PUBLIC SECTOR
GOVERNANCE AND
ACCOUNTABILITY SERIES

PARTICIPATORY 39498

BUDGETING

Edited by ANWAR SHAH

PARTICIPATORY
BUDGETING

Introduction to the Public Sector Governance and Accountability Series

Anwar Shah, Series Editor

A well-functioning public sector that delivers quality public services consistent with citizen pref-
erences and that fosters private market-led growth while managing fiscal resources prudently is
considered critical to the World Bank's mission of poverty alleviation and the achievement of
the Millennium Development Goals. This important new series aims to advance those objec-
tives by disseminating conceptual guidance and lessons from practices and by facilitating
learning from each others' experiences on ideas and practices that promote responsive (by
matching public services with citizens'preferences),responsible (through efficiency and equity
in service provision without undue fiscal and social risk), and accountable (to citizens for all
actions) public governance in developing countries.
This series represents a response to several independent evaluations in recent years that
have argued that development practitioners and policy makers dealing with public sector
reforms in developing countries and, indeed, anyone with a concern for effective public gov-
ernance could benefit from a synthesis of newer perspectives on public sector reforms. This
series distills current wisdom and presents tools of analysis for improving the efficiency,
equity, and efficacy of the public sector. Leading public policy experts and practitioners have
contributed to this series.
The first 14 volumes in this series, listed below, are concerned with public sector
accountability for prudent fiscal management; efficiency,equity,and integrity in public service
provision; safeguards for the protection of the poor, women, minorities, and other dis-
advantaged groups; ways of strengthening institutional arrangements for voice, choice, and
exit; means of ensuring public financial accountability for integrity and results; methods of
evaluating public sector programs,fiscal federalism,and local finances; international practices
in local governance; and a framework for responsive and accountable governance.

Fiscal Management Budgeting and Budgetary Institutions

Public Services Delivery Local Budgeting

Public Expenditure Analysis Local Public Financial Management

Local Governance in Industrial Countries Performance Accountability and
Combating Corruption
Local Governance in Developing
Countries Tools for Public Sector Evaluations

Intergovernmental Fiscal Transfers: Macrofederalism and Local Finances
Principles and Practice Citizen-Centered Governance
Participatory Budgeting

PUBLIC SECTOR
GOVERNANCE AND
ACCOUNTABILITY SERIES

PARTICIPATORY
BUDGETING

Edited by ANWAR SHAH

THE WORLD BANK
Washington, D.C.

�2007 The International Bank for Reconstruction and Development / The World Bank
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ISBN-10: 0-8213-6923-7
ISBN-13: 978-0-8213-6923-4
eISBN-10: 0-8213-6924-5
eISBN-13: 978-0-8213-6924-1
DOI: 10.1596/978-0-8213-6923-4

Library of Congress Cataloging-in-Publication Data
Participatory budgeting / edited by Anwar Shah.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-8213-6923-4
ISBN-10: 0-8213-6923-7
ISBN-10: 0-8213-6924-5 (electronic)
1. Local budgets�Citizen participation�Case studies. 2. Local finance�Case studies.
I. Shah, Anwar.

HJ9111.P37 2007
352.4'8214�dc22
2006032525

Contents

Foreword xiii

Preface xv

Acknowledgments xvii

Contributors xix

Abbreviations and Acronyms xxiii

Overview 1
Anwar Shah

Part I Introduction to Participatory
Budgeting

CHAPTER

1
A Guide to Participatory Budgeting 21
Brian Wampler
History of Participatory Budgeting 23
How and Where Does Participatory Budgeting Work? 24
State of the Debate 32
Types of Participatory Budgeting Programs 36

vi Contents

Actors and Motivations for Embracing
Participatory Budgeting 39
Administrative Reform 44
Limitations of Participatory Budgeting 45
How and Where Can Participatory Budgeting
Be Implemented? 47
Policy Implications 49
References 53

2 Citizen Participation in Budgeting: Prospects for
Developing Countries 55
Donald P. Moynihan
Why Is Participation Important? 55
Fostering Broad and Meaningful Participation in
Developing Countries 62
The Government's Perspective on Public Participation 78
Conclusions 83
Notes 83
References 83

Part II Regional Surveys

3 Lessons from Latin America's Experience with
Participatory Budgeting 91
Benjamin Goldfrank
History of Participatory Budgeting 92
Normative and Analytical Approaches to Participatory
Budgeting 94
National Case Studies 101
Conclusions 116
Notes 119
References 121

4 Participatory Budgeting in Central and
Eastern Europe 127
Alta F�lscher
The Central and Eastern European Context 128
Case Studies of Participatory Budgeting 134

Contentsvii

Conclusions and Lessons Learned 143
Annex: Achievements, Challenges, and Lessons from
Participatory Budgeting Processes in Case Study
Countries 148
Note 155
References 155

5
Participatory Budgeting in Asia 157
Alta F�lscher
How Can Citizen Participation Enhance
Development? 158
The Asian Context 159
Types of Participatory Budgeting Initiatives 164
Lessons from the Asian Experience 179
Conclusions 187
Notes 188
References 188

6 Sub-Saharan Africa's Experience with
Participatory Budgeting 191
Adrienne Shall
Legal Framework, Mechanisms for Participation, and
Impact of Participatory Budgeting 192
Challenges and Lessons Learned 216
Conclusions 221
Notes 222
References 222

7 Participatory Budgeting in the Middle East and
North Africa 225
Alta F�lscher
Potential for Participatory Budgeting 225
Democracy and Islamic Rules and Values 237
Notes 240
References 240

viii Contents

Appendix: A Primer on Effective Participation 243
Alta F�lscher
Citizen Participation and State Effectiveness 243
Types of Participation 246
Preconditions and Enabling Factors for Citizen Engagement with
Public Decisions 247
References 255

Index 257

On CD ROM
Part III Country Case Studies on Civic
Participation in Subnational Budgeting
Bangladesh: Civic Participation in Subnational
Budgeting 1
Atiur Rahman, Mahfuz Kabir, and Mohammad A. Razzaque
Civic Participation in Subnational Budgeting 3
Capacity Building to Support Civic Participation 18
Conclusion 22
Annex 1: I-PRSP's Medium-Term Agenda to Enhance Civic
Participation in Local Governance 23
Annex 2: Internal Sources of Revenue of LGIs 24
References 27
Abbreviations 29

India: Civic Participation in Subnational Budgeting 31
Samuel Paul
The Three Levels of Government in India 32
Case Study 1: DISHA, Participation in State-Level
Budgeting 33
Case Study 2: PROOF, a Citizen's Forum for Monitoring
City Budgets 38
Lessons Learned 43
Capacity Building for Civic Participation 45

Contents ix

Annex: DISHA Budget Briefs Provided to Legislators,
1997�98 47
References 48

The Philippines: Civic Participation in Local
Governance--Focus on Subnational Budgeting
and Planning 49
Alex B. Brillantes, Jr.
Context of Civil Society Participation in Local Governance 50
Civil Society Participation in Subnational Planning 53
Participatory Budgeting Framework 58
References 65

Russia: Civic Participation in Subnational Budgeting 67
Elena Krylova
National Framework: Local Government and
Budgeting 67
Civil Participation Experiences in Budgeting Process 72

South Africa: Civic Participation in Local Government
Policy Making and Budget Processes 91
Adrienne Shall
Participation Approaches 93
Mangaung Case Study 101
Ekurhuleni Case Study 109
National Framework 114
Conclusion 122
References 125

Thailand: Civic Participation in Subnational
Budgeting 127
Charas Suwanmala
Local Service Responsibilities 128
Local Revenues 128
Local Budgeting 129
Summary of Case Studies 130
Building Knowledge 143
Recommendations 151
Abbreviations and Acronyms 154

x Contents

Ukraine: Civic Participation in Subnational
Budgeting 155
Elena Krylova
General Framework 155
Citizen Participation in Local Budget Process in Ukraine 163
Capacity Building to Support Civic Participation 170
Annex 1: Government System Levels 176
Annex 2: Local Self-Governance System 177
References 178

BOXES

4.1 The Bulgarian Legal Framework for Citizen Participation
in Local Self-Government 131
7.1 Think Tanks in the Arab World 230

FIGURES

1.1 Annual Participatory Budgeting Cycle 29
2.1 Participatory Budgeting Process in Porto Alegre, Brazil 67
2.2 Citizen Satisfaction with Government Services in Bangalore,
1994�2003 78
2.3 Administrative Costs and Instrumental Benefits
of Participation 81
A.1 State Attitude toward Citizen Voice and
Effective Participation 250

TABLES

1.1 Desired Outcomes and Unintended Consequences of
Participatory Budgeting 27
1.2 Roles of Government and Participants during the First Round of
the Participatory Budgeting Process (March�June) 29
1.3 Roles of Government and Participants during the Second Round
of the Participatory Budgeting Process (July�November) 30
1.4 Roles of Government and Participants during Project
Implementation 31
1.5 Number of Participants in Participatory Budgeting Processes
in Selected Cities in Brazil, 1990�2003 33
1.6 Frequency of Participation in Participatory Budgeting
in Belo Horizonte and Betim, Brazil 34
2.1 Typology of Citizen Participation 62

Contents xi

3.1 Characteristics of Case Study Municipalities in Bolivia,
Guatemala, Nicaragua, and Peru 113
3.2 Key Aspects of Institutional Design and Measures of Success of
Participatory Budgeting in Case Study Municipalities 115
4A.1 Achievements of and Lessons from Citizen Participation in
Central and Eastern Europe 148
5.1 Constitutional and Legal Provisions for Decentralization and
Participation in Bangladesh, India, Indonesia, the Philippines,
and Thailand 160
6.1 Budget Cycle for Subnational Governments in Kenya 206
6.2 Budget Process in Mangaung, South Africa 208
6.3 Budget Process for Subnational Governments in Tanzania 209
6.4 Budget Process for Subnational Governments in Uganda 210
6.5 Budget Process in Kabwe, Zambia 211
6.6 Budget Process in Gweru, Zimbabwe 212

Foreword

In Western democracies, systems of checks and balances built into
government structures have formed the core of good governance
and have helped empower citizens for more than two hundred years.
The incentives that motivate public servants and policy makers--
therewardsandsanctionslinkedtoresultsthathelpshapepublicsector
performance--are rooted in a country's accountability frameworks.
Sound public sector management and government spending help
determine the course of economic development and social equity,
especially for the poor and other disadvantaged groups, such as
women and the elderly.
Many developing countries, however, continue to suffer from
unsatisfactory and often dysfunctional governance systems that
include rent seeking and malfeasance, inappropriate allocation of
resources, inefficient revenue systems, and weak delivery of vital
public services.Such poor governance leads to unwelcome outcomes
for access to public services by the poor and other disadvantaged
members of society, such as women, children, and minorities. In
dealing with these concerns, the development assistance community
in general and the World Bank in particular are continuously striving
to learn lessons from practices around the world to achieve a better
understanding of what works and what does not work in improving
public sector governance, especially with respect to combating cor-
ruption and making services work for poor people.
The Public Sector Governance and Accountability Series
advances our knowledge by providing tools and lessons from practices
in improving the efficiency and equity of public services provision and
strengthening institutions of accountability in governance. The series

xiii

xiv Foreword

highlights frameworks to create incentive environments and pressures for
good governance from within and beyond governments. It outlines institu-
tional mechanisms to empower citizens to demand accountability for results
from their governments. It provides practical guidance on managing for
results and prudent fiscal management. It outlines approaches to dealing
with corruption and malfeasance. It provides conceptual and practical guid-
ance on alternative service delivery frameworks for extending the reach and
access of public services. The series also covers safeguards for the protection
of the poor, women, minorities, and other disadvantaged groups; ways of
strengthening institutional arrangements for voice and exit; methods of
evaluating public sector programs; frameworks for responsive and account-
able governance; and fiscal federalism and local governance.
This series will be of interest to public officials, development practi-
tioners, students of development, and those interested in public governance
in developing countries.

Frannie A. L�autier
Vice President
World Bank Institute

Preface

Participatory budgeting has been advanced by budget practitioners
and academics as an important tool for inclusive and accountable
governance and has been implemented in various forms in many
developing countries around the globe. Through participatory
budgeting, citizens have the opportunity to gain firsthand knowl-
edge of government operations, influence government policies, and
hold government to account. However, participatory processes also
run the risk of capture by interest groups. Captured processes may
continue to promote elitism in government decision making.
This book provides an overview of the principles underlying
participatory budgeting. It analyzes the merits and demerits of par-
ticipatory budgeting practices around the world with a view to
guiding policy makers and practitioners on improving such prac-
tices in the interest of inclusive governance. This publication
includes five regional surveys, and seven country case studies can
be found on the accompanying CD ROM.
Participatory Budgeting advances the World Bank Institute
agenda on knowledge sharing and learning from cross-country
experiences in reforming public governance. It is intended to assist
policy makers and practitioners in developing countries in making
more-informed choices.

Roumeen Islam
Manager, Poverty Reduction and Economic Management
World Bank Institute

Acknowledgments

This book brings together learning modules on participatory bud-
geting prepared for the World Bank Institute learning programs
directed by the editor over the past three years. These learning mod-
ules were primarily financed by the government of the Netherlands
under the Bank-Netherlands Partnership Program.The government
of Sweden,throughitsPublicExpenditureManagementandFinancial
Accountability Partnership Program with the World Bank, directed
by the editor, provided financial support for the publication of
this book.
The volume has benefited from contributions to World Bank
Institute learning events by senior policy makers from Africa, Asia,
Central Asia, and the Middle East. The editor is grateful to the lead-
ing scholars who contributed chapters and to the distinguished
reviewers who provided comments. Sandra Gain, Mike Lombardo,
Chunli Shen, and Theresa Thompson helped during various stages
of the preparation of this book and provided comments and
contributed summaries of individual chapters. Kaitlin Tierney pro-
vided excellent administrative support for this project.
I am grateful to Stephen McGroarty for ensuring a fast-track
process for publication of the manuscript. The quality of this book
was enhanced by excellent editorial inputs provided by Barbara
Karni. Production--including editing, typesetting, proofreading,
indexing, and design--was managed by Janet Sasser. Stuart Tucker
is to be thanked for the excellent print quality of the book.

xvii

Contributors

ALEX B.BRILLANTES,JR., is dean and professor of public administration
at the National College of Public Administration and Governance,
the University of the Philippines; secretary-general of theAssociation
of Schools of Public Administration of the Philippines; and deputy
secretary general of the Eastern Regional Organization for Public
Administration. He is the author of Innovations and Excellence
in Local Governance (2004), The Philippine Presidency (1992), and
Dictatorship and Martial Law (1988), as well as many scholarly
articles on local government, development administration, and
civil society.

ALTA F�LSCHER is a principal consultant with Mokoro Ltd., Oxford,
United Kingdom. She has worked with development institutions,
civil society organizations, ministries of finance, and legislatures on
governance,budget and financial management,and pro-poor public
policy issues.

BENJAMIN GOLDFRANK is assistant professor of political science at the
University of New Mexico. His teaching and research interests focus
on Latin American politics, subnational governments, processes of
democratization, and social movements. He is the coeditor of The
Left in the City: Participatory Local Governments in Latin America
(2004) and the author of several book chapters and scholarly articles.

MAHFUZ KABIR is a research fellow at the Bangladesh Institute of
International and Strategic Studies in Dhaka. He has published
extensively on participation and participatory budgeting in scholarly
books and journals.

xix

xx Contributors

ELENA KRYLOVA is the managing director of Development Partnership Inter-
national,a Switzerland-based development consultancy company specializing
in governance issues in Eastern Europe and the former Soviet Union. She is
an expert on citizen participation in governance, democratic decentraliza-
tion, public sector transparency and accountability, and participatory devel-
opment management.
She has served as a consultant to international development agencies,
including the European Commission, One World Action (a nongovern-
mental organization), the Organisation for Security and Cooperation in
Europe, the Swiss Agency for Development and Cooperation, the Swiss Red
Cross, the United Nations Development Programme, and the World Bank.

DONALD P. MOYNIHAN is assistant professor at La Follette School of Public
Affairs at the University of Wisconsin--Madison. His research and teaching
interests include performance management, homeland security, citizen par-
ticipation, public budgeting, and the selection and implementation of public
management reforms. He is the author of numerous scholarly articles and a
forthcoming book, Rethinking Performance Management.

SAMUEL PAUL is founder and chairman of the board of the Public Affairs Centre
in Bangalore, India. He spearheaded the development of citizen report cards
as a public accountability tool.A former director and professor of economics
at the Indian Institute of Management in Ahmedabad, he has served as an
adviser to the Indian government, the United Nations, and the World Bank.
His latest book, which he coauthored, is Who Benefits from India's Public Ser-
vices? A People's Audit of Five Basic Services (2006).

ATIUR RAHMAN is professor of development studies at the University of Dhaka;
honorary chairman of Unnayan Shamannay, a Bangladeshi think tank; and
chairman of Credit Development Forum,the largest networking organization
of multinational financial institutions in Bangladesh.He is the author or coau-
thor of many scholarly articles and books, including Budget and the Poor
(2002),People's Budget:An Illustrative Exercise Using ParticipatoryTools (2002),
and Peasants and Classes: A Study in Differentiation in Bangladesh (1986).

MOHAMMAD A. RAZZAQUE is an assistant professor in the Department of
Economics at the University of Dhaka, and is currently serving in London as
an economic adviser in the Economic Affairs Division of the Commonwealth
Secretariat of the United Kingdom. He has been involved in research projects
sponsored by various multilateral organizations and national governments,

Contributors xxi

including the Asian Development Bank, the European Commission, the
International Development Research Centre, the International Labour
Organization, the United Nations Development Programme, the United
Nations Conference on Trade and Development,theWorld Institute for Devel-
opment Economics Research, and the governments of Bangladesh and Japan.

ANWAR SHAH is the lead economist and program leader in public sector
governance at the World Bank Institute. He is also a fellow of the Institute
for Public Economics in Edmonton, Alberta, Canada, and a board member
of the International Institute of Public Finance in Munich, Germany.

ADRIENNE SHALL is an economist specializing in public sector budgeting and
financial management. Her consulting company has worked extensively
with national, provincial, and local governments as well as with the national
parliament, provincial legislatures, and civil society groups in South Africa.
She has served as a consultant to the World Bank Institute and worked on
intervention projects in Lesotho, Malawi, Nigeria, Swaziland, and Zambia.

CHARAS SUWANMALA is professor of political science at Chulalongkorn
University in Bangkok. He has been deeply involved in decentralization
processes in Thailand for more than two decades. He has served as a
consultant to the United Nations Development Programme, the World
Bank, and other international agencies. He recently created a knowledge and
learning network on local government initiatives in Thailand.

BRIAN WAMPLER is assistant professor of political science at Boise State
University in Idaho. He has published scholarly articles on participatory pol-
itics, some of which have been translated into Chinese, Portuguese, and
Spanish. He is writing a book entitled Delegation, Cooperation, and Contes-
tation: Participatory Democracy in Eight Brazilian Cities.

