual budget execution.

* Another community meeting is organized at the end of the annual budget execution in order to report the progress to citizens. Then the annual cycle starts again.

The research found that annual local tax revenue collection per capita increased by $37.34 (78 percent) over the control group mean. The level of preference matching between citizens and authorities increased by 29 percent; and annual public expenditures per capita in the top priority services for citizens increased by $29.8 (177 percent), and the level of public services satisfaction index by 0.37 standard deviations over the control group zero mean.

The study, "Does Participatory Budgeting Improve Decentralized Public Service Delivery?" is available at
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Title Annotation:News & Numbers
Publication:Government Finance Review
Geographic Code:1USA
Date:Dec 1, 2015
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