Abbreviations and Acronyms

CBO community-based organization
CCAGG Concerned Citizens of Abra for Good
Governance (the Philippines)
CSO civil society organization
DISHA Development Initiatives for Social and Human
Action (India)
ESCWA United Nations Economic and Social
Commission for Western Asia
FSLN Sandinista National Liberation Front (Nicaragua)
(Frente Sandinista de Liberaci�n Nacional)
HIPC Heavily Indebted Poor Countries (Initiative)
IDASA Institute for Democracy in South Africa
KDP Kecamatan Development Program (Indonesia)
LASDAP Local Authority Service Delivery Action Plan (Kenya)
MKSS Mazdoor Kisan Shakti Sangathan (India)
NGO nongovernmental organization
PAC Public Affairs Centre (India)
PROOF Public Record of Operations and Finance (India)
PRSP Poverty Reduction Strategy Paper
TAO Tambon (subdistrict) Administrative Organization
(Thailand)
UNDP United Nations Development Programme
UNICEF United Nations Children's Fund
USAID United States Agency for International
Development

xxiii

Overview
a n wa r s h a h

articipatory budgeting represents a direct-democracy approach
P
to budgeting. It offers citizens at large an opportunity to learn
about government operations and to deliberate, debate, and influ-
ence the allocation of public resources. It is a tool for educating,
engaging, and empowering citizens and strengthening demand for
good governance. The enhanced transparency and accountability
that participatory budgeting creates can help reduce government
inefficiency and curb clientelism, patronage, and corruption.
Participatory budgeting also strengthens inclusive governance
by giving marginalized and excluded groups the opportunity to
have their voices heard and to influence public decision making
vital to their interests. Done right, it has the potential to make
governments more responsive to citizens' needs and preferences
and more accountable to them for performance in resource alloca-
tion and service delivery. In doing so, participatory budgeting
can improve government performance and enhance the quality of
democratic participation.
Participatory budgeting comes with significant risks. Partici-
patory processes can be captured by interest groups. Such processes
can mask the undemocratic, exclusive, or elite nature of public
decision making, giving the appearance of broader participation
and inclusive governance while using public funds to advance the
interests of powerful elites. Participatory processes can conceal and

2 Anwar Shah

reinforce existing injustices. Participatory budgeting can be abused to
facilitate the illegitimate and unjust exercise of power. It can be used to
deprive marginalized and excluded groups of having a say in public affairs.
It can do so by unleashing the "tyranny of decision making and control" by
overriding existing legitimate decision-making processes--by limiting the
role of elected local councils in budgetary decisions, for example. The
"tyranny of group dynamics"can allow manipulative facilitators to preserve
and protect the interests of the governing elites. The "tyranny of method"
can be used to exclude more inclusive methods of democratic voice and exit,
such as parental choice in school finance, under which both government and
nongovernment schools are publicly financed based on enrollments (Cooke
and Kothari 2001). To prevent these abuses, participatory process must fully
recognize local politics and formal and informal power relations, so that the
processes yield outcomes desired by the median voter.
This book examines the potential and perils of participatory budgeting,
as observed from practices around the globe. It is divided into three parts.
Part I presents the nuts and bolts of participatory budgeting. Part II surveys
experiences with participatory budgeting in various regions of the world.
Part III is on the CD ROM accompanying this book, and it examines case
studies of practices in seven countries.

Part I: Introduction to Participatory Budgeting

Two chapters introduce the concept and the processes of participatory
budgeting and assess the feasibility of implementing them in developing
countries. In chapter 1 Brian Wampler provides a guide to the practice of
participatory budgeting. He stresses that a combination of four factors
makes it more likely that participatory budgeting programs will be adopted:
strong mayoral support, a civil society willing and able to contribute to
ongoing policy debates, a generally supportive political environment that
insulates participatory budgeting from legislators' attacks, and the financial
resources to fund the projects selected by citizens.
While the rules of the game in a representative participatory budgeting
program vary from city to city and from state to state, Wampler identifies
the guiding tenets of participatory budgeting programs:

Overview 3

of information,policy proposals,debates on proposals,selection of policies,
election of delegates, and oversight.
A"Quality of Life Index"is created by the government to serve as the basis
for the distribution of resources. Regions with higher poverty rates,
denser populations, and less infrastructure or government services
receive a higher proportion of resources than better-off and wealthier
neighborhoods. Each municipality devises its own formula to guarantee
the equitable distribution of resources.
Public deliberation and negotiation over resources and policies take place
among participants and between participants and the government.
A"bus caravan of priorities"is conducted,in which elected representatives
visit all preapproved project sites before the final vote. The visits allow
delegates to evaluate the social needs of proposed projects.
Elected representatives vote on all final projects. Voting can be done by
secret ballot or through a public showing of hands. The results become
part of the public record.
A municipalwide council is elected. All regions elect two representatives
to this council, which oversees participatory budgeting and makes final
budget recommendations. The council meets regularly with the municipal
government to monitor the program.
After final approval of the annual budget by participatory budgeting
delegates, the mayor sends it to the municipal legislative chambers to be
approved. The legislative branch can block specific projects.
A year-end report is published detailing implementation of public works
and programs.
Regional or neighborhood committees are established that monitor the
implementation of projects.

Wampler argues that political and social actors have different motivations
for promoting and participating in participatory budgeting. Local govern-
ments implement participatory budgeting programs in order to build a base
of political support, achieve a more equitable distribution of scarce resources,
foster public learning, and promote transparency in government. Citizens
participate in participatory budgeting programs in order to increase access to
public decision-making activities,gain access to information,and improve the
quality of services provided under a participatory budgeting system. Civil
society organizations (CSOs) participate in order to build broader networks
of supporters and enhance their ability to influence policies.
Several factors limit the impact of participatory budgeting programs on
social justice, public learning, and administrative reform. These include the

4 Anwar Shah

primary focus on specific public works, the dependence of the participants
on the mayor's office, the role of long-term planning within participatory
budgeting, the emphasis on local issues and local public policies, and the
danger that participatory budgeting programs may be manipulated due to the
central role played by the mayor's office. Participatory budgeting programs
are, in Wampler's words, "an important step toward political inclusion and
greater social justice, but they are by no means a magic bullet."
In chapter 2 Donald Moynihan examines the prospects for citizen
participation in developing countries, with a focus on participation in the
budget process. Citizen participation refers to citizens or citizen representa-
tives (who are not elected officials) interacting with and providing feedback
to government at the policy formulation or implementation stages of
governance. Four interrelated arguments support the rise of public partici-
pation: postmodern discourse theory, disillusionment with bureaucracy, the
search for a democratic ideal, and the particular need for participation in a
developing-country context. From these arguments, Moynihan gleans two
basic criteria for participation forums: participation should be broadly
representative of the population, and it should involve meaningful dialogue
that affects public decision making. Based on a review of participation in
Poverty Reduction Strategy Processes, he concludes that participation in
developing countries often fails to meet these criteria.
The cases reviewed in chapter 2 demonstrate a variety of ways in which
participation can shape resource allocation, budget execution, and per-
formance evaluation. One of the lessons is the importance of civil society
in developing-country settings. In most of the cases, a nongovernmental
organization (NGO) or group of NGOs undertook analysis of the budget.
These NGOs seek to represent the poor and disseminate their views to the
government. They do not offer direct citizen participation, but without their
involvement, the prospects for any type of participation would be reduced.
Even in Porto Alegre, Brazil, where citizen involvement is most direct, an
active civil society aided the process of citizen involvement. Organizing
citizen involvement, or simply analyzing public budgets, depends a good
deal on NGOs and their capacity.
Another major lesson is the importance of government attitudes toward
participation. If the goal of participation is to have an impact on public
sector decisions, then pro-participation arguments must understand the
perspective of government and how it influences whether they are supportive
of participation and willing to listen to public feedback. Understanding
the administrative perspective raises the question of how participation
can be fostered when the government is hostile to it. The cases discussed

Overview 5

in chapter 2 suggest that certain types of participation can influence
government actions even if government has not embraced direct citizen
involvement in decision making. Much depends on the ability of NGOs to
communicate their analyses of spending choices, budget execution, and the
performance of public services to the media, the public, and elected officials,
who can then use the information to affect public policy.

Part II: Regional Surveys

Chapters 3�7 survey the practice of participatory budgeting in each of the
five regions of the developing world. In chapter 3 Benjamin Goldfrank
notes that within a relatively short period, from 1990 to 2005, participa-
tory budgeting expanded from about a dozen cities, most of them in
Brazil, to hundreds or perhaps thousands of locales (depending on how
strictly participatory budgeting is defined) in Latin America alone.
Through a broad comparison of national experiences in Bolivia, Brazil,
Guatemala, Nicaragua, and Peru and an analysis of case studies in 14 non-
Brazilian municipalities, he tests the hypothesis that the design and results
of participatory budgeting depend on both the designers' intentions and
preexisting local conditions. He asserts that introducing participatory
budgeting is never a neutral political act but always a form of "competitive
institution building."
Several lessons can be drawn from the Latin American case studies.
First, national legal mandates for participatory budgeting have not created
widespread local success in encouraging citizen participation, fiscal trans-
parency, or effective municipal government. This is partly because designers
of national laws had other goals in mind and partly because of local obstacles,
including reluctant mayors or opposition parties,the weak fiscal and adminis-
trative capacity of municipal governments, and fragmented, conflict-ridden
civic associations.
Second, despite these problems, participatory budgeting has succeeded
in some remarkably diverse locales, from small, poverty-stricken, indigenous
rural villages to large, ethnically diverse cities. While carefully identifying
necessary and sufficient conditions will require further study, success seems
correlated with several factors:

The mayor is indigenous, from a party on the left, or both.
Opposition from local political elites is weak or nonexistent.
Project funding, technical assistance, or both are provided by national or
international aid organizations.

6 Anwar Shah

The municipality has sufficient revenues to make significant investments
in public works or programs.
There is a tradition of participation and cooperation within and among
local civic associations, indigenous customary organizations, or both that
has not been destroyed by guerrilla warfare or clientelist politics.

Third,even where participatory budgeting succeeds on some dimensions,
it does not dramatically reduce poverty (especially in terms of income) on its
own. For this to occur in the future, fundamental principles of participatory
budgeting as originally conceived--transparency and direct participation--
need to be applied to all public spending.
Chapter 3 highlights four main points regarding the future direction of
participatory budgeting in Latin America. First, none of the normative
approaches to participatory budgeting accurately describes its results, which
vary extensively across cases. Participatory budgeting does not always
strengthen the state with respect to the market or insulate pro-market reforms.
Second, the ideological contests surrounding participatory budgeting
continue and are likely to persist. Development agencies are advocating and
local governments are adopting participatory budgeting from Albania to
Zambia. Participatory budgeting also has old and new champions in the
recently ascendant Latin American left.
Third,within the struggle to define,propose,and implement participatory
budgeting, the formal approaches are gaining currency. The open, informal,
deliberative design pioneered by Porto Alegre seems to be out of fashion. In its
place are more regulated, formal, consultative designs focused on preexis-
ting CSOs, such as those implemented in Bolivia, Nicaragua, and Peru.
Fourth, to strengthen the future chances of successful participatory
budgeting at the local level, its original principles should be applied to higher
levels of national and international governance. Even in the relatively small
number of municipalities that succeeded in improving local service provision
with participatory budgeting, low incomes and joblessness remain serious
problems. Applying participatory budgeting principles of transparency,
participation, and redistribution to decision-making spheres where larger
sums of money are at stake may have two positive effects on encouraging
local participatory budgeting efforts. First, it may produce more universal,
egalitarian social policies, strengthening local social capital and allowing
citizens in desperately poor countries to think beyond their next meal.
Second, it may convince mayors and citizens that participatory budgeting is
indeed about these principles--and not a politically motivated subterfuge--
and perhaps worth trying.

Overview 7

Chapter 4, by Alta F�lscher, discusses selected examples of citizen
participation in resource decisions in local, municipal, and submunicipal
areas in Central and Eastern Europe. She examines experiences in Albania,
Armenia, Bulgaria, Moldova, Poland, Romania, the Russian Federation, and
Ukraine, countries with very different dynamics despite a shared history as
communist states.
Participatory budgeting techniques have been introduced at the local
level in several localities in this region within enabling legal frameworks.
Many countries in the region have introduced additional legislation that
makes provisions--albeit usually at a fairly high level--for direct citizen
engagement with public resource decisions. However, legislation, while per-
haps necessary, is not sufficient to increase participation. Participation in the
region remains weak for a variety of reasons:

Historically, citizens in this region have been detached from decisions that
affect them. They are mistrustful of collective action and passive receivers
of public services.
Collective forms of political and social organization, such as political
parties and CSOs, are relatively new, as is an elected, independent, and
autonomous local government.
Intergovernmental fiscal systems are still in development; roles and
responsibilities are weakly and ambiguously assigned to local levels.
Local governments'expenditure responsibilities 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 practical capacity to use resources effectively
and efficiently to solve local problems.
Citizens are dissatisfied with local services, but they do not believe they
can affect them or that local governments can do anything about the
problems they face.

With few exceptions, development agencies or international NGOs were
the initiators of participatory budgeting mechanisms in this region. Even
where initiatives resulted from local action, international organizations fund
key organizations, and contact with networks of CSOs worldwide preceded
local action.Although this does not necessarily detract from the value of the
initiatives, it may have implications for sustainability.
Local government autonomy, local resource availability, citizen organ-
ization and interest, and developed political party systems are often seen as

8 Anwar Shah

prerequisites for successful participatory budgeting. In Central and Eastern
Europe, these mechanisms are proposed as an entry point to overcome
governance weaknesses: participatory budgeting initiatives are often intro-
duced precisely to help establish the kinds of institutions and arrangements
that are often seen as a prerequisite for them to function. In other regions of
the world, successful engagement by citizens with local resource decisions
has catalyzed or occurred in a virtuous circle of governance: good gover-
nance demands good local capacity, which in turn supports and is supported
by participation.
Several conclusions on the potential value of participatory budgeting
initiatives emerge from the case studies in this chapter:

Participatory budgeting increases opportunities for participation. Ques-
tions remain regarding whether the quality of participation is sufficient
to ensure lasting interest in participating and whether it is sufficiently
broad based.
Participatory budgeting can break down barriers between citizens and
government, improving mutual understanding and communication.
Participatory budgeting strengthens local CSOs, which may improve
local governance in the long term. However, the organizations that gain
access to decision making and partnership with local government may
themselves become arms of local government.
Participatory budgeting can help make infrastructure and services more
relevant to the communities they serve.
Participatory budgeting can result in additional revenue for local
development.

The case studies suggest that certain conditions facilitate effective
participation. Initiatives may need to establish these conditions before
introducing participatory budgeting. They also identify certain factors
that may improve results:

Better information produces better results.
Single participation mechanisms are less effective than combinations of
mechanisms.
Awareness raising and education of stakeholders are necessary.
Incentive structures count.
Clear rules for participation and decision making are required.
Partnerships contribute to more effective arrangements.
Localities learn by doing.

Overview 9

Ownership by local leadership is critical.
CSOs and local government officials need specific skills.
Public relations campaigns and media involvement are needed.
Coalition building among local NGOs strengthens initiatives.
External catalysts play a key role in initiating and developing participatory
practices in the region.

Alta F�lscher surveys the Asian experience in chapter 5,where she exam-
ines participatory budgeting mechanisms in Bangladesh, India, Indonesia,
the Philippines, and Thailand. The case studies offer evidence that civic
participation mechanisms can improve development outcomes while improv-
ing the quality of the citizen/state relationship, particularly in terms of local-
level responsiveness to citizen preferences,improved accountability of public
officials and elected representatives, better democracy, and more trust
in government.
From the Asian experience, the author draws useful conclusions about
necessary and supporting factors for successful replication elsewhere.
Whether initiatives are successful depends on both factors in the environ-
ment in which an initiative develops and the design and implementation of
the initiative itself. Initiatives in which public actors are willing to listen to
citizen voice (supported by a local political culture that is driven by issues of
public policy) and where well-designed mechanisms allow civil society
direct access and participation to public decision making have the greatest
impact on policy decisiveness, accountability, democratic practice, and trust
in government. Implementation details of projects remain important in
determining how successful they are.
The greatest risk facing initiatives is that they draw citizens into the state
action space when the political culture is not policy based and local officials
and office holders have no real interest in aligning policy and spending with
citizen preferences. In such cases, participation can be counterproductive.
Although risks can be managed by providing external funding and bypass-
ing state structures, doing so may yield short-term benefits at the expense of
the sustainability of such initiatives. Long-term engagement can be effective
only if sufficient local taste and capacity for participation are built to create
an environment in which state actors engage substantively.
Citizens' own initiatives to improve public transparency and the
accountability of state actors can yield successful results even in environ-
ments where their voice may not have an immediate effect. Three case studies
in this chapter illustrate how citizens who are thoroughly prepared and work
through coalitions can push their way into space and demand a hearing.

10 Anwar Shah

Such initiatives can transform the participatory environment from one in
which state actors are unwilling to engage with citizens into one in which
they have little choice but to do so. Success depends largely on selecting the
correct entry point and designing and implementing projects that maximize
citizen participation.
In chapter 6 Adrienne Shall reviews the experience of participatory
budgeting by subnational governments in Kenya, Mozambique, South
Africa, Tanzania, Uganda, Zambia, and Zimbabwe, where local governments
manage their own fiscal revenues and expenditures. Although participation
is not legislated in all of these countries, all recognize that participation is an
important tool for improving service delivery to communities. To allow for
more inclusiveness in the planning and budgetary processes at the local level,
countries have therefore put in place a variety of mechanisms, including
ward committee structures, participatory planning processes, public meet-
ings, budget conferences, consultative sessions, budget campaigns, monthly
newsletters, a participatory poverty assessment project, and various forms
of media intervention.
In each country the budget preparation process includes a stage that
allows for civic participation in identifying needs and priorities. In some
cases participation occurs only at the beginning of the process; in other cases
once the draft budget is finalized, citizens are given another opportunity to
provide input regarding the allocation of resources. In many instances
citizen input is limited and the allocation of resources is still determined
largely by officials and councillors within the local authorities. Moreover,
citizens are usually allowed to provide input only with regard to the capital
budget, which represents a small proportion of the total budget. In some
cases citizens are not given adequate time to analyze and discuss their input
into the process.
Despite these impediments, most countries believe that civic participa-
tion has increased the number and range of local projects that have a direct
impact on communities that are involved in the participation process.
Participation has also improved relations between citizens and local authori-
ties, as citizens feel that local authorities have become more transparent
and trustworthy.
Local authorities face challenges in implementing participatory bud-
geting. These challenges include lack of capacity, limited understanding of
the roles and responsibilities of all actors, limited scope of participation,
legislative constraints, inadequate monitoring and evaluation systems,
lack of transparency and trust, breakdown in communication, insufficient
resources, and political and social differences.

Overview 11

In overcoming these challenges, some local authorities have learned
valuable lessons:

Enabling legislation and commitment by leadership with strong political
will are critical.
Extensive and continuous capacity building of councillors, officials, and
citizens is necessary.
The process must be initiated well in advance of the budget presentation
to enable serious discussion and evaluation of priorities and resource
allocation.
All key stakeholders need to be identified, in order to ensure broad-based
representation of all sections of society.
Joint commitment by both elected and appointed local officials is necessary.

In chapter 7 Alta F�lscher considers participatory budgeting in
the Middle East and North Africa. She shows that many of the factors that
facilitate citizen initiatives are absent in this region. These include the open-
ness and democratic depth of political and governance systems; the existence
of enabling legal frameworks, including guarantees of basic freedoms; the
capacity for participation both inside and outside of government; the exis-
tence of functional and free media institutions; and the willingness and
capacity of the state to make available budget information. Political con-
testability in this region is very low. Power is based on traditional networks;
elections are often within the control of the ruling elite; and freedom of
opinion, speech, association, and the media is not guaranteed. Although
many countries in the region have committed themselves to decentralizing
and empowering local authorities, real decision-making power has not been
devolved nor resources decentralized. Given the political and sociocultural
systems in the region and its weak decentralization frameworks and practice,
citizen budgeting initiatives are unlikely to succeed, unless local leadership
is interested in participation, efforts are supported by external development
partner funding, or both.
One of the hopes for participatory budgeting initiatives is that with
careful design and targeted support they can initiate positive change in the
political and governance environment, particularly by whetting citizens'
appetite for positive, empowered engagement with the state and contestable
government. This notion is borne out by some examples of successful
initiatives in the region. The question remains, however, whether even
successful initiatives will be able to overcome the systemic barriers identi-
fied and support a regional shift toward better governance. F�lscher argues

12 Anwar Shah

that this is possible only if the underlying social, cultural, and religious
norms in the region are not incompatible with notions of representivity,
consultation, and democracy. This suggests that the design of participatory
budgeting initiatives must take account of the local political, cultural, and
social environment.
In an appendix, F�lscher provides an overview of basic concepts and
approaches to participatory budgeting.

Part III (on CD ROM): Country Case Studies on Civic
Participation in Subnational Budgeting

Part III presents seven country case studies on participatory budgeting on
the accompanying CD ROM. The countries include Bangladesh, India, the
Philippines, Russia, South Africa, Thailand, and Ukraine.
First, Atiur Rahman, Mahfuz Kabir, and Mohammad A. Razzaque
examine Bangladesh, where no formal government regulations promote civic
participation in subnational budgeting and planning processes, and local
government institutions possess little autonomy. As a result, some locally
elected governments have created informal mechanisms to engage civic par-
ticipation, primarily with the assistance of international organizations and
local NGOs. There is little evidence indicating significant change. Local gov-
ernment institutions in Bangladesh are organized at several levels. In rural
areas these include the zila parishad (district), upazila parishad (subdistrict),
and union parishad (the lowest tier). In urban areas they include the
paurasabha (town) and the city corporation.The authors examine subnational
budgeting and planning processes at the level of the union parishad.
An example of an informal mechanism designed to engage civic partici-
pation is the Sarajganj project, the product of a joint effort by the United
Nations Development Programme,the United Nations Capital Development
Fund, and the government of Bangladesh. The project first divided the
union parishad into smaller communities, called wards, and established four
committees to gather citizen input. The ward development committees,
which coordinate citizen participation, are the most significant players in
this process. They are responsible for holding participatory planning ses-
sions through public forums, the last step before budget approval at the
union parishad level.A separate committee is responsible for monitoring the
implementation of the budget at the local level.
Despite this project, the level of civic participation in local budgeting
and planning processes in Sarajganj is minimal at best. Certain institutional
factors continue to hamper participation. At the municipal and union

Overview 13

parishad levels, only selected individuals are invited to discuss the proposed
budgets before they are approved. These individuals often include supporters
and members of the ruling political party. Low levels of citizen education
and the lack of transportation to and from the final budget meeting also
inhibit greater civic participation. Bangladesh's male-dominated culture
minimizes the active role of women in the budgetary process. The Sarajganj
project attempts to counter this cultural norm by ensuring female partici-
pation in the ward development committees.
The authors argue in favor of widespread capacity-building reforms to
strengthen the role of civil society in subnational budgeting and planning
processes. Local government institutions lack training and training manuals
designed to teach civic participation strategies, especially the targeting of
marginalized groups.Local government institutions also need to be provided
with tools with which to effectively monitor the implementation of local
programs following budget approval.
Second, Samuel Paul describes two case studies on the role of CSOs in
India's subnational budgetary process. The first describes the role of the
Development Initiative for Social and Human Action (DISHA), a local CSO
in the state of Gujarat, that conducts budget analyses and advocacy
campaigns on behalf of the poor at the state level. The second examines the
Public Record of Operations and Finance (PROOF) consortium, which
conducts budget analyses and facilitates public discussion at the local level.
DISHA developed a program to promote citizen participation in the
state budgetary process. Pathey, the unit responsible for this program,
conducts budget analysis, dialogue with policy makers, and education of and
advocacy on behalf of the public. It examines overall estimated revenue and
expenditures across departments, sectors, and programs targeting the poor.
It also verifies expenditures through field research. It disseminates "briefs"
to legislators and members of the media and holds training sessions with
coalitions of volunteer groups. These sessions serve as a conduit to reach the
targeted population--the poor--and encourage local leaders and organiza-
tions to meet with district-level authorities. Pathey also interacts with senior
public officials on behalf of all the groups and individuals it represents.
According to Pathey's own reports, legislators welcome their briefs and
public awareness has improved. The impact of its work on policy making is
difficult to assess.
PROOF is a campaign for citizens to participate in the budgetary
process in the city of Bangalore. Unlike DISHA, PROOF focuses on the
entire budget. Its strategy is based on creating a public forum to review the
city budget, its performance, and its problems and to educate citizens about

14 Anwar Shah

the budget process. PROOF comprises four primary civic organizations,
each of which plays a separate and integral role in its citizen campaign.
Although this program has improved citizen participation in Bangalore and
increased dissemination of financial statements to the public, it continues to
face a variety of challenges.
Given the diversity of country contexts and political systems,case-specific
strategies are needed. Strengthening the capacity for citizen participation in
the budget process requires the development of a close working relationship
with policy makers, budget analysts, civic organizations, and citizens at large.
Third, Alex Brillantes, Jr., discusses civil society's role in subnational
planning and budgeting process in the Philippines. In 1991 the government
approved the Local Government Code, a constitutional amendment that
decentralized power to local governments. While civil society participation
in subnational planning is effective, challenges remain.
Traditionally, the notion of governance in the Philippines was limited
to government as the only institution involved in the budgetary process.
Once the Local Government Code became law, the concept of governance
included alternative mechanisms and institutions. This legitimized the role
of NGOs in this process and increased citizen involvement in subnational
budgeting.After the Local Government Code was implemented, NGOs were
allocated a minimum of one-fourth of the seats on the local development
council--the primary policy-making and budgetary planning body at the
community level. Before adoption of the new code, NGOs were allocated
a maximum of one-fourth of the seats. The change in the code has institu-
tionalized civil society participation in local budgeting and planning
processes, supported by law.
Several participatory mechanisms were established in Naga City. These
mechanisms included continued accreditation of NGOs, multilevel consul-
tations to identify citizen priorities, citywide referenda on development
issues, and the establishment of the Naga City People's Council. This council,
which is made up of accredited businesses and NGOs, serves as the peoples'
representative. It plays an active role in the legislative budget process.
Despite the success of Naga City and the recent amendments to the
constitution, civic participation in subnational budgeting and planning
process is not widespread in the Philippines. Brillantes argues that there is a
need to implement new strategies to engage the wider public. Local govern-
ments need to identify both formal and informal mechanisms for civil society
to play a more active role in this process. Whether or not they can do so
depends on policy changes, capacity building, formal systems of account-
ability, and efforts to eliminate resource duplication.

Overview 15

Fourth, Elena Krylova examines the Transparent Budgeting Program
implemented by Centre Strategiya,a St.Petersburg�based NGO.The objective
of the program was to establish mechanisms for public budget hearings
and independent budget analyses.Krylova's analysis focuses on the experiences
in Murmanks, Novosibirsk, Petrazavodsk, Pskov, St. Petersburg, Samara,
Velikiye Luki, and Yuzno-Sakhalinsk.
Russian budgeting at the regional and local levels operates according
to a four-step process: planning and preparation of a draft budget, review
and approval of the budget by a regional or local body, implementation
of the budget, and review of budget reports by regional or local bodies. At
any point in this process, civil society and the general public have the right
to influence local decision-making and budgeting processes through a
variety of mechanisms, including organizing local referenda, partici-
pating in public hearings, conducting public opinion polls, and organizing
public debates.
The transparent budgeting program grew out of a civil society initiative
in 1998 based on the principles that budget activities should be open to the
public and that regular interaction should take place between authorities
and civil society. The first objective of the program was to establish local
budget analyses by independent experts in order to determine if budgeting
policies took the interests of all citizens into account. The second objective
was to establish public hearings. These hearings are organized by special
committees composed of representatives of groups and organizations that
initiate the hearings. The committees are responsible for all preparatory
work and for appointing a moderator for the hearing. All hearings are
concluded with a vote by all those present and a final recommendation to
local authorities. Summaries of the hearings are published and placed on file
in public libraries.
Several factors are impeding the success of these programs, according to
program officials. Low levels of civic participation in public budget hearings
are attributed to the lack of a clear division of responsibilities between
regional and local governments, the lack of organizational development
among NGOs, widespread illiteracy, weak local media, nontransparent
mechanisms of interaction between government and civil society, and the
misconception of participation by government officials. The lack of trust
between authorities and civil society is also problematic. Independent
budget analyses have been hindered by difficulties. In some locations pro-
gram officials were unable to find local independent experts capable of
conducting the analyses. In other locations local experts were apprehensive
about criticizing the local authorities.

16 Anwar Shah

Krylova offers several recommendations for improving civic participation
in subnational budgeting in Russia. Resources must be directed to educating
local government officials and legislative representatives about the
advantages of budget transparency and the role civic society can play in the
budgeting process. Equally important is the need to increase political will
among local officials and to build awareness among citizens about the role
they can play in the budget process. Strengthening the capacity of local
media as well as the academic and NGO communities to serve as indepen-
dent budget experts is also important.
Fifth,Adrienne Shall describes the impact of the transformation of local
governments in South Africa on civic participation in policy-making and
budgetary processes by looking at two municipalities, Mangaung and
Ekurhuleni. As a result of South Africa's 1993 constitution as well as the
adoption of several new laws in the mid-1990s, new participatory laws were
created and municipalities formed.Despite these changes,civic participation
processes in South Africa's 284 municipalities vary widely.
South Africa's Constitution of 1993, the Municipal Structures Act of
1998, the Municipal Systems Act of 2000, the Municipal Finance Manage-
ment Act of 2003, and the Municipal Property Rates Act of 2004 all contain
provisions promoting two primary forms of participation at the local
government level. The first mechanism, the ward committee system, is
designed to provide a forum in which communities can play an active role
in their municipality. Each ward directly elects a ward councillor, who
represents the ward's interests as a member of the municipal council. The
second mechanism, the subcouncil, comprises ward councillors as well
as other councillors appointed by the council to ensure equal political
party representation. Additional participatory mechanisms are available
to each municipality.
The municipalities of Ekurhuleni and Mangaung have similar mecha-
nisms for participation. Both have implemented the ward committee system
as the primary vehicle for civic participation. The objective is to obtain feed-
back from the community for the Integrated Development Plan, which
establishes the strategic goals of a municipality over a five-year period. Each
municipality has also established additional mechanisms for civic partici-
pation that cater to the specific needs of its communities. In Ekurhuleni
several consultative structures are in place to ensure stakeholder input into
policy-making and budget processes from different sectors. The planning
approach adopted in Mangaung is called community-based planning. It
allows the ward committees to identify different social groups and meet with
each group separately to assess its needs.

Overview 17

The South African legal framework establishes mechanisms for public
participation in the planning, policy-making, and budgetary processes of
municipalities. It is too early to determine the extent to which these mecha-
nisms have been fully implemented with the desired results. In Ekurhuleni
and Manguang, government offic ials implemented several consultative
processes. Several challenges remain, however, including the low level of
capacity, language barriers, the lack of communication between councillors
and other officials, and a lack of resources.
Sixth,Charas Suwanmala reviews Thailand's experience with participatory
budgeting. Local government in Thailand comprises five units: the provincial
administrative organization, the municipality, the subdistrict administrative
organization (TAO),and two special forms of local government,which include
the Bangkok Metropolitan Administration and Pattaya City. Suwanmala
examines civic participation at the municipal and subdistrict administrative
levels,referred to as"communal tiers."These levels of government are governed
directly by locally elected councils and chief executives.
Suwanmala examines the mechanisms for civic participation in Suan
Mon TAO, Huai Kapi TAO, Khon Kan City, and Rayong City. Suan Mon TAO
and Huai Kapi TAO have established similar mechanisms for civic partici-
pation in the local government budgeting process. In both locales, civic
forums have been adopted at the village and subdistrict levels. At the village
level, civic forums are composed of the village leader and other community
representatives. The members of the village civic forum are responsible for
discussing and submitting a proposed list of budget priorities to the sub-
district, which is composed of representatives of village civic forums. The
members of the subdistrict civic forum then discuss each of the proposed
budget priorities and produce a final proposal for the chair of the subdistrict
administration. Huai Kapi TAO has also implemented household surveys to
assess public opinion of local services and to increase civic participation.
Khon Kan and Rayong cities have adopted different tools for civic engage-
ment to elicit wider participation. In Khon Kan City, officials use focus groups
and town hall meetings as their primary mechanisms. The focus groups help
generate visions,policy directions,and strategic actions for local budgeting and
planning. Town hall meetings are designed to facilitate dialogue between the
public and local officials.Rayong City has created a civic town hall development
commission and a civic fiscal policy commission.It also conducts focus groups
and has developed a manual for participatory planning.
Focus group consultations, the most widely used mechanism, have
proven especially successful in Thailand because of the flexibility to adopt
formal and informal approaches. Town hall meetings and civic forums have

18 Anwar Shah

proven successful in building consensus and increasing trust of local
government. Assessing the impact of civic committees and citizen surveys is
more difficult. Suwanmala argues for the need to continue strengthening the
capacity of civic organizations and training local officials and residents to
fully understand their roles.
Seventh, Elena Krylova surveys Ukraine's experience with participatory
budgeting.Ukraine's 1996 constitution and the adoption of several subsequent
laws created government regulations designed to increase civic engagement in
local budgeting and planning. The overall framework for local governance,
however, is largely the result of the 1997 Law on Local Self-Government and
the 2001 Budget Code. According to the 1997 law, local self-government is
established through direct elections of local councils (radas) every four years.
Local councils are responsible for establishing their own executive committees
and assume responsibility for local development programs and budgets.
Krylova discusses the impact of these laws on the town of Kamyanets-Podilski
and its process of subnational budgeting.
Public budget hearings are the primary vehicle for civic participation
in local budgeting processes in Kamyanets-Podilski. The objective of these
hearings is to provide a forum in which citizens and officials can engage in
dialogue regarding local budget issues. Public budget hearings are initiated
by a group of residents, the town council, or the mayor or by an executive
committee. They involve the establishment of special hearing committees to
conduct public surveys and opinion polls addressing specific budget and plan-
ning issues. Actual hearings, which may involve voting, are then held and the
results published.Since national laws in Ukraine do not provide clear guidance
on procedures for public budget hearings,local authorities may adopt munici-
pal statutes to govern the implementation of civic participation mechanisms.
Krylova concludes that the success of civic participation in budgeting
and planning processes in Ukraine is contingent on three factors: the leadership
of the mayor, the extent to which local NGOs play active roles in promoting
citizen engagement, and public knowledge of budget processes. Other, less
significant factors include the presence of a local ombudsman and the adop-
tion of a program performance approach to budgeting in place of line-item
budgeting. Poor government capacity to mobilize citizens, the lack of diverse
training materials, and the lack of general information available to the public
continue to hinder civic participation in subnational budgeting processes.

Reference

Cooke, Bill, and Uma Kothari. 2001. Participation: The New Tyranny? London: Zed
Books Ltd.

One
P A R T

Introduction to
Participatory Budgeting

A Guide to Participatory
Budgeting
b r i a n wa m p l e r

articipatory budgeting is a decision-making process through
P
which citizens deliberate and negotiate over the distribution of
public resources.Participatory budgeting programs are implemented
atthebehestof governments,citizens,nongovernmentalorganizations
(NGOs), and civil society organizations (CSOs) to allow citizens to
play a direct role in deciding how and where resources should be
spent.These programs create opportunities for engaging,educating,
and empowering citizens,which can foster a more vibrant civil society.
Participatory budgeting also helps promote transparency, which
has the potential to reduce government inefficiencies and corruption.
Because most citizens who participate have low incomes and low
levels of formal education, participatory budgeting offers citizens
from historically excluded groups the opportunity to make choices
that will affect how their government acts. Put simply, participatory
budgeting programs provide poor and historically excluded citizens
with access to important decision-making venues.
Participatory budgeting is noteworthy because it addresses two
distinct but interconnected needs: improving state performance and
enhancing the quality of democracy. It helps improve state perform-
ance through a series of institutional rules that constrain and check
the prerogatives of the municipal government while creating
increased opportunities for citizens to engage in public policy
debates. It helps enhance the quality of democracy by encouraging

22 Brian Wampler

the direct participation of citizens in open and public debates, which helps
increase their knowledge of public affairs.
Improving state performance and enhancing the quality of democracy
are desired goals, but they are not necessarily produced by participatory
budgeting programs. Participatory budgeting programs have produced
results that run the gamut from highly successful to very weak.
Participatory budgeting was initially implemented in 1990,in 12 Brazilian
cities.By2005ithadbeenexpandedtomorethan300municipalitiesworldwide
(Cabannes n.d.; Wampler 2004a; Wampler and Avritzer 2005).
There is broad variation in how participatory budgeting programs
function, which means that the effects of participatory budgeting on
accountability,the decentralization of decision-making authority,and empow-
ermentareconditionedbythelocalsocial,political,andeconomicenvironment.
Participatory budgeting opens up obscure budgetary procedures to ordinary
citizens and helps create a broader public forum in which citizens and
governments discuss spending, taxation, and implementation. It is simulta-
neously a policy process that focuses on the distribution of resources and a
democratic institution that enhances accountability, transfers decision-making
authority to citizens, and empowers citizens.
Participatory budgeting programs confront social and political legacies
of clientelism, social exclusion, and corruption by making the budgetary
process transparent and public. Social and political exclusion are challenged,
as low-income and traditionally excluded political actors are given the
opportunity to make policy decisions.By moving the locus of decision making
from the private offices of politicians and technocrats to public forums, public
meetings help foster transparency.
Participatory budgeting programs also serve as "citizenship schools," as
engagement empowers citizens to better understand their rights and duties
as citizens as well as the responsibilities of government. Citizens learn to
negotiate among themselves and with the government over the distribution
of scarce resources and public policy priorities.
When participatory budgeting programs function poorly in terms of
policy outputs, there is still the potential for participants to enhance their
knowledge of governmental responsibilities and citizens' rights, which can
enhance their capacity to negotiate with and place demands on state officials.
However,when participatory budgeting programs function poorly,increased
cynicism about democracy, decentralization, and participation may be gener-
ated,as participants become disillusioned with an ill-performing institution.
There is no precise model for participatory budgeting programs. While
there are similar tenets and institutional mechanisms, participatory budgeting

A Guide to Participatory Budgeting 23

programs are structured in response to the particular political, social, and
economic environment of each city or state.While alluding to the differences,
this chapter presents a synthesis of the most representative cases.
The assumption of this chapter is that the tools and institutional means
developed to date are, in small or large part, transferable to other locales.
Cities, municipalities, states, and regional governments in diverse parts of
the world should be able to draw on the experiences described here to
develop tools that link budgeting, policy making, and citizen participation.
NGOs and local political activists can draw on these experiences to promote
formal participatory budgeting programs or informal monitoring programs
inspired by the participatory budgeting example.

History of Participatory Budgeting

Participatory budgeting programs are part of a larger effort in Brazil to
extend and deepen actual, existing democracy (Abers 2000; Avritzer 2002;
Baiocchi 2001; Wampler and Avritzer 2004). Since the reestablishment of
democracy in 1985, Brazilian politics has continued to be dominated by
traditional patronage practices, social exclusion, and corruption. Numerous
governments, NGOs, social movements, and political parties have turned to
the ideas, values, and rules associated with participatory budgeting in an
effort to improve policy outcomes and enrich Brazil's young democracy.One
of the reasons why participatory budgeting is transferable to other locations,
especially in developing countries, is that clientelism and social exclusion are
everyday realities in many parts of the developing world.
Participatory budgeting began in 1989 in the municipality of PortoAlegre,
the capital of Brazil's southernmost state, Rio Grande do Sul. Porto Alegre has
more than 1 million inhabitants and is wealthy by Brazilian standards. In
1988 the Workers' Party, a progressive political party founded during the
waning years of the 1964�85 military dictatorship, won the mayoral election.
Its campaign was based on democratic participation and the "inversion of
spending priorities"--that is, the reversal of a decades-long trend in which
public resources were spent in middle- and upper-class neighborhoods.
Participatory budgeting was intended to help poorer citizens and neighbor-
hoods receive larger shares of public spending.
When the Workers' Party won the mayor's office in Porto Alegre, it
inherited a bankrupt municipality and a disorganized bureaucracy. During
its first two years in office,the new administration experimented with different
mechanisms to tackle financial constraints, provide citizens with a direct role
in the government's activities, and invert the social spending priorities of

24 Brian Wampler

previous administrations. Participatory budgeting was born through this
experimental process.In 1989 and 1990,the first two years of participatory bud-
geting, fewer than 1,000 citizens participated in the participatory budgeting
process; by 1992 the number of participants had jumped to nearly 8,000.
After the Workers' Party was reelected in 1992, the program took on a life of
its own, with participation increasing to more than 20,000 people a year.
Participation grew as citizens realized that participatory budgeting was an
important decision-making venue.

How and Where Does Participatory Budgeting Work?

What are the basic conditions associated with the establishment of a partici-
patory budgeting program? Why do governments, NGOs, CSOs, and
citizens choose to adopt participatory budgeting? What basic financial issues
must be considered?

Conditions Conducive to Participatory Budgeting

A combination of four factors makes it more likely that participatory bud-
geting programs will be adopted:strong mayoral support,a civil society willing
and able to contribute to ongoing policy debates, a generally supportive
political environment that insulates participatory budgeting from legislators'
attacks, and financial resources to fund the projects selected by citizens.
It is generally municipal-level governments that implement participatory
budgeting programs, although there are some participatory budgeting pro-
grams at the state and provincial levels.
Governments that are willing to implement participatory budgeting
generally have a reformist tinge--the political leadership tends to include
political entrepreneurs willing to experiment with a new institutional format
or political reformists willing to adopt parts of a program that have proven
successful elsewhere. Government support is vital, because government
officials must make the decision to delegate authority. After they do so, they
must build the necessary logistical, informational, and financial support
needed for participatory budgeting to function.
Governments that enjoy strong bases of support from social movements,
unions,and NGOs are more likely to initiate participatory budgeting,because
doing so involves reaching out to a constituency they already know. Partici-
patory budgeting programs have been most successful in municipalities with
deep civil society roots. Preexisting networks of social movements, commu-
nity organizations, and other voluntary associations provide important

A Guide to Participatory Budgeting 25

support for experimental programs.Programs depend on the active participa-
tion of citizens not only to select new policies but also to legitimize the
government's reform efforts.Higher rates of participation will help legitimize
a government's policies.
Although participatory budgeting is implemented at the behest of the
mayor, the municipal legislature can be involved in the process. Because
participatory budgeting offers the potential to undermine traditional
patronage networks, many legislators will resist fully implementing it. If the
legislative branch is weak relative to the mayoral administration, legislators
may be able to act as spoilers, trying to undermine the process if they feel it
threatens their interests. If the mayor and the legislative branch are at odds,
it is possible that the mayor will be unable to delegate authority to partici-
patory budgeting because of the need to expend political energy on working
with legislators.
While many participatory budgeting programs address the overall
financial health of the municipality,the principal focus remains discretionary
spending. Having discretionary funding available is important because it
increases the likelihood that citizens can directly select policy outcomes. The
more financial flexibility a government enjoys, the greater the influence
citizens can exercise on the selection of new public works. Governments must
have the resources to implement the projects that participants select.
If a financially strapped municipality decides to implement a participatory
budgeting program,the focus shifts from the selection of specific public works
projects to a more general discussion of debt, taxes, and the efficient use of
limited resources. The municipal government must first dedicate consid-
erable time and energy to explaining to participants the dire financial situation
of the municipality. Participants must then vote on the general policy
priorities of the government. Participants will not select specific public works
to be implemented but will indicate in a broad fashion how the government
should spend available resources.

The Rules of the Game

What are the rules of the game in a representative participatory budgeting
program? What are the specific ways that citizens are incorporated into policy-
and budget-making arenas?
The rules of the game are similar but not identical in the majority of
participatory budgeting programs. They tend to be designed by the elected
government with input from citizens. Participants generally must approve
the rules and any subsequent changes to them.

26 Brian Wampler

While the rules vary from city to city and from state to state, it is possible
to identify the guiding tenets of participatory budgeting programs. For the
sake of parsimony, the discussion focuses on the municipal level of govern-
ment. The basic tenets of participatory budgeting include the following:

The municipality is divided into regions to facilitate meetings and the
distribution of resources.
Government-sponsored meetings are held throughout the year, covering
different aspects of the budgeting and policy-making cycles: distribution
of information,policy proposals,debates on proposals,selection of policies,
election of delegates, and oversight.
A"Quality of Life Index"is created by the government to serve as the basis
for the distribution of resources.Regions with higher poverty rates,denser
populations, and less infrastructure or government services receive a
higher proportion of resources than better-off and wealthier neighbor-
hoods.Each municipality devises its own formula to guarantee the equitable
distribution of resources.
Public deliberation and negotiation take place among participants and
between participants and the government over resources and policies.
A"bus caravan of priorities"is conducted,in which elected representatives
visit all preapproved project sites before the final vote. The visits allow
delegates to evaluate the social needs of proposed projects.
Elected representatives vote on all final projects. Voting can be done by
secret ballot or through a public showing of hands. The results become
part of the public record.
A municipalwide council is elected. All regions elect two representatives
to this council, which oversees participatory budgeting and makes final
budget recommendations. The council meets regularly with the municipal
government to monitor the program.
After final approval of the annual budget by participatory budgeting
delegates, the mayor sends it to the municipal legislative chambers to be
approved. The legislative branch can block specific projects.
A year-end report is published detailing implementation of public works
and programs.
Regional or neighborhood committees are established to monitor the
design and implementation of policy projects.

The rules of participatory budgeting were designed to produce specific
outcomes, such as engaged deliberation, social justice, and active citizens.

A Guide to Participatory Budgeting 27

New institutions and policies often produce unintended consequences that
have the potential to pervert the institution's original intent, however, as the
political science and public administration literature documents (table 1.1).
The participatory budgeting defines the division of responsibilities
between government and citizens (figure 1.1). It also includes lists of tasks
that need to be accomplished at each phase of the process.

T A B L E 1 . 1 Desired Outcomes and Unintended Consequences
of Participatory Budgeting

Undesirable potential
Rule Desired outcome consequence

Establish district Improved efficiency, Meetings at the district level may
boundaries. accountability, and limit the formation of citywide
decentralization; CSO networks. Small groups
intradistrict within the district may be
competition over unable to mobilize sufficient
resources numbers to secure projects.
Conduct year-long Higher level of Mobilization becomes an end
series of participation, which in itself to secure resources;
meetings. produces greater participation becomes inattentive,
deliberation and as people attend meetings with
potential for the sole purpose of voting for
empowering citizens specific policy proposals.
Create Quality of Increased allocation of Poor neighborhoods are not
Life Index. resources to low- uniformly distributed, so small,
income districts; marginalized populations
increased participation may not receive benefits.
as citizens compete Well-organized groups benefit
within each region at the expense of poorly
organized and small groups,
discouraging participation
among citizens unlikely to
receive funding.
Conduct "bus Increased solidarity and Delegates lack basic skills to
caravan of knowledge about evaluate need and may be
priorities." proposed projects swayed by passionate appeals.
Have elected Smaller number of Process can become dominated by
representatives projects allows community leaders rather than
vote on final qualified participants citizens.
projects. to directly participate
in decision making

(continued)

28 Brian Wampler

T A B L E 1 . 1 (continued)

Undesirable potential
Rule Desired outcome consequence

Elect municipalwide Direct negotiation between Small group of community leaders
council. small body of citizens may use their access to
and government government officials to promote
officials/legislators, to their own interests, creating a
reduce inefficiencies, new type of political actor who
enhance quality of may not be accountable to
debate, and make base of support.
difficult decisions
Have government Education of public on Participants are dependent on
provide financial information government for information.
participants with
detailed financial
information.
Form neighborhood Transparency, Participants are dependent on
committees to accountability government for information.
monitor
participatory
budgeting.

Source: Author.

Selecting projects

The first round of participatory budgeting, which typically runs from March
to June, involves the distribution of information, the initial discussion of
policies, and the determination of the number of elected representatives
(table 1.2). Mobilization in neighborhood meetings is high, because turnout
determines the number of elected representatives from each neighborhood
to the regional meetings. Because final votes are taken at the regional level,
a larger number of elected representatives (citizen-delegates) from a neigh-
borhood increases its likelihood of having a project selected.
Meetings at the regional and neighborhood levels tend to be about two
hours long. The first part of the meeting provides an opportunity for partici-
pants to inform their colleagues of upcoming events and issues of concern.
The second part of the meeting is a formal presentation of participatory
budgeting�related information by government officials. The last part of the
meeting is dedicated to a question and answer session, in which participants
ask government representatives to clarify their concerns. Participants are
generally limited to three minutes to speak or ask questions.The three-minute

A Guide to Participatory Budgeting 29

Participants Government

First round regional
meetings
Mayor's office

March
to
June Neighborhood
meetings

City agencies

Second round regional
meetings

Technical and
administrative support
June
to Neighborhood

September meetings

Municipal budget Proposed budget
council (September)

Source: Wampler 2000.

F I G U R E 1 . 1 Annual Participatory Budgeting Cycle

T A B L E 1 . 2 Roles of Government and Participants during the First
Round of the Participatory Budgeting Process (March�June)

Government's role Participants' role

Regional meetings
Draw district and subdistrict boundaries. Mobilize citizens.
Prepare Quality of Life Index. Hold capacity-building meetings.
Distribute financial information. Analyze financial information.
Present projects it wants participants to Hold preliminary discussions of
approve. available resources.

Neighborhood meetings
Provide detailed technical information. Discuss priorities for municipality.
Provide administrative support to Discuss specific public works.
participants (access to telephones,
photocopiers).
Establish meeting places and times. Preselect public works.

Source: Author.

30 Brian Wampler

time limits help to keep the meeting moving along. Deliberation over priorities
and projects occurs informally, as participants analyze the probable level of
resources for their region and begin negotiating with one another over pro-
posed projects. Citizen delegates are not paid for their participation, although
some municipalities provide bus fare to offset the transportation costs.
The second round of the process defines the policies and projects that
the government will implement in the coming fiscal year (or even two years)
(table 1.3). By this stage, participants should have acquired sufficient infor-
mation to promote the priorities of their communities and to make decisions
at the regional meetings. Final decisions on specific public works projects or
the definition of general social priorities are made at the regional meetings.
Distribution of resources is based on two criteria. The first is the Quality
of Life Index. Each region receives a specific percentage of the budget
depending on its overall need. Wealthier regions with more advanced infra-
structure receive a smaller percentage than poorer regions with less formal
infrastructure. The goal is to ensure that the limited resources available are
spent in the poorest neighborhoods and on the most vulnerable sections of
the population. Democracies tend to favor organized groups, with middle-
and upper-income groups having the greatest advantages. Participatory

T A B L E 1 . 3 Roles of Government and Participants during the Second
Round of the Participatory Budgeting Process (July�November)

Government's role Participants' role

Regional meetings
Draft initial cost estimates for proposed Debate proposed policies or public works.
projects.
Distribute information and arrange a "bus Visit proposed public works projects.
caravan of priorities" in each district.
Monitor vote. Vote on policies or public works to be
implemented.
Oversee Municipal Budget Council. Elect two representatives from each
region to Municipal Budget Council.

Neighborhood meetings
Have technical staff work closely with Continue to mobilize citizens on behalf of
oversight committees. projects and policies.
Draft technical plans. Elect oversight committees; approve
technical plans.

Source: Author.

A Guide to Participatory Budgeting 31

budgeting allows individuals and groups to compete against other groups
that have similar means.
The mobilization and deliberation processes within the region represent
the second criterion for the distribution of resources. Organized groups
compete, mobilize, negotiate, and deliberate within their own regions over
available resources. Because all projects cannot be supported, groups form
alliances to promote particular projects.The"bus caravan of priorities"is a key
part of this process, as participants must visit the sites of proposed projects in
order to personally evaluate the level of need.

Implementing projects

While most attention focuses on the selection of policies, an important aspect
of participatorybudgetingistheimplementationof theselectedprojects.Imple-
mentationisanongoingprocess.Someprojectscanbeimplementedduringthe
subsequent year; larger projects may take several years to implement.
One of the important reforms associated with successful participatory
budgeting programs is that participatory budgeting projects are implemented
through a regularized, bureaucratic process. Administrative procedures are
followed, replacing the direct intervention of politicians into bureaucracies.
Participants have a reduced role in this process, although they do take part
in oversight meetings to ensure that the policies are being implemented
according to previously established criteria (table 1.4).
In Belo Horizonte, for example, regional committees must approve all
technical plans. These committees also oversee that the public works are
implemented according to the approved technical plans. Neighborhood

T A B L E 1 . 4 Roles of Government and Participants during Project
Implementation

Government's role Participants' role

Prepare technical plans, contracts, Approve technical plans.
and so forth.
Integrate administrative agencies. Monitor order of project implementation.
Have technical staff work closely with Monitor project implementation (on site).
oversight committees.
Oversee Municipal Budget Council. Have delegates attend weekly meeting of
Municipal Budget Council.

Source: Author.

32 Brian Wampler

committees monitor on-site construction projects, helping to ensure that
public works are implemented according to the established criteria. This is a
crucial part of the process,as it diminishes the likelihood of overt corruption.
It is telling that in the city of Recife, where participatory budgeting has had
moderate successes, the oversight committees are weak. Effective and inde-
pendent monitoring committees have not been supported by the government,
restricting the ability of citizens to monitor the quality of the work.

State of the Debate

The attention of scholars on participatory budgeting programs has been
associated largely with two broad areas of analysis: the factors that lead to
the initiation of participatory budgeting programs and the effects partici-
patory budgeting has generated. The debate on initiation of participatory
budgeting programs has focused on the innovation (1989�96) and diffusion
(1997�2004) phases.
The innovation phase has been studied most intensely in Porto Alegre,
Brazil. Abers (1998, 2000) argues that synergy between government officials
and civil society leaders in Porto Alegre allowed them to create an institution
that served both of their interests (see also Baierle 1998; Torres and Grazia
2003). Baiocchi (2003a, 2003b) places greater emphasis on the role of the leftist
Workers'Party as the"instigator"of the program,but he recognizes that CSOs
played a fundamental role.A third line of analysis suggests that the formation
of a broader civil society during the 1980s led to the formation of new strate-
gies and tactics by CSOs (Wampler andAvritzer 2004).Through the formation
of"participatory publics,"citizens learned to deliberate and press for new insti-
tutional formats, which were most likely to be implemented when the CSOs
aligned themselves with elected governments (Baierle 1998; Wampler and
Avritzer 2004).The differences among scholars relate largely to the weight and
importance they place on CSOs and government actors.
While there is broad consensus on the reasons for adoption during the
first phase of participatory budgeting programs, the debate on the diffusion
of participatory budgeting programs is at a preliminary stage, due to the
paucity of data and the relatively recent need for this type of analysis. The
2003 study by Torres and Grazia represents the first effort to collect similar
sets of data on cases in Brazil. The evidence demonstrates that the basic
social and political characteristics of municipalities that implement partic-
ipatory budgeting have changed since the original set of 12 cases in 1990.
Centrist and conservative political parties now implement more than
40 percent of participatory budgeting cases in Brazil, up from less than

A Guide to Participatory Budgeting 33

10 percent in 1990. Participatory budgeting is now implemented in all five
of Brazil's regions,although it is still concentrated in the south and southeast.
While the original cases of participatory budgeting were in municipalities
with above-average Human Development Index (HDI) scores, municipalities
that had participatory budgeting in 2004 had HDI scores similar to the
majority of large Brazilian municipalities.
The second major line of analysis has been to establish the effects of
participatory budgeting on participation rates, citizens' and governments'
attitudes and behaviors, policy-making outcomes, and social justice. Partici-
pation in participatory budgeting meetings gradually increased over time in
Belo Horizonte, Ipatinga, Porto Alegre, Recife, and S�o Paulo, although just
1�4 percent of the population participates (www.ibge.gov.br). Over time,
programs have drawn larger numbers of citizens into formalized policy-
making venues (table 1.5).
There are several reasonable explanations for the increase in participation
rates. One is that citizens affiliated with the governing party participate in
higher numbers to support their party. There is some evidence in support of
this explanation. In two small Brazilian municipalities, Betim and Jo�o de
Monlevade, many of the most active leaders were affiliated with or at least
sympathetic to the Workers'Party, the party that implemented participatory

T A B L E 1 . 5 Number of Participants in Participatory Budgeting
Processes in Selected Cities in Brazil, 1990�2003

Year Belo Horizonte Ipatinga Recife Porto Alegre S�o Paulo

1990 n.a. 630 n.a. 976 n.a.
1991 n.a. 470 n.a. 3,694 n.a.
1992 n.a. 483 n.a. 7,610 n.a.
1993 n.a. 563 n.a. 10,735 n.a.
1994 15,216 572 n.a. 9,638 n.a.
1995 26,823 681 n.a. 11,821 n.a.
1996 36,508 604 30,000 10,148 n.a.
1997 31,795 683 n.a. 11,908 n.a.
1998 19,418 1,533 30,000 13,687 n.a.
1999 21,175 2,136 n.a. 14,776 n.a.
2000 31,369 2,018 30,000 14,408 n.a.
2001 n.a. 5,015 42,800 16,612 34,000
2002 28,124 981 67,100 28,549 55,000
2003 n.a. 2,374 69,500 26,807 80,000

Source: Wampler 2007b; Wampler and Avritzer 2004.
n.a. Not applicable.

34 Brian Wampler

budgeting in both municipalities (Nylen 2003b). However, this evidence tells
us little about the larger numbers of ordinary participants who do not
assume leadership roles.Evidence from Belo Horizonte,Ipatinga,PortoAlegre,
Recife, and S�o Paulo suggests that most participatory budgeting delegates
were supportive of leftist political parties (Wampler 2007a).
A second explanation is that participatory budgeting provides new
opportunities for the already politically active (Nylen 2002). About half of
participants in Belo Horizonte and Betim are single-time participants (table
1.6).If these data are representative of other participatory budgeting programs,
the empowerment capacity of the process may be dampened.
Nearly 75 percent of respondents participated only one or two times.
This finding is troublesome, because little public learning is likely to occur
where few participants remain involved in the process. Wampler's survey of
eight participatory budgeting programs indicates that first-time participation
rates are higher in more recently established programs (Wampler 2007b). In
municipalities in which participatory budgeting has been used since the
1990s, such as Ipatinga or Porto Alegre, participation is high, but a core
group of activists participates every year. In places where participatory bud-
geting has been in place for many years,restrictions are placed on participation
by activists, who are allowed to run for office only every second or third
year, in order to allow a broader number of people to hold elected office.
However, it may be that a small group of activists rotates the positions
among themselves.

T A B L E 1 . 6 Frequency of Participation in Participatory Budgeting in
Belo Horizonte and Betim, Brazil

Belo Horizonte Betim
Number of times
respondent Number of Percentage of Number of Percentage of
participated respondents respondents respondents respondents

Once 526 54.5 92 49.5
Twice 168 17.4 32 17.2
Three times 78 8.1 19 10.2
Four times 70 7.2 13 7.0
More than
four times 64 6.6 14 7.5
No response 60 6.2 16 8.6
Total 966 100.0 186 100.0

Source: Nylen 2002.

A Guide to Participatory Budgeting 35

Demonstration effects, based on deliberation, negotiation, and imple-
mentation, may also account for the rise in participation (Wampler and
Avritzer 2004). If individual citizens have positive experiences (because their
demands are heard or their proposals selected for implementation), they will
have incentives to participate again. These incentives are short term, imme-
diate (policy changes), and long term (deliberation and accountability), but
they depend, in large part, on the ability of the government to implement
projects selected by participants.
Very few eligible citizens participate in participatory budgeting processes.
Getting citizens to attend meetings remains difficult, for reasons that plague
participation in any public setting. These include the time and financial cost
of attending meetings, general apathy, the lack of awareness of participatory
budgeting, and the perception of partisanship within the participatory
budgeting process. Participatory budgeting has been successful at encourag-
ing participation when municipalities have been able to produce outputs that
reflect the decisions made through the process. Citizens are willing to give
their time to this process if they believe that the outcomes will benefit them.
Most participatory budgeting programs allow citizens to have a say only
on new capital investment expenditures. (Many participatory budgeting
programs claim that participants make decisions on the entire budget, but
there is little evidence that participants make meaningful decisions outside
of discretionary funding.) When analyzing participatory budgeting, it is
important to distinguish between proposed spending and actual spending.
Porto Alegre had the lowest annual budget but allocated the largest
amount to participatory budgeting--$201 per capita in 1996�98. This figure
far exceeded per capita spending in Belo Horizonte ($42) or Recife ($11).
Differences in spending are attributable to the financial health of the munici-
palities, especially debt commitments and personnel expenditures. Porto
Alegre cleaned up its finances, allowing more resources to be dedicated to
investment spending. Belo Horizonte and Recife spent more on debt and
personnel and on investment projects selected outside the participatory
budgeting framework.
Spending outcomes are important indicators of the success or failure of
a program, because they link the demands of participants to the municipal
government's commitment to implementation. Governments that are able
to follow through on spending decisions send clear signals to participatory
budgeting participants and the larger community that they value the choices
made within the participatory budgeting process. Porto Alegre's government
was able to meet nearly 100 percent of its commitments (projects are often
backlogged, but they are generally completed). In contrast, Recife completed

36 Brian Wampler

few projects and spent less than 10 percent of the proposed resources. Thus,
there are positive demonstration effects in Porto Alegre but few in Recife.
Since participatory budgeting programs are geared toward redistribut-
ing public resources, evaluations of participatory budgeting should include
an analysis of where resources are spent within the municipality. Such an
analysis requires that similar data be produced over a number of years to
allow plausible inferences to be made about spending patterns.
Only one study, of Porte Alegre, has measured the distribution of
resources within a municipality (Marquetti 2002). This study combines
10 years of participatory budgeting data and 1991 census data to determine if
there is a relationship between participatory budgeting investments and
lower social indicators.
The results show that participatory budgeting spending in Porto Alegre
has indeed been concentrated in the poorer regions of the municipality. Poor
regions receive more spending per capita than wealthier regions. This is the
most compelling evidence that participatory budgeting is promoting social
justice by increasing the investment of municipal resources in lower-income
neighborhoods. Marquetti (2002) claims participatory budgeting has had a
distributive effect, because Porto Alegre's municipality spent the majority of
its investment resources during the 1970s and 1980s in middle-class neigh-
borhoods. He thus infers that participatory budgeting has had a significant
redistributive effect.

Types of Participatory Budgeting Programs

Participatory budgeting programs have two main tracks. One track,"partici-
patory budgeting public works," focuses on specific public works projects,
which range from the paving of specific streets to the building of day care
centers. This track garners the lion's share of citizens' interest, because it
involves the distribution of resources to specific projects.
The second track, "participatory budgeting thematics," focuses on gen-
eral spending policies. These policies focus on more general trends, such as
allocating increased spending to a particular type of health care program.
These meetings tend to draw better-informed activists, who are more likely
to be part of an issue-oriented social movement.

Public Works Programs

Most participatory budgeting programs initially focus on public works; over
time discussions broaden to include general social policies. There are several

A Guide to Participatory Budgeting 37

pragmatic reasons why governments initially dedicate their time and energy
to specific projects.
First, the focus on specific public works establishes a direct connection
between participation and outcomes. When participants select a specific
project, an expectation is created that the government will implement it.
When the government successfully implements selected projects, it reinforces
the notion that participation in participatory budgeting is a valuable tool
for promoting change (Wampler 2004b; Wampler and Avritzer 2004). The
government of Porto Alegre, for example, has established a track record of
implementing participatory budgeting projects within two to three years.
Participants know that decisions they make will result in government action.
The government's efforts have helped stimulate accountability in Porto
Alegre because participants believe the government will fulfill its promises.
Second, the focus on specific public works represents an effort to allow
communities to define their own development. The underlying assumption
is that citizens understand their own problems better than government officials
and will therefore be able to match proposed public works to their needs. By
giving citizens the power to select public works, participatory budgeting
programs contribute to the decentralization of the decision-making process.
Many neighborhood groups first propose small projects and then expand
the range and size of their demands over time. For example, a neighborhood
association might initially work for street paving but later make demands for
housing projects or the establishment of health centers. Public learning
occurs,especially when the government successfully implements participatory
budgeting projects, as delegates begin to strategize about how to receive
additional (and often larger) projects.
Third, local governments are often responsible for small infrastructure
projects (in wealthier cities, governments can sometimes also tackle major
infrastructure projects, such as housing). In countries where state or provin-
cial governments provide these services, it may be more appropriate to adopt
participatory budgeting at these higher levels of government. Public works
have long been a key source of patronage between governments and com-
munity leaders.By placing public works at the center of participatory budget-
ing, it is hoped that the cycle of patronage politics can be broken. Breaking
the cycle of patronage entails public discussions of public works, access to
technical information, and the eventual implementation of projects. By
removing public works from the clientelistic exchange, governments and
community leaders hope to generate a new type of politics.
Fourth, focusing on specific public works allows participants to gain a
better understanding of what authority and responsibility the municipal

38 Brian Wampler

level of government actually has.Participants learn to understand the division
of authority, which should aid them in directing their demands to the appro-
priate level of government. This educates the population and benefits the
government, as community leaders gain a better understanding of the
government's limited powers. In the municipality of Santo Andre, Brazil,
many participants initially raised concerns about violence and police
corruption. The government, however, did not have jurisdiction over the
police.As participants grew to understand this,they shifted their focus to issues
on which the municipal government had the authority and resources to act.

Thematic Programs

The purpose of participatory budgeting thematics is to further democratize
the policy-making process by letting citizens establish the general priorities
of the municipal government. This encourages participants to analyze and
understand the city as a whole rather than concentrate on problems specific
to their neighborhood. This process is part of the larger empowerment or
"citizenship school"component of participatory budgeting,in which citizens
are encouraged to envision and work for broader social change.
Participatory budgeting thematic meetings allow participants to set
broad priorities for public policies. The first stage of this process requires
that the government provide detailed information on current policies and
spending priorities. The second stage is a series of discussions in which par-
ticipants evaluate the government's priorities. The last stage is the ordering
of priorities by participants. To date, participants do not propose and debate
their own policies but focus on the government's preexisting policies. For
example,participants prioritize the level of spending that should be dedicated
to prenatal care or to the eradication of infectious diseases. They do not, for
the most part, independently propose new policies. This suggests that citi-
zens work closely with government officials to determine the best ways to
spend resources. Governments bring their expertise, and participants signal
their policy preferences.When government officials believe strongly in a policy
program, they strongly argue its merits to convince participants to support
it.Thereisafinelinebetweenprovidinginformationandcoercing participants,
which governments must tread carefully. Often they cross this line. If there
is complicity between government officials and citizens (especially leaders),
participatory budgeting runs the risk that participants simply rubberstamp
the government's policy positions.
The quality of the meetings and debates varies. Some participants are
longtime advocates of particular issues. Their knowledge of other policy

A Guide to Participatory Budgeting 39

issues may be limited. One of the most complicated parts of participatory
budgeting as a policy-making process is that citizen participants have low
levels of information and knowledge about most policy arenas. Broad policy
decisions may be largely acts of rubberstamping, as most participants follow
the lead of the most experienced policy advocates or adopt the positions of
the government. The fact that citizens with low levels of information and
expertise are involved in making important public policy decisions is a clear
drawback of participatory budgeting programs.
The key tension within participatory budgeting thematics concerns
whether the best-informed political activists try to lead or dominate
political discussions. This tension is most acute during the initial years. As
a program is consolidated, the average participant's political knowledge
should expand.
Is public learning actually occurring? This question lies at the heart of
the controversies over participatory budgeting programs. It is not clear
whether participants are gaining the information and knowledge necessary
to become full-fledged policy advocates or whether their participation is
being used to legitimize the policy choices of the government.
Another problem with participatory budgeting is that uninformed citizens
may select policies that do not conform to the constraints placed on the gov-
ernment (that is, they may vote to spend more resources than are available).
There is a danger that uninformed citizens will make decisions that derail a
program (by demanding spending far beyond the capacity of the government,
for example). However, most participants seem to be aware that the overall
impact of participatory budgeting programs is limited by the revenue and
authority constraints the government faces.

Actors and Motivations for Embracing
Participatory Budgeting

Political and social actors have different motivations for promoting and par-
ticipating in participatory budgeting. Motivations range from wanting to
have one's own street paved to wanting to create a deliberative public sphere.
Both self-interested behavior and community-building behavior (behavior
that creates solidarity) can find rewards in participatory budgeting.

Local Governments

Local governments implement participatory budgeting programs to accom-
plish a variety of aims. These include building a base of political support,

40 Brian Wampler

achieving a more equitable distribution of scarce resources, fostering public
learning, and promoting transparency in government.
By its nature, participatory budgeting is a collaborative effort between
citizen participants and government. This makes a strengthened base of
popular political support a natural consequence of effective participatory
budgeting programs.A reformist government is the most likely to successfully
implement participatory budgeting, because of the high level of government
support needed. Participatory budgeting programs subvert clientelism by
providing open, transparent policy-making processes. Reformist govern-
ments gamble that by delegating decision making to citizen participants,
they will weaken old clientelistic politics and strengthen their own positions.
As participatory budgeting takes place outside government itself,its activities
largely bypass the legislature and the multiple patronage networks embedded
therein. This is one of the most controversial aspects of participatory
budgeting programs: legislators have virtually no role in the policy-making
processes.
A second reason why governments adopt participatory budgeting is to
try to increase the distribution of resources to low-income neighborhoods.
The rules of participatory budgeting promote social justice; the emphasis on
participation helps the government build support for redistributing
resources among low-income and middle-class groups. Low-income citizens
have access to greater levels of resources in participatory budgeting, which
allows the government to provide a specific forum to address their needs.
Low-income citizens are not competing against middle- and upper-income
citizens and groups in their efforts to secure desperately needed services and
public works.
A third reason why governments adopt participatory budgeting is that
mobilizing citizens provides opportunities to change their political and
social consciousness. The lack of political knowledge about government,
policy making, and rights among most low-income Brazilians is an obstacle
that reformist governments believe limits social change. Governments will
implement participatory budgeting if they believe that improving the quality
of citizens' political knowledge is an integral part of a more expansive effort
to reform political, social, and economic structures. Many citizens in the
developing world lack basic information on the responsibilities and authority
of different levels of government; governments use participatory budgeting
as a means to provide them with these basic tools.
A fourth reason why governments adopt participatory budgeting is to
promote transparency, in the hope of reducing corruption and bureaucratic
inefficiencies. Participatory budgeting may reduce corruption by increasing

A Guide to Participatory Budgeting 41

the number of citizens that monitor the distribution of resources. Where
corruption is rampant, reformist governments use multiple public meetings
and oversight committees to reduce the likelihood of corruption. In Ipatinga
and Porto Alegre, all participatory budgeting projects are assigned tracking
numbers. Any interested citizen can use a computer terminal at a municipal
government office to check the status of a project and verify if resources have
been spent as promised.

Individual Citizens

Citizens have many incentives to participate in participatory budgeting
programs. First, participatory budgeting increases their access to public
decision-making activities. Public meetings and decision-making processes
reduce the likelihood that overt, clientelistic means will be used to distribute
goods. This is an obvious benefit to citizens who did not gain from clien-
telism under previous government regimes. The public nature of meetings
empowers some citizens to speak out for the first time. This general sense of
empowerment is strengthened even further if citizens can draw a direct con-
nection between their participation efforts and policy outcomes.
A second important incentive for citizens is that they gain access to
information. Informational meetings provide citizens with a broader under-
standing of government, governmental responsibility, policy, and policy
making. Budgets and policy making are often viewed as "black boxes" in
which inputs and outputs are unknown to all but a handful of government
officials. Participatory budgeting programs provide a structure for citizens
to gain the necessary information to develop a better understanding of their
political and administrative environments. In addition to budgetary infor-
mation, citizens gain access to technical information about subjects such as
zoning and land-use laws. The complex sets of rules involved in these issues
are often beyond the reach of the average citizen. Participatory budgeting
programs offer the opportunity for citizens to work with officials in the
bureaucracy to resolve legal and technical problems.
A third benefit of participatory budgeting for citizens is the direct rela-
tionship between participation and the quality of services provided. Citizens
select public works, directly shaping their neighborhoods. They approve
technical plans, for the installation of sewer systems or the construction of
new housing units, as well as oversee project implementation. In Belo
Horizonte all technical plans must be presented to neighborhood forums.
After discussion and clarifications, which may require the plan to be
redrawn, the neighborhood forum must approve the plan. This helps ensure

42 Brian Wampler

that contractors provide the goods and services they promised. This process
is widely believed to improve the quality of services, because it reduces the
likelihood that contractors will try to cheat on their contracts.

Civil Society Organizations

The primary incentive for CSOs, such as social movements or neighborhood
groups, to participate in participatory budgeting is indirect. Since one of the
criteria for the distribution of goods is the number of citizens who attend
meetings, the more citizens CSOs are able to mobilize, the more goods and
resources their neighborhood is likely to receive.A relationship between mobi-
lization and outcomes is established, strengthening the importance of CSOs.
A second reason why CSOs participate is that participatory budgeting
programs provide them with the opportunity to build broader networks of
supporters. Participation provides CSOs with contact with potential allies,
increasing opportunities to build broader social and political coalitions.
Since many of the specific demands negotiated within participatory bud-
geting originated from associations around basic issues (housing or sewage
problems), it is incumbent upon the associations to negotiate with other
associations. One of the drawbacks of participatory budgeting, discussed
below, is that there is an increased potential for competition among CSOs.
Rather than create bonds of solidarity, contact can heighten conflict.
A third reason why CSOs participate is to influence policies. Neighbor-
hood associations shape the neighborhood's infrastructure. Associations
work with government technocrats and NGO specialists to design develop-
ment plans. Issue-oriented social movements participate in participatory
budgeting to shape broader public policy. The process gives them the oppor-
tunity to work with government officials to influence short-term funding as
well as long-term planning. The close working relationship provides issue-
based social movements with many opportunities to influence policy out-
comes. Of course, this relationship may not be wholly positive for the CSOs.
Closer ties to the state have the potential to drastically alter the character and
goals of the social movements. This is a tension that government officials
and CSOs are continually forced to address.

Nongovernmental Organizations

Participatory budgeting programs provide a mechanism for NGOs to work
with citizens and government to tackle pressing social problems. In some
municipalities, NGOs play a direct role, sitting on a governing or oversight

A Guide to Participatory Budgeting 43

board or acting as mediator between the government and participants.
When NGOs play a direct role in the process, they tend to promote citizen
empowerment and transparency in government.
In other municipalities,NGOs act in an advisory role,providing support
to participants. Many NGOs have staffs of professionals with strong technical
and administrative skills. Architects, accountants, social workers, and other
specialists are able to understand policy proposals and their implications
more easily that the average citizen. The NGOs' distance from government
gives them the opportunity to promote the general values of participatory
budgeting while keeping an eye on government to guarantee that it is work-
ing for the citizens. One NGO in Porto Alegre, Cidade, publishes a monthly
report on participatory budgeting for citizen-delegates and citizens in general.
It monitors spending and policy decisions, acting as a watchdog as well as an
advocate of the participatory budgeting program.
NGOs also play a prominent role in the initial empowerment or learn-
ing meeting. Because of their skill and experience in public education, NGOs
are often contracted by government to provide this service. This can create
a certain tension between NGOs and participants, because it blurs the role
of the NGO.

Business Community

The business community may support participatory budgeting programs
because these programs promote transparency, reduce corruption, and
increase efficiency. While participatory budgeting programs do not inher-
ently or necessarily involve fiscal reform, the increased attention on the
budget often leads the government to take better care of the city's financial
health. Better financial health is an indirect consequence of participatory
budgeting programs.
Within the business community, some contractors and builders benefit
directly. The selection of projects and the systematic ordering of the projects'
implementation allow contractors to bid in an open and fair system. Small
contractors benefit, because many of the projects selected through the
participatory budgeting process tend to be small. Contractors no longer pay
kickbacks and bribes to ensure that their projects will actually be funded and
implemented. Instead, the timing and ordering of the projects become part
of the public record. Of course, businesses that benefited from closed and
corrupt practices are not enthusiastic about participatory budgeting.
When participatory budgeting programs are consolidated as the principal
policy-making method, business associations must participate in order

44 Brian Wampler

to secure funding for projects. A neighborhood business association that
wants to have streets paved or lighting installed, for example, would have to
organize its members to attend meetings to press their demands.

Administrative Reform

While the reform of bureaucracy was not initially considered to be a vital
element of participatory budgeting programs, it has emerged as an unin-
tended consequence that strongly influences the success of the process.
Participatory budgeting contributes to administrative reform in three ways.
The first is by decentralizing the administration. This tends to start with
the physical decentralization of the municipal administration, as branch or
regional offices are established. Branch offices provide citizens direct and
easy access to government and administrative officials. This is especially
important in outlying neighborhoods, where the poorest residents tend to
live. Meetings are held at the neighborhood level rather than in the city center,
which makes it easier for citizens to overcome time and financial costs long
identified as barriers to participation.
The decentralization of decision-making venues is also an important
step. Decisions are no longer made by a small group of political and technical
elites located within the confines of the city government but in public
forums at the local level. This provides citizens with unprecedented access
to professional and technocratic bureaucrats. Citizens are able to work with
these bureaucrats to navigate the complex world of policy making.
Decentralization allows for targeted information to be provided to
relevant groups. Through the branch offices, technocrats develop better
ideas of the types of information participants need to make informed
choices. For example, citizens who live in a mountainous region may need
information about drainage and water flows; citizens in the urban center
may require information about the costs and complexities of overhauling
decaying infrastructure.
The second way in which participatory budgeting contributes to
administrative reform is by integrating different bureaucratic units into the
policy-making and implementation processes. Administrative agencies,
such as the departments of health or education, cannot operate as isolated
units within the participatory budgeting process. They must work closely
with the planning agency and with participatory budgeting participants to
define their policy agendas. New investments cannot generally be under-
taken without the explicit approval of participatory budgeting participants.
This requires different departments to work with community leaders to

A Guide to Participatory Budgeting 45

design projects.City agencies must work together to coordinate the timing of
projects to ensure that they are completed in the most efficient method
possible. This requires coordination over a number of years to ensure that
drainage, paving, housing, and other projects are implemented according to
the plans designed by urban planners and participatory budgeting participants.
Within the government there must be a concerted effort by politicians
and bureaucrats to implement the selected projects. Government officials
must gain control of the bureaucracy to ensure, for example, that technical
plans are drafted, contracts are prepared, and implementation occurs
according to established schedules. This intensive, hands-on process was not
anticipated by participatory budgeting's founders, but it has helped revitalize
and reform existing bureaucratic structures.
The third important component of administrative reform is the creation
of a more transparent relationship between the business community and the
government. Participatory budgeting establishes projects that will be imple-
mented over a two- or three-year period. Contractors and builders know
which projects will be implemented and are able to plan more efficiently.
The fact that bribes no longer have to be paid to have a project implemented
reduces the cost of business, increases profit margins, and fosters govern-
mental credibility.

Limitations of Participatory Budgeting

Several limitations to participatory budgeting programs reduce its overall
impact on social justice, public learning, and administrative reform. While
there are important differences in how participatory budgeting programs
function in different municipalities and states, the limitations discussed
below appear to be present in most cases. These limitations suggest that
participatory budgeting programs have a moderate capacity to challenge
social and political exclusion while promoting social justice. Participatory
budgeting programs are an important step toward political inclusion and
greater social justice, but they are by no means a magic bullet.
The first limitation stems from the focus on specific public works, which
diminishes the impact of the public learning or empowerment sessions.
Many participants are less interested in learning about rights, the fiscal
responsibility of the government, or broader social policies than they are in
obtaining a small infrastructure project.
This is the principal Catch-22 of participatory budgeting. Participatory
budgeting programs flourish when citizens discover that the specific decisions
they make in regional meetings will be implemented.The message is clear: the

46 Brian Wampler

government values your time and energy. While this seems to be a necessary
first step to encourage participation, it associates participatory budgeting
programs with the distribution of specific goods. After improvements are
made, the community organization stops participating. The community
receivesthedesiredpublicgood,whichwasthereasontheyoriginallyorganized.
Participants immediately exit the program and demonstrate little interest in
working with it. In such a case, public learning is low and participation is
geared toward short-term and instrumental ends; participants are not
engaged in public learning processes but focused on how they can secure
specific resources for their community.
A second limitation is the dependence of participants on the mayor's
office. While participatory budgeting programs directly incorporate civil
society actors in the policy-making process, the government remains the
principal actor. It organizes meetings, provides information, ensures that
bureaucrats meet with citizens, and guarantees that selected policies will be
implemented. The influence of the mayor and the governing coalition is
substantial.
The lack of a strong commitment to participatory budgeting by
government leaders makes it difficult for participatory budgeting programs
to succeed. In Recife, for example, the mayor began to use participatory
budgeting as a means to distribute public monies for the yearly carnival.
Instead of holding open, transparent meetings, he manipulated the release
of funds so that "friendly" participants would benefit. Nonparticipating
citizens and "unfriendly" citizen-delegates did not have access to the public
resources. Participatory budgeting participants expressed concern that if
they did not act a certain way they would be "boycotted" by the government.
This does little to empower citizens and may just be a new form of clientelism.
A third limitation concerns the role of long-term planning. Many
participatory budgeting participants are interested in securing short- to
medium-term public works projects. The focus on specific public works
makes it more difficult to generate discussions on planning for the future of
the city. Several municipal governments have tried to stimulate discussions
and develop long-term plans, but the results have been limited. The com-
plexity of the issues involved requires that citizens have substantial technical
and analytical skills to weigh different arguments. Participatory budgeting
programs slowly build these skills, but it may take years for participants to
develop a grasp of the complexities of the proposed solutions.
A fourth limitation is the emphasis on local issues and local public policies.
Many participants, including experienced political and social activists, spend
their time and energy on the intricacies of local public policies. This reduces
the amount of time they are able to dedicate to regional, national, or global

A Guide to Participatory Budgeting 47

problems. While participants dedicate their efforts to securing changes in
local public policies, the principal problems their communities face are often
related to unemployment, violence, or the lack of educational opportunities.
Participatory budgeting does not provide the opportunity for participants
to challenge the underlying reasons for their social and economic exclusion.
In Recife many active participatory budgeting participants devoted 5�10
hours a week to participatory budgeting. But when asked what the major
problem in their neighborhood was, they responded "unemployment." The
participants, mainly women, worked in participatory budgeting in the hope
that they could improve the day-to-day conditions of their neighborhoods,
but their greatest concerns focused on broader socioeconomic change that was
far beyond the scope of participatory budgeting.
Citizens and governments hope that a participatory budgeting program
will increase awareness of the broader,global social problems that affect Brazil's
urban poor.There are,however,no guarantees that participants will make the
leap from addressing their communities'lack of basic infrastructure to under-
standing and challenging the broader socioeconomic forces that shape their
lives.While this is obviously much to ask of participatory budgeting partic-
ipants,itisclearlythegoalof thegovernmentsandthemostactiveparticipants.
Finally, there is the danger that participatory budgeting programs may
be manipulated due to the central role played by the mayor's office. If city
agencies, bureaucrats, or elected officials wish, they may try to use partici-
patory budgeting programs to advance their own agendas. Nondisclosure of
key information, the lack of implementation of selected public policies, or
the weakening of citizen oversight committees are all potential ways that the
program can be manipulated. Some participatory budgeting programs in
Brazil at the municipal and state levels have been rejected by social movements
and NGOs due to the government's interference.

How and Where Can Participatory Budgeting
Be Implemented?

Can participatory budgeting programs be implemented by governments
in other countries? Can the idea be adopted in other regions of the world?
Government officials contemplating adopting participatory budgeting
should ask themselves a few questions:

Is there sufficient discretionary funding to allow citizens to select specific
public works?
Can participatory budgeting programs be used to increase tax collection?
Is the government prepared to delegate authority to citizens?

48 Brian Wampler

Will participatory budgeting programs subvert traditional patronage
networks? Does the government want to do so?
Can participatory budgeting help the government establish new bases of
political support?
Is the government willing to try to reform the local bureaucracy?
How viable is delegating decision-making authority along political and
administrative lines?

At the heart of any consideration must be the viability of the delegation of
decision-making authority along political and administrative lines. Partic-
ipatory budgeting is a cumbersome process that often takes several years to
run relatively smoothly. If a government faces intense political pressures
from other political parties or the media, the cumbersome and public nature
of participatory budgeting may exacerbate governability problems. Govern-
ments must have sufficient political flexibility to engage citizens in an inno-
vative policy-making process. Furthermore, the government must have the
resources and capacity to reform the bureaucracy so that the program will
actually be implemented according to the established rules.
Financial flexibility and independence is a second issue to be considered.
For example, do Mexican municipalities or Indian states have enough inde-
pendent financial resources to incorporate citizens directly into the policy-
making process? If a government has few financial resources or little flexibility,
it should consider how a focus on financial and budgetary issues will affect
its overall political agenda. If the government lacks financial autonomy, can
it use a type of participatory budgeting to have citizens help prioritize some
types of social spending? In this case,a participatory budgeting program could
be used as an educational tool rather than as a means to allocate scarce
resources.
When governments are unable or unwilling to implement participatory
budgeting programs, NGOs can play a vital role, by disseminating informa-
tion and monitoring government spending. NGOs have played an important
role in promoting participatory budgeting programs throughout Brazil.
They can work with governments to implement participatory budgeting
programs, or they can set up parallel monitoring programs.
One initial challenge is to engage social movements and NGOs on
seemingly arcane issues of taxation, representation, and more efficient policy
making. Before the implementation of a participatory budgeting program,
it would be helpful if civil society activists begin to question how public
resources are being used and how they could be used. The first step would
be to focus on the budget and social spending.

A Guide to Participatory Budgeting 49

While there is no set or minimum level of civil society activism neces-
sary to establish a participatory budgeting program, the program is more
likely to flourish if there are networks of citizens and CSOs that will strongly
support it. During the founding phase, many of the initial participants tend
to be political activists. Higher levels of participation help legitimize a
government's reform efforts. Preexisting networks often lay the foundations
for progressive governments and citizens to support innovative policy-
making forums.
Previous experiences with decentralization may make bureaucrats more
amenable to accepting administrative reforms. Governments must be able
to reform the bureaucracy so that it will be open, transparent, and oriented
toward citizens. When citizens participate in the policy-making process,
bureaucrats lose some of their power. If local government has discretionary
resources available, it is more likely that it can embark on a participatory
budgeting program. Local governments need to have control over their own
finances in order to implement a reform policy of this type.

Policy Implications

The results of participatory budgeting programs vary widely. While many
participatory budgeting programs, especially those in initial stages of devel-
opment, have had mixed results, programs that have endured for more than
five years have spawned important changes. To examine the most significant
policy implications, it is necessary to return to the three central tenets of
participatory budgeting: public learning and active citizenship, social justice,
and administrative reform.

Participatory Budgeting Increases Public Learning and Promotes
Active Citizenship

Participation in participatory budgeting programs tends to increase over
time. Citizen participation steadily rises, with significant jumps often occur-
ring after the third year. Participation rises more quickly when the govern-
ment commits significant support and resources to participatory budgeting.
Participation appears to rise because citizens realize that there is a direct con-
nection between the time they dedicate to participatory budgeting and
changes in policy outcomes. Citizens who did not initially participate are
drawn into the process as it becomes clear that the principal way to secure
public works or changes in broader social policies is through participatory
budgeting. In Belo Horizonte and Porto Alegre, participatory budgeting was

50 Brian Wampler

expanded to include projects and programs that would attract the middle
class. In Belo Horizonte political activists who had long favored clientelism
had to retool their political strategies to provide resources for their neigh-
borhoods.Traditional political organizers could no longer rely on clientelism
but had to mobilize and deliberate in new ways.
Participatory budgeting programs act as "citizenship schools." The first
stage of the participatory budgeting process, at the beginning of the yearly
budgetary cycle, consists mainly of information meetings. These meetings
provide governments, NGOs, and the most well-informed activists the
opportunity to discuss matters pertaining to the budget, government authority
and responsibility,taxation,and citizenship rights (social,political,and civil).
New citizens are inundated with information, while longtime participants
sharpen their own understandings. This is where NGOs play a large role,
working with longtime participants to improve their political strategies
while providing help to new participants.
Citizenship rights play an important role because participatory bud-
geting participants address issues of government authority and citizens'
duties. Participants, especially citizens with a long history of political
activism, draw on the rights guaranteed by the 1988 Brazilian Constitution
to support their arguments during the negotiation stages. During the initial
"empowerment" meetings, participants are taught about their rights, their
duties as citizens, and the responsibility of the government. The extension
of citizenship rights, governments and participants assert, depends on the
strengthening of community ties and the dismantling of the entrenched
social, political, and economic positions that separate individuals in many
developing countries. Participatory budgeting programs provide an
opportunity for citizens to forge solidarity bonds based on the similarity of
their demands. Community ties, between groups and individuals, may be
strengthened as the programs enable them to address their problems and
look for collective solutions. If citizen demands for rights are one of the
bedrocks of democracy, then participatory budgeting is helping strengthen
the consolidation of democracy.
The "bus caravan trip" is one of the best examples of this effort.
Representatives from each neighborhood visit all proposed public works
within their region so that they can personally evaluate the social need for a
proposed project. Participatory budgeting delegates are known to change
their positions when they visit a project site where social needs appear much
greater than at sites of other proposed projects. When the bonds of solidarity
are emphasized and promoted, the participatory budgeting program fosters
a stronger sense of community.

A Guide to Participatory Budgeting 51

Participatory budgeting gives traditionally excluded citizens the
opportunity to voice their demands in a formal public sphere. The
legitimization of their demands and the ability (right) to raise contentious
issues in a public arena are important steps forward in breaking down rigid
social hierarchies.

Participatory Budgeting Promotes Social Justice

The resources allocated through the participatory budgeting program tend
to be implemented in low-income areas. Neighborhoods or subregions with
lower levels of infrastructure and higher poverty rates receive more
resources than better-off subregions. The Quality of Life Index, based on
income, education, physical infrastructure, and social services provided,
forms the basis for the distribution of resources. It guarantees that the
poorer regions of a city receive more resources than better-off neighbor-
hoods. The division of resources along regional and subregional lines is an
effective instrument for redistributing resources to low-income and under-
serviced neighborhoods. Participatory budgeting helps distribute wealth to
poorer areas of a municipality,and it allows the poorest members of the com-
munity to decide how to spend resources in their community.
Between 1996 and 2003, the participatory budgeting program in Porto
Alegre spent $400 million on projects selected by participants (Wampler
2007b). The vast majority of these resources went to underserviced and
poorer districts. While it is impossible to establish precisely the volume of
resources allocated to low-income areas, it is possible to document that the
poorest regions of Porto Alegre received funding that had not been previ-
ously available. It is also possible to confirm that low-income neighborhoods
in Belo Horizonte received more resources than did middle- and upper-
income neighborhoods. Low-income neighborhoods also received more
than they had traditionally received. The policy implication is clear: when
participatory budgeting programs function well, they affect the lives of
lower-income individuals and communities.
A second way in which participatory budgeting programs promote
social justice is through the development of thematic decision-making bod-
ies. Citizens concerned with the lack of health care services or poor quality
education can express their demands in participatory budgeting forums.
The debates may lead the government to allocate more resources to the
underserviced areas.
Evidence suggests that governments that are already dedicated to spending
more resources in poorer neighborhoods implement participatory budgeting

52 Brian Wampler

programs. It is not clear whether the increase in social spending stems from
the participatory budgeting program or the political ideology of the pro-
gressive government. While it is impossible to separate the political agenda
of a reformist government from the workings of participatory budgeting,
participatory budgeting programs tend to co-exist with significant changes
in social spending. Participatory budgeting helps the government make bet-
ter allocation decisions in substantive policy areas.
Social justice is also achieved by means of more efficient and community-
oriented policies. Less corruption, fostered by transparent processes, helps
ensure that public resources will be used more effectively. More efficient use
of public resources most directly affects poor and low-income citizens, as a
greater number of projects can be implemented. These projects often have
an immediate impact on the quality of life for a neighborhood or an under-
serviced policy arena. The policy implication is clear: participatory budgeting
helps promote transparent processes that reduce government corruption
and waste. Highlighting budgetary issues within participatory budgeting
creates a spillover effect, as parts of the budget that fall outside the purview
of participatory budgeting also come under increased scrutiny.
Finally, social justice is advanced through the entrance of traditionally
excluded groups and citizens into vital decision-making venues. While this
is not a material benefit directly linked to social justice, the creation of this
institutional sphere provides low-income citizens with the opportunity to
address their political and social demands in a formal environment. Tradi-
tionally excluded citizens have the opportunity and right to participate in
new decision-making venues. Their decisions and their votes result in
specific changes in their communities. Being granted the opportunity to
make decisions that shape their lives and the lives of their fellow citizens is
an extraordinarily empowering process for low-income and previously
excluded citizens.

Participatory Budgeting Spurs Administrative Reform

Implementing new decision-making processes requires changes to the
bureaucracy so that implementation conforms to the new criteria.In successful
participatory budgeting programs, considerable time and effort are dedi-
cated to decentralizing the government. Officials are appointed to aid the
administration of each district. The reorganization of local administrative
processes facilitates contact between the government and the population.
These officials act as intermediaries between citizens and the technical staff.

A Guide to Participatory Budgeting 53

In all successful participatory budgeting programs, a substantial effort has
been made to develop close contacts between participants and bureaucrats.
Technical information, vital to the implementation of any public works
projects, becomes part of the public debate. Citizens need to understand the
specific requirements for building a road or installing drainage. This infor-
mation, traditionally available only to bureaucrats, is provided to citizens so
that they can make informed decisions. Clear, rational, and systematic rules
for the implementation of projects are also established. This reduces the
power of the most powerful or well-entrenched bureaucrats, who are no
longer able to manipulate the allocation of public monies. The establishment
of a clear set of rules provides all interested parties--citizens, government
officials, bureaucrats, businesspeople--with the knowledge that policy deci-
sions made in participatory budgeting's public forums will be translated into
actual policy outputs. The implementation process, while not 100 percent
transparent, is generally open to any interested citizen. Any citizen can check
on the status of a project (planning, bidding, and implementation).
Participatory budgeting encourages government officials to reform
local government. Government officials have a vested interest in doing so
when they gain positive responses from the voting public, members of their
political parties, or national politicians. Instituting a successful participatory
budgeting program requires that bureaucrats work with citizens in new
ways. There is an incentive to reduce waste and corruption so that additional
resources are available for participatory budgeting projects. Governments
that are heavily invested in participatory budgeting will also reform their
administrative units.

References

Abers, Rebecca. 1998. "From Clientelism to Cooperation: Local Government, Par-
ticipatory Policy, and Civic Organizing in Porto Alegre, Brazil." Politics and Society
26 (4): 511�37.
------. 2000. Inventing Local Democracy: Grassroots Politics in Brazil. Boulder, CO:
Lynne Rienner.
Avritzer, Leonardo. 2002. Democracy and the Public Space in Latin America. Princeton,
NJ: Princeton University Press.
Baierle, Sergio. 1998. "The Explosion of Citizenship: The Emergence of a New Ethical-
Political Principle in Popular Movements in Porto Alegre, Brazil." In Cultures of
Politics/Politics of Cultures: Re-visioning Latin American Social Movements, ed. Sonia
E. Alvarez, Evelina Dagnino, and Arturo Escobar. Boulder, CO: Westview Press.
Baiocchi,Gianpaolo.2001."Participation,Activism,and Politics: The Porto Alegre Experi-
ment and Deliberative Democratic Theory." Politics and Society 29 (1): 43�72.

54 Brian Wampler

------. 2003a. "Participation, Activism, and Politics: The Porto Alegre Experiment." In
Deepening Democracy: Institutional Innovations in Empowered Participatory Governance,
ed. Archon Fung and Erik Olin Wright. London: Verso.
------. 2003b.Radicals in Power: TheWorkers' Party and Experiments in Urban Democracy
in Brazil. London: Zed Books.
Cabannes, Yves. n.d. Municipal Finance and Participatory Budgeting: Base Document.
Harvard University, Graduate School of Design, Department of Urban Planning
and Design, Cambridge, MA.
Marquetti, Adelmir. 2002. "Democracia, equidade e effciencia, o caso do or�amento
participativo em Porto Alegre." In A inova��o democratica no Brasil, ed. Leonardo
Avritzer and Zander Navarro. S�o Paulo: Cortez.
Nylen, William. 2002. "Testing the Empowerment Thesis: The Participatory Budget in
Belo Horizonte and Betim, Brazil." Comparative Politics 34 (2): 127�45.
------. 2003a. Participatory Democracy versus Elitist Democracy: Lessons from Brazil.
New York: Palgrave Macmillan.
------. 2003b. "An Enduring Legacy? Popular Participation in the Aftermath of the
Participatory Budgets of Joao Monlevade and Betim." In Radicals in Power: The
Workers' Party (PT) and Experiments in Urban Democracy in Brazil, ed. Gianpaolo
Baiocchi. London: Zed Books.
Torres, Ana Clara, and Grazia de Grazia. 2003. Experi�ncia de or�amento participativo no
Brasil: Periodo de 1997 a 2000. S�o Paulo: Editora Vozes.
Wampler, Brian. 2000."A Guide to Participatory Budgeting."Paper presented at the third
conference of the International Budget Project,Mumbai,November 4�9.http://www.
internationalbudget.org/cdrom/papers/systems/ParticipatoryBudgets/Wampler.pdf.
------. 2002. "Or�amento participativo: Uma explica��o para as amplas varia��es nos
resultados." In A inova��o democratica no Brasil, ed. Leonardo Avritzer and Zander
Navarro. S�o Paulo: Cortez.
------. 2004a. "The Diffusions of Participatory Budgeting across Brazil." Paper
presented at the annual meeting of the Latin America Studies Association, LasVegas,
October 7�9.
------. 2004b. "Expanding Accountability through Participatory Institutions: Mayors,
Citizens, and Budgeting in Three Brazilian Municipalities." Latin American Politics
and Society 46 (2): 73�100.
------. 2007a. "Can Participatory Institutions Promote Pluralism? Mobilizing Low-
Income Citizens in Brazil."Studies in Comparative International Development 41(4):
57�79.
------. 2007b. Participatory Budgeting in Brazil: Contestation, Cooperation, and Account-
ability. University Park, PA: Pennsylvania State University Press.
Wampler, Brian, and Leonardo Avritzer. 2004. "Participatory Publics: Civil Society and
New Institutions in Democratic Brazil." Comparative Politics 36 (3): 291�312.
------. 2005. "The Spread of Participatory Democracy in Brazil: From Radical Demo-
cracy to Participatory Good Government." Journal of Latin American Urban Studies
7 (Fall 2005/Winter 2006): 37�52.

Citizen Participation in
Budgeting: Prospects for
Developing Countries
d o n a l d p. m o y n i h a n

T his chapter examines the potential of citizen participation as
part of the budgeting process in developing countries. The
first section examines why participation is important and assesses
the prospects for participation in a developing-country setting.
The second section identifies ways of fostering broad and mean-
ingful participation in developing countries, providing examples
of participation during different stages of the budget process. The
third section examines the perspective that governments have
toward participation. The last section summarizes the chapter's
main conclusions.

Why Is Participation Important?

To understand the role and importance of participation in budgeting,
it is important to understand why participation itself is important.
Most arguments in support of participation portray it as a means of
improving both the performance and accountability of a bureaucracy
that is outdated, unrepresentative, and underperforming (Barber
1986; King, Feltey, and Susel 1998).1 These arguments appear par-
ticularly relevant for developing countries.

56 Donald P. Moynihan

Calls for governments to overturn exclusionary bureaucratic conven-
tions rest largely on a normative perspective (Olivo 1998). The democratic
ideals celebrated in the normative approach are often vague or implicit, cre-
ating"mandates that do not always specify what the participation is intended
to achieve"(Kweit and Kweit 1981,p.8).Such ambiguity prevents the creation
of clear standards by which to judge participation efforts and careful reform
prescriptions. This section seeks to add some clarity to the normative per-
spective by presenting a typology of participation goals based on normative
values that allow participation efforts to be categorized. This framework is
applied to developing countries, using examples of participation during the
development of Poverty Reduction Strategy Papers.

Arguments for Participation

The literature on participation catalogues the virtues of civil society and pub-
lic deliberation of issues (Cooper 1984; Crosby, Kelly, and Schafer 1986; Fox
and Miller 1996; Frederickson 1982; Habermas 1989, 1996; Putnam 1993;
Stivers 1994). A result is an increased call for direct citizen participation in
public decision making (King, Feltey, and Susel 1998). Citizen participation
occurs when citizens or their representatives (who are not elected officials)
interact with and provide feedback to government at the policy formulation
or implementation stage of governance. Four interrelated arguments sup-
port the rise of public participation: postmodern discourse theory, disillu-
sionment with bureaucracy, the search for a democratic ideal, and the need
for participation in developing countries.

The postmodern argument

Citizen participation is frequently characterized as an inevitable outcome of
a logical movement from insulated, bureaucratic modes of governance to
more open, transparent, and participatory approaches. Democratic theorists
propose that current societal conditions and an understanding of the
dynamics of individuals in relation to their governments in liberal democ-
racies make it ever more likely that citizens will seek to involve themselves in
public decisions through discourse (Fox and Miller 1996; Maier 1994;
Wamsley and Wolf 1996).
One broad rationale underlying such a movement is a shift in citizen
values in a"postmodern"age. Cross-time and cross-country surveys provide
evidence of a worldwide shift to "postmodern values," including a distrust
of formal institutions such as government and political parties and a desire

Citizen Participation in Budgeting: Prospects for Developing Countries57

for more participatory democracies (Inglehart 1997). Proposed reasons for
the value shift include the increased mobility of individuals, the weakening
of the traditional family structure, and the erosion of values that structure
produced, including a benevolent view of authority (Kweit and Kweit 1981).
Societal change, particularly increased education, leads to greater demand
for involvement and access to information (Thomas 1995). Access to infor-
mation is facilitated by new technologies. Citizens therefore enjoy both the
will and the means to break the monopoly and centralized control over pub-
lic information enjoyed by the government (Cleveland 1985). Given these
changes, the isolated hierarchical structures of the traditional bureaucratic
form appear increasingly out of step with the societies they serve. Many of
these societal changes are more clearly apparent in richer countries, but
there are additional rationales for looking to participation in the developing
setting as well.

Disillusionment with bureaucracy

Disillusionment with the traditional governance model of hierarchical
bureaucracies and insulated public servants and a belief that participation
checks administrative power have spurred interest in participatory
processes. For many years the Weberian hierarchical-bureaucratic model has
been attacked from various sides as lacking responsiveness. Bureaucratic
organizations have proved unable to create an inclusive relationship with the
citizenry (Zajac and Bruhn 1999). The value of bureaucracy stems from its
expertise, which puts it in conflict with the democratic or representative
values that underpin the idea of participation.
Popular unease with the perceived growth in government and
acknowledgment of the discretionary authority of bureaucracies gave rise
to a search for alternative modes of democratic accountability and bureau-
cratic control. One of the main alternative models of governance is the
participatory model, which involves the "search for more political, demo-
cratic, and collective mechanisms for sending signals to government"
(Peters 1996, p. 47).
Public participation operates as an external check on bureaucracies,
whose power grew in the twentieth century. Recent proposals for partici-
pation appear equally distrustful of bureaucrats and elected officials, both
of which are part of the "representative bureaucracy" (Barber 1986).
According to this view, "representative bureaucracy" undermines indi-
vidual responsibility for beliefs, values, and actions and is incompatible
with freedom, because it delegates and alienates political will. In place of

58 Donald P. Moynihan

"representative bureaucracy," advocates of participation support the develop-
ment of "strong democracy," characterized by increased citizen participation
(Barber 1986). Local governments are particularly suited to this model. As
Peters (1996, p. 58) notes, "Local governments, by their very size, make
participation more meaningful. Moreover, local governments tend to use
more mechanisms that permit direct citizen involvement than do national
or regional governments . . . in ways that would probably be impractical for
national governments."

The search for the democratic ideal

The idealistic nature of the goals of participation, particularly the yearning
for the democratic ideal, explains much of its appeal. Minimalist treat-
ments of participation (for example,Easton 1990) emphasize the importance
of participation in preventing popular alienation from government and
maintaining the stability of the political system. A more active approach,
typical of normative theory, shows greater concern for participation that
produces benefits to citizens and offers them the chance to fulfill the"demo-
cratic wish"to exert real influence on the governing process (Morone 1998).
These ideals are closely associated with the fulfillment of citizen rights in a
democratic society.
Support for democratic ideals appears to have grown with the rise of
postmodern values. Such ideals are often considered in abstract terms and
tend to evoke affective rather than cognitive responses from individuals.
Any form of citizenship beyond simple legal status requires active citizen
involvement in public matters and the community (Cooper 1984). Partici-
pation serves to establish the worth of individual citizens, allowing them
to feel a sense of ownership and take an active part in controlling their
surroundings and developing their capacity to act as citizens (King and
Stivers 1998; Kweit and Kweit 1981). The process of public deliberation is
expected to generate benefits not only to individuals but also to society,
in terms of democratic legitimacy and a deliberative political culture
(Habermas 1996).

The needs of developing countries

Many of the arguments presented so far are abstract. But in developing
countries the need for participation is very real. Participation is particularly
important because it fosters good governance, promotes transparency,
increases social justice by involving the poor and excluded, and helps indi-
viduals become better citizens.

Citizen Participation in Budgeting: Prospects for Developing Countries59

p a r t i c i p at i o n f o s t e r s g o o d g o v e r n a n c e . Poorer
countries desperately need accountability and competent performance;
participation is one way to achieve these goals. Proponents of participation
in richer countries share a disappointment with representative govern-
ment. In poorer countries criticism of the status quo is more pertinent.
Proponents of participation in poorer countries point to corruption,
opaque resource allocation, the failure to deliver basic services, and a
power structure that offers nonelites little opportunity to have their views
heard. The criticism of representative government in many poor coun-
tries is not so much that it has failed to promote citizen involvement but
that it has failed to meet its basic responsibilities. A failure to govern in
an open, competent, and predictable fashion has also stymied economic
development.
Some scholars (such as Lynn 2002) argue that participation undermines
institutions of representative government. Such claims are less convincing
in the developing-country context, where citizen involvement can force
comparison between clientelist or corrupt representatives and participatory
forums (Heimans 2002). Political systems that have a record of poor govern-
ance may decide to foster participatory forums in order to increase the
government's legitimacy (Moynihan 2003; Olivo 1998). The more represen-
tative the budget process appears to be, the more credible it will be in the
eyes of citizens and external stakeholders.
In addition, some forms of participation can strengthen the ability of
the legislative branch and external parties, such as the media and interest
groups, to check the centralization of power in the executive branch. Where
legislators have little experience, little understanding of the budget process,
or inadequate information upon which to make judgments, NGOs that pro-
vide budget analysis can strengthen the ability of one branch of government
to require accountability of the other.
Another argument for participation in a developing-country context
is that it is a desired and natural outgrowth of trends toward fiscal decen-
tralization (Robinson 2004). Fiscal decentralization is intended to reduce
central control in favor of local preferences that foster allocative effi-
ciency. The promise of fiscal decentralization is therefore also a promise
of participation, and the success of one depends on the other. The good
governance argument also links directly to overarching economic devel-
opment concerns. Top-down investment strategies and public policies
that fail to incorporate the preferences and oversight of those they serve
will struggle.

60 Donald P. Moynihan

p a r t i c i p at i o n p r o m o t e s t r a n s p a r e n c y. Related to
the good governance argument is the view that participation provides add-
itional sources of information not available through traditional political
institutions. Participation is particularly useful in developing countries
because it not only provides information to the government on citizen pref-
erences but can also provide an alternative guide to external stakeholders
who normally deal directly with government.
Participation and transparency may go hand in hand in developing-
country governments. F�lscher, Krafchik, and Shapiro (2000, p. 43) note that
in South Africa "a closed budget drafting process and lack of legislature
amendment powers severely restrict legislature and civil society participa-
tion in the budget process.Whereas some legislatures have carved a space for
themselves in monitoring the implementation of the budget, they are also
largely unable to effectively scrutinize budget plans before passing the
budget. In turn this restricts civil society input into the budget."

p a r t i c i p at i o n i n c r e a s e s s o c i a l j u s t i c e . Many of
the arguments for participation rest on the normative claim that citizens have
a right to a say in decisions that affect their future in any democratic system.
The exclusion of the poor has been so extreme in developing countries that
some deliberate form of empowerment is needed.

pa r t i c i pat i o n h e l p s i n d i v i d u a l s b e c o m e b e t t e r
c i t i z e n s . Participation can benefit citizens and society more broadly
by providing"citizenship schools" for people who have had limited involve-
ment in civic life (Wampler 2000). Participation helps citizens learn about
their rights, express their views to representatives, and see these views affect
policy and action. Through participation citizens learn the basic language
and practices of governance. NGOs and governments can play a vital role in
offering advice to citizens on how to understand what government policies
mean for them, how to present their views, and how to assess government
services. As citizens become skilled in the art of democracy and social capital
builds, their ability to hold their governments accountable and to foster high
performance should increase (Putnam 1993).

The Need for Real Participation

The arguments for participation overlap and complement one another to
some degree.The literature on participation also suggests that not all modes of

Citizen Participation in Budgeting: Prospects for Developing Countries61

participation are created equal. Some are better able to foster accountability
and represent the views of the public than others. A typology of the goals of
participation must be developed to evaluate its different forms.
Pro-participation arguments portray participation as a channel for
direct democratic voice in decision making. These arguments call for direct
and open involvement of citizens in decisions that affect them. A primary
goal of this approach is to increase the direct representation of all citizens.
All citizens, not just those who are qualified by election, position, expertise,
influence, or money, should be able to provide input.
According to Habermas (1989), participation processes must include
all affected by a decision and disregard the social status of the partici-
pants. The first element of the typology, therefore, is the range of citizen
involvement (the extent of representative participation). The range of
involvement is narrow when only a handful of citizens or a particular
socioeconomic group dominates decision making. The range becomes
broader with the involvement of interest groups. It is broadest when
large numbers of citizens representing different socioeconomic groups
are directly involved. The involvement of more citizens helps reduce the
uncertainty inherent in any effort to make decisions about the future
(Hellstr�m 1997).
A second primary goal of participation is that government provides for
genuine discourse with its citizens and takes their input seriously, which
Pateman (1989) labels full participation. Participation should be authentic
and have a genuine impact on public decisions (Fox and Miller 1996); the
use of participatory budgeting forums is of little benefit if the government
does not listen.Such forums may be attractive to government for the symbolic
value they provide.As Wampler (2000, p. 3) notes, among local governments
in Brazil that have adopted Porto Alegre's model of participatory budgeting,
"there is wide variation in the success, as some administrations only play lip
service to the programs."
Under full participation each member of a decision-making body has an
equal say in the outcome of decisions. The second aspect of the typology is,
therefore, the level of citizen involvement, measuring the extent to which full
participation occurs (Arnstein 1969; Pateman 1989). Three levels of partici-
pation can be distinguished (table 2.1).Pseudo participation suggests a token
effort at fostering public involvement. Partial participation suggests that
citizens are consulted but have limited impact on public policy. Full partici-
pation indicates that citizens have an authentic discourse with government,
and their views are taken into account.

62 Donald P. Moynihan

T A B L E 2 . 1 Typology of Citizen Participation

Representativeness

Level Broad Narrow

Full
Decisions Public officials make decisions, Public officials and selected
but citizens have strong influence. interest groups make decisions.
Participation Large, diverse groups of citizens Interest groups exert significant
engage in meaningful discourse influence; most citizens lack
with government. opportunities to participate.
Partial
Decisions Public officials make decisions; Government elite make decisions;
citizens have limited influence. interest groups have limited
influence.
Participation Large, diverse groups of Interest groups exert influence;
citizens engage in limited most citizens lack opportunities
discourse with government. to participate.
Pseudo
Decisions Public officials make decisions. Public officials make decisions
in nontransparent manner.
Participation Participation is symbolic but Participation is symbolic,
involves large, diverse groups involving only a small number
of citizens. of citizens.

Source: Adapted from Moynihan 2003.

Fostering Broad and Meaningful Participation in
Developing Countries

Fostering broad and meaningful participation in developing countries is
particularly difficult because governments are not inclined to share deci-
sion-making power with the public. The limited capacity of many of the
actors also limits participation. The poor generally have limited education,
a low level of literacy, and little familiarity with the policy process. Govern-
ments often cite this lack of capacity as the reason why they resist participa-
tion by the poor.
These concerns may be overstated. The quality of participation
depends a great deal on how participation is organized, how citizens are
asked to express their views, and how they are presented with information
about topics such as resource limits and tradeoffs. Even in developed coun-
tries, where participants' education and their knowledge of government are
presumably higher, there is wide variation in the quality of participation.

Citizen Participation in Budgeting: Prospects for Developing Countries63

This variation can be explained chiefly by how the participation forum is
organized (Moynihan 2003). Organizers of participation processes need to
consider the capacity of citizens and design a system that maximizes the
quality of involvement (as they did in the case studies discussed in the
next section).
If low citizen capacity is indeed a problem, it must be addressed before
the participation process gets started. If capacity cannot be improved,
another solution must be found. One capacity-improving task is to provide
citizens with basic information: what participation hopes to achieve, what
is at stake, and how participation contributes to the decision-making
process. An alternative to capacity building of citizens is for NGOs to pro-
vide technical analysis of budgets and policy proposals. NGO staff tend to
be among the best educated among the population and therefore may be
classified as elite. Without their help, however, citizen views may go unrep-
resented or be represented in a very limited fashion. Given the capacity
limitations of the public, it is reasonable to expect that NGOs will play an
important role and that it may not always be possible to achieve the goal of
broad participation. Donors can help by investing in the capacity of local
NGOs (Heimans 2002).
Even where participation is fostered, citizens may focus only on narrow
issues that affect them directly. They may be unwilling to make tradeoffs and
determined to exclude some groups. (Higher-income individuals, for exam-
ple, were more likely to participate in Porto Alegre's participatory budget
processes [Navarro 1998].) A basic function of organizing participation is
fostering a process that discourages these tendencies. This involves encour-
aging citizens to think about their interests broadly, to make tradeoffs, to
recognize the limits on resources, and to avoid sectionalism.
While participation forums rest on the assumption of civic duty, they
are more likely to succeed if they can tap into motivations of self-interest.At
the same time, such forums must limit the downsides of self-interest. The
traditional budget process also faces this danger, as agencies compete for
scarce resources. Some of the lessons from the traditional budget process
may be helpful. Hard and explicit budget constraints can help identify the
limits on resources available and prompt citizens to make tradeoffs.
Another danger is unrealistic expectations. Citizens may assume that
once they have a voice in making decisions, dramatic changes will occur
immediately--unemployment will disappear, poverty and inequality will be
reduced. Such expectations are unrealistic, especially if participation is
occurring chiefly at the local level. Part of the challenge to organizers is
communicating the limits on available resources.

64 Donald P. Moynihan

Participation in Poverty Reduction Strategy Papers

One way of assessing participation in developing countries is to assess par-
ticipation in the development of Poverty Reduction Strategy Papers
(PRSPs). As the World Bank sought to establish a program of debt forgive-
ness for heavily indebted poor countries, it asked governments to develop
PRSPs based on an open and participatory process (McGee and Norton
2000). The initiative created something of a natural experiment in partici-
pation, testing the willingness and ability of governments to engage in broad
and meaningful participation when tangible rewards are at stake. The stud-
ies that have examined these efforts suggest that fostering participation in
developing countries is difficult.
In their analysis of PRSP participation in 10 African countries, McGee,
Levene, and Hughes (2000) suggest that governments conceived of partici-
pation as requiring consultations rather than broad citizen involvement.
Among the weaknesses they observed were"poorly conceived, rushed, exclu-
sive, and badly organized consultation procedures, failure to provide essen-
tial information to participants, inadequate time allowed for participants to
analyze drafts before commenting on them, and lack of transparency in
selecting participants" (p. 7).
Andrews (2004) finds that officials in Mozambique claimed that partic-
ipation efforts were consistent with a tradition of public consultation but
were actually characterized by a bias toward including groups with technical
or financial backgrounds and strong connections to government. Broader
civil society, NGOs, local governments, and citizens were poorly represented.
Government departments defended their approach by pointing to the diffi-
culty of interacting with civil society within a limited time line. NGOs that
were consulted complained that they were included only to rubberstamp
decisions that had already been made. This suggests that the involvement of
some participants was for symbolic purposes only. Another indicator of the
symbolic approach was the very limited time for consultation, which pro-
vided little room for actual dialogue.
Andrews also notes a bias in favor of the national capital. The govern-
ment was more likely to involve citizens who could easily reach the capital.
Local leaders had little sense of the purpose of the planning and little possi-
bility to access resources. They were therefore not motivated to hold the
government accountable for the way resources were allocated."Citizens have
no idea that these funds even exist, or that a plan to improve their lives is in
place, and thus they have no expectations or demands of government. Their
relationship with the authorities can best be described as a `hope and pray'

Citizen Participation in Budgeting: Prospects for Developing Countries 65

approach" (Andrews 2004, p. 27). "There is a distinct lack of any kind of
meaningful participation in the ongoing development or implementation
of PARPA [the Action Plan for the Reduction of Absolute Poverty] or in the
monitoring and evaluation of the strategy" (p. 29).
A similar pattern is evident in Honduras. "The major obstacle for civil
society participation in the PRSP process is that the central government will
not enter into a dialogue with NGOs," writes Forner (2002, p. 117). "With-
out the direct input from the municipalities and localities, governments lack
the capacity to develop a realistic poverty-reduction plan, and their current
PRSPs reflect the absence of input." An analysis of PRSP participation in
Bolivia, Malawi, and Rwanda concludes that the process was rushed, poorly
organized, and dominated by elite groups (Painter 2002).
These reviews suggest that participation has fallen well short of its
goals. Participation appears relatively narrow, excluding large sections of
society based on geography or income. It also appears to be consultative
at best, characterized by rushed processes that allow little prospect for
meaningful dialogue.

Participation in Budgeting

There is no agreement on what participatory budgeting means or how to go
about it: the study and dissemination of the idea of participatory budgeting
are following practice rather than the other way around. In developing coun-
tries around the world, innovative ways are being found to increase public
involvement in the budgeting process.As these examples and others become
better known, their influence can be expected to grow.
Participatory budgeting aims to infuse the values of citizen involve-
ment into the most basic and frequently the most formal procedure of
governance--the distribution of resources through the budgeting process.
Citizen involvement can foster accountability, transparency, and more
effective distribution of resources. Proponents of participatory budgeting
also see it as a way of challenging the exclusion of nonelite groups from the
process. Wampler (2000, p. 1) describes the ambitious and multiple goals
of participatory budgeting:

These programs are designed to incorporate citizens into the policy-making
process, spur administrative reform, and distribute public resources to low-
income neighborhoods. Social and political exclusion is challenged, as low-
income and traditionally excluded political actors are given the opportunity to
make policy decisions. Governments and citizens initiate these programs to

66 Donald P. Moynihan

promote public learning and active citizenship, achieve social justice through
improved policies and resources allocation, and reform the administrative
apparatus.

This section examines the potential for participation at each of the four
different stages of the budget process: budget preparation and budget approval
(or resource allocation), budget execution, and audit and performance eval-
uation. The approach provides lessons from a series of case studies on how
participation might be organized at each stage of the budget process.

Participation in resource allocation

The preparation and approval stages of the budget process are tradition-
ally bottom up in nature, driven by agencies with some basic guidance on
budget constraints and priorities from elected officials. Agencies tend to
budget based on previous allocations. This maintains rigidity in the dis-
tribution of resources. Agencies usually submit their proposed budget to
a central budget office, which amends the budget before forwarding it to
the legislature. Once the budget reaches the legislature, the budget
approval process begins. It is still possible for participation to occur at this
stage, but the basic procedures of approval are centralized in legislative
committees. The modes of participation that can have an effect at this
stage (committee hearings, lobbying of members, providing analysis of
the executive budget proposal) do not lend themselves to direct citizen
involvement. In political systems in which the executive branch is dominant,
it is unlikely that the legislature will radically change the proposed budget.
For these reasons there is greater opportunity for the active participation
of citizens during the budget preparation stage than during the budget
approval stage.

p a r t i c i p at o r y b u d g e t i n g i n p o r t o a l e g r e . An
example of participation in setting priorities and proposing allocations can be
seen in the participatory budgeting processes in more than 100 municipalities
in Brazil. The prototype is Porto Alegre, the capital of the Brazilian state Rio
Grande do Sul, which began using participatory budgeting in 1989. Before
the introduction of participatory budgeting, the city government was domi-
nated by a clientelistic approach,in which public resources were used to main-
tain a political machine (Fung and Wright 2001).
A key event leading to the use of participatory budgeting was the elec-
tion of the Worker's Party candidate as mayor. The party had campaigned on
the issue of democratic participation and redistribution of public spending

Citizen Participation in Budgeting: Prospects for Developing Countries 67

toward the poor. When it assumed power, it faced a bankrupt municipality
and a disorganized bureaucracy (Wampler 2000).
In Porto Alegre the mayor's office is responsible for initiating the budget
bill (figure 2.1). The municipal government then organizes a series of public
meetings by region.The schedule of meetings is made publicly available.Addi-
tional information is distributed to the public, often in the form of a Quality
of Life Index, which provides measures of basic indicators of well-being.
Two meetings a year occur in each of 16 regions. The meetings include
broad representation. "City executives, administrators, representatives of
community entities such as neighborhood associations, youth and health
clubs, and any interested inhabitant of the city attend these assemblies, but
only residents of the region can vote in them. They are jointly coordinated
by members of municipal government and by community delegates" (Fung
and Wright 2001, p. 13).
The first meeting includes a discussion of how the previous budget was
spent. Meeting attendees choose citizen-delegates, who are responsible for
articulating regional priorities.The number of delegates chosen by each region
in the municipality is determined by turnout at the meetings. This motivates

Participants Government

First round regional
meetings
Mayor's office

March
to
June Neighborhood
meetings

City agencies

Second round regional
meetings

Technical and
administrative support
June
to Neighborhood

September meetings

Municipal budget Proposed budget
council (September)

Source: Adapted from Wampler 2000.

F I G U R E 2 . 1 Participatory Budgeting Process in Porto Alegre, Brazil

68 Donald P. Moynihan

mobilization and turnout at the regional level. Citizen-delegates hold neigh-
borhood meetings, usually weekly, to assess the region's spending priorities.
At the second set of regional meetings, citizen-delegates report their
findings from neighborhood meetings. Two delegates and a substitute are
selected to represent each region at the municipal budget council, called the
Participatory Budgeting Council. This council also includes 10 delegates
elected to represent the city as a whole on specific thematic issues, a union
representative, a representative from the union of neighborhood associa-
tions, and two representatives of central municipal agencies. The council,
which meets at least once a week from July to September, develops a set of
proposals that it delivers to the mayor on September 30.
The mayor can accept the budget or ask the council for revisions
(a request that the council can override with a two-thirds majority). The
mayor's office incorporates the proposals (which usually deal with public
works) in its proposed budget. The mayor presents the budget to the local
legislature, which usually approves it.
Throughout the process the municipal government works as a partner
with the Budgeting Council. Bureaucrats offer logistical and technical sup-
port, and the municipal government sets and publicizes meeting times. City
agencies provide seminars on budgeting to Budgeting Council members and
other interested delegates.
The multiple steps in the process allow for very broad participation. The
municipality estimates that more than 100,000 people--8 percent of the
population--were involved in the 1996 budget process (Fung and Wright
2001). Citizen participation appears to have had measurable benefits,
including the expansion of access to basic public services such as sewerage
systems, water, and paved roads. Wagle and Shah (2002) argue that the
increased transparency of the budget process has reduced the motivation to
avoid taxes, increasing municipal revenues.

c i t i z e n s u m m i t s i n wa s h i n g t o n , d . c . Governance
problems in Washington, D.C., were so severe in the 1990s that the city was
dubbed "America's worst-run city" (Elliott 1995). Nearly three-quarters of
residents viewed their municipal government as corrupt (Riley 1989).
The use of citizen summits in Washington, D.C., illustrates the potential
for citizen participation in the context of strategic planning and budgeting.
The case also offers insight into the use of technology to facilitate participa-
tion. Technological innovations may not be feasible in poorer regions in
developing countries, but they are becoming more affordable and are a use-
ful example of a way to foster dialogue.

Citizen Participation in Budgeting: Prospects for Developing Countries69

In 1999 the city's mayor,Anthony Williams, established a series of citizen
summits to involve the public in the strategic planning and budget process.
The Office of Neighborhood Action was created to organize citizen participa-
tion that would link to district strategic planning. It initiated a goal-setting
process with the mayor's office and developed a four-page tabloid version
of the strategic plan, which it presented to citizens before and during the
summit. The document informed citizens of the basic issues in order to
improve the quality of the dialogue.
The citizen summit lasted more than seven hours and included the devel-
opment of city-level and neighborhood vision statements,discussion of city-
wide priorities and the draft strategic plan, and identification of action items
for each neighborhood.2 Efforts were made to ensure that all elements of
Washington's diverse citizenry were reached. The summit was open to all
comers,and summit literature and translations of the proceedings were avail-
able in Chinese, Korean, Spanish, and Vietnamese. Demographic surveys
found the summit to be racially representative of the city's population.
The nearly 3,000 people who attended the summit were divided into
tables of 10. Trained facilitators sat with each group to facilitate meaningful
dialogue. The messages developed at each table were recorded using net-
worked laptop computers, which fostered discussion among the individuals
in each group and consensus about those messages. The computers also
allowed the mayor to receive and respond to the messages during the forum,
thus providing greater interaction. Polling keypads allowed the mayor to ask
citizens to vote on any question at any time during the summit. The instanta-
neous results were displayed on large screens at the front of the room.Citizens
prioritized citywide goals and ranked them according to level of support. The
data collected from the keypads were cross-referenced with demographic data
collected at the beginning of the program, when participants completed a
short survey.
Input from the meeting helped shape the format of the budget and the
allocation of resources. In preparing budget requests, each department asked
for resources to pursue the strategic issues raised at the summit and codified
in the strategic plan.The meeting also pushed for suggestions on how to solve
problems at a more local level. Residents from different wards were encour-
aged to express their opinions on neighborhood issues. The summit became
the first step for more localized district and citizen planning and action efforts
through a series of Strategic Neighborhood Action Plans. These plans were
designed to link to actual resource provision and operations at the micro
level.Management teams made up of agency officials were appointed for each
ward and tasked with addressing persistent neighborhood problems raised

70 Donald P. Moynihan

in these local plans. Goals from the district plan were linked to performance
standards for senior officials.Each department head was given a performance
contract and a public performance scorecard, consisting of a one-page list of
key performance targets and measurements of success or failure in achieving
those targets. Targets incorporated goals that had been raised at the summit
and were of relevance to the particular department.
Following the summit, a revised strategic plan was presented to citizens
at a second summit. About 1,500 citizens (60 percent of whom had partici-
pated in the first summit) attended. They had the opportunity to hold the
mayor accountable for the revisions and offer comments before the plan was
completed. The final version of the strategic plan bore the clear imprint of
the meetings. The front section of each issue-driven chapter identified spe-
cific citizen concerns and priorities and the resulting strategic goals. Each
goal was tied to a specific action item that described what implementation
steps were taking place to achieve the goal. A performance target accompa-
nied each action item. The plan identified the agency responsible for the
target and the date by which the target would be achieved.

b u d g e t m o n i t o r i n g b y a n n g o i n s o u t h a f r i c a .
By analyzing allocations in a budget, stakeholders can see where government
spends money. They can also determine if allocations match stated goals and
how specific groups are affected.
Such an approach is exemplified by the Institute for Democracy in
South Africa (IDASA), an NGO that combines advocacy, training, and
research. IDASA specializes in budget analysis, providing detailed policy
analyses of proposed resource allocation choices. In a country where leg-
islative institutions are poorly staffed, such expertise ensures that policy
capacity is not the monopoly of the executive branch of government. IDASA
recognized that"one of the fundamental obstacles to democratic consolida-
tion was the flow of critical, timely and accessible information from citizens
to the legislature and back again"(Krafchik 1999). To meet this need, it took
upon itself the task of providing this information.
IDASA started by helping train the wave of inexperienced legislators
who came to power in the first post-apartheid elections of 1994. In 1995
IDASA began analyzing the budget from the perspective of women (the
Women's Budget) and children (the Children's Budget), an idea inspired by
the United Nations conventions on the rights of women and children. The
purpose is to assess whether expenditure and taxation policies are in line
with the goals of these conventions. IDASA uses researchers from other
NGOs who specialize in women's and children's issues. It gives them

Citizen Participation in Budgeting: Prospects for Developing Countries71

budget training and puts them in contact with a source (usually from the
government or legislature) who can provide access to information and
advice on how to use expert analysis effectively (Budlender 1999). For the
Women's Budget, IDASA partnered with the Community Agency for Social
Enquiry and other groups.
IDASA strengthens its advocacy efforts through research and training
on gender-sensitive budgeting. Its research looks at the extent to which
budgets and associated policies are gender sensitive. Its training builds the
capacity of organizations, legislatures, and government agencies to conduct
gender-sensitive budget analysis. Training fosters the sharing of research
information and empowers others to undertake research themselves.
Knowledge of advocacy is passed along through training sessions.
Research conducted by IDASA generates a range of products. The
Women's Budget analyzes how allocations affect gender issues. It suggests
how reorganizing spending priorities could improve gender equity and
general welfare. IDASA has also examined the relationship between gender
and revenues, finding that despite progress toward removing discriminatory
aspects in the tax code "there are still significant elements of discrimination
against women in South Africa's taxation policy" (Smith 2000, p. 1). IDASA
has published a series of working papers that examine how different national
government departments use resources in ways that affect women (see, for
example, Sadan 2005).
IDASA makes frequent use of the media. It responds to every budget
with a press release. IDASA members make themselves available for inter-
views with the media, targeting newspapers with broad circulation and
those likely to be read by policy makers (Krafchik 1999). They record a
radio program to reach a still wider audience. IDASA also actively uses the
Internet (http://www.idasa.org.za/) to disseminate its analyses. In all public
relations efforts, IDASA attempts to tailor its message to the audience. It
prepares the Women's Budget and Children's Budget in two forms (a longer,
more complex version and a simpler version) so that information is acces-
sible to a broad range of the public.

Participation in budget execution

Budget execution involves the disbursement and spending of resources. In
theory, the intent of the budget approved by the legislative branch is carried
out. In practice, this does not always occur, for two main reasons.
First, governments tend to provide bureaucrats with some measure of
discretion in the allocation of resources. The degree of discretion depends
very much on the nature of the budgeting system. One extreme is a pure

72 Donald P. Moynihan

line-item budget system, in which the legislature identifies spending items in
great detail, specifying every machine to be purchased, every employee to be
hired, every well to be dug. At the opposite end of the spectrum is a program
budget, in which legislatures specify general goals but let bureaucrats decide
how to spend the resources allocated to reach those goals. Most governments
fall somewhere in between,specifying major items to be purchased but leaving
the details to bureaucrats.
Regardless of the approach, participation matters. Where bureaucrats
face a strict line-item approach, citizens can track exactly what should be
provided and assess whether resources were actually spent as promised.
Where bureaucrats have a high measure of discretion, citizens become more
important players. They may undertake lobbying activities and form part-
nerships to influence the shape of disbursement decisions.
Second, actual spending is often at odds with the stated intent of the
government. Sometimes this may be due to spending cuts as a result of
declines in revenue. In this case, money previously allocated is simply not
available (World Bank 1998). In other cases, money allocated to service
providers is siphoned off as it goes through various administrative levels.

t r a c k i n g s p e n d i n g i n u g a n d a . Despite a doubling of
spending on primary education between 1992 and 1995 (mostly on
salaries), student enrollment appeared to remain stagnant in Uganda
(Reinikka and Svensson 2001). One explanation was that the schools were
not actually receiving the money allocated.
To determine where spending on education was going, the World
Bank, in collaboration with the Ugandan government, the local Economic
Policy Research Centre, and an independent Ugandan consulting firm,
MSE Consultants, surveyed 250 government schools, randomly selected
from 19 of Uganda's 39 districts. The survey compared allocations to
schools by the central government with the individual schools' records of
funding received.
The results showed that between 1991 and 1995, only 13 percent of non-
salary spending on education reached the schools that the funds were intended
to help (Reinikka and Svensson 2004). Most schools received no capitation
grants at all. Education offices at the district level had been keeping most of
the nonsalary funding--as well as the bulk of the tuition fees paid by parents.
Although the problem was widespread, some schools were more likely
than others to suffer the effects of leakage. Smaller schools, schools serving
children from poorer families,and schools with less qualified teachers received

Citizen Participation in Budgeting: Prospects for Developing Countries73

less capitation funding (Reinikka and Svensson 2001). This suggested that
leakage was less likely to affect schools that actively mobilized and used their
political resources.
As a result of the survey findings, changes were made. The government
reported amounts of school transfers to local media. Schools and districts
were required to make public the amount of government money they
received. The expectation was that the provision of this information to local
parents would discourage the leakage of funds for noneducation purposes.
With this information, parents and teachers were more likely to mobilize
and demand the full funding that government had allocated.
Schools were also given more direct control over resources. Allocations
were deposited directly into individual school accounts, and schools became
responsible for buying their own goods rather than relying on central pur-
chasing at the district level. A 1998 survey by the government found that
these measures were effective in increasing the flow of funding to schools.
By 2001, 80 percent of budgeted funds were reaching the schools, as intended
(Reinikka and Svensson 2001).

d e m y s t i f y i n g t h e b u d g e t a n d t r a c k i n g s p e n d i n g
i n i n d i a . In the western state of Gujarat, India, the NGO Development
Initiative for Social and Human Action (DISHA) created a relatively simple
yet effective way to monitor implementation of budgeted allocations. The
state budget provides very specific line-item detail on where public resources
will be spent and what resources will be spent on. For DISHA this provided
an opportunity to hold the government accountable and to demystify what
appeared to be an arcane budget process to all but a few government officials.
DISHA is an NGO with very broad membership. Its more than 80,000
members include tribespeople, miners, and forest, agricultural , and construc-
tion workers. Tribal and other indigenous groups, who live in the hilly regions
in Gujarat, make up about 15 percent of the state's population (Mistry 2000).
Since the early 1980s, India's national government has sought to target
spending toward tribal regions through a Tribal Area Sub-Plan. While
spending increased, the level of economic development and infrastructure
spending remained low. DISHA sought to understand where the resources
were going.
DISHA examined the budget for allocations to specific projects, such as
the construction of roads and the digging of village wells. (The state budget
details allocations for all sectors, schemes, and programs to the village level.)
It then surveyed village authorities and asked them whether and to what

74 Donald P. Moynihan

extent the project had actually been implemented. M. D. Mistry of DISHA
(1999) summed up the approach as follows:

One can really find out, which we do in our office, that the money that was put
in was spent. We write to the village saying that this money, the 10,000 rupees,
was spent in constructing a road from your village to the main road linking
your village to the main road. Please let us know whether this road is built or
not. And you get an answer from them. . . . So it is easy to find out whether the
money is spent or not, and if not, then raise it a) in assembly b) you write and
c) give it to the press and raise it, thereby holding them accountable.

By surveying villages, DISHA raises awareness of political promises and pro-
vides village authorities with valuable information about what resources
they should have received. DISHA is then able to incorporate the village's
political support in efforts to lobby for these resources (World Bank 2001).
DISHA has also cultivated the support of local officials by offering
budget training to village representatives (sarpanches). Some 300 current
and former sarpanches from about 140 different villages took part in a
budget workshop in 2000. They learned skills such as how to read and
understand budgets, identify allocations for their villages, recognize and dis-
cuss local investment needs, and plan lobbying and protest efforts.
DISHA has complemented budget execution analysis with other types of
analyses that contribute to the approval stage. In analyzing a budget, DISHA
identifies what spending will benefit the poor, points out any errors in calcu-
lations or in fiscal discipline, and looks at the relationship between public
statements by the finance minister and proposed allocations. Some of the
information DISHA develops is very basic and would be taken for granted in
most budget systems. For example, DISHA lists resources allocated for
each department and how they compare with previous allocations. It also
identifies major areas of new spending or spending cuts. These analyses are
converted into short budget briefs that aim to equip legislative members,
the media, and civil society with basic facts and questions about resource
allocation priorities (World Bank 2001). This information, written in local
languages and tailored to local interests, is also disseminated to the public,
usually through schools in remote areas.
DISHA disseminated its analysis to members of the state legislature and
the media. It found that many legislative members were sympathetic to their
claims but had trouble understanding the budget. The information DISHA
provided gave legislators facts and figures they could use to assess the
efficacy of disbursements. As M. D. Mistry of DISHA notes,"The elected
members of the party at various levels felt `empowered' with handy

Citizen Participation in Budgeting: Prospects for Developing Countries 75

information and began to participate in the debate on public expenditure.
[Provision of this information] shifted the debate on public expenditure
from the selected few to a majority of members, thus improving governance
through improved/enlightened debates" (Mistry 2000). DISHA's analysis of
the execution process in one budget cycle thus influenced the approval
process in the next cycle.
DISHA's activities have raised the quality of debate on the budget and
grounded it in facts and research. Media coverage is better informed. The
finance minister takes greater care to ensure that statements match alloca-
tions and that allocations reach intended projects. The demystification
process that DISHA fostered has improved basic communication about
spending and priorities and enhanced the transparency of the budget process.

Participation in audit and performance evaluation

The final phase of the budget process is its evaluation. Traditionally, this
meant that spending was audited to ensure consistency with intended
spending. More recently, the audit function has come to incorporate assess-
ment of the outputs generated by spending and suggestions for improving
performance (Barzelay 1997). There is scope for citizen participation at this
stage, particularly in evaluating performance.
A basic performance benchmark is the satisfaction of citizens and the
quality of their interaction with the public sector. By administering surveys
on access and satisfaction, NGOs can gauge the success of policies.
In Bangalore, the capital of the state of Karnataka, India, such informa-
tion is presented in the form of performance report cards (Paul 1998).Citizen
surveys in Bangalore were first undertaken in 1993 by an individual, Samuel
Paul, with help from a private sector marketing firm. The following year Paul
formed the Public Affairs Centre (PAC), an NGO dedicated to improving the
quality of governance in India. PAC created report cards in Bangalore in
1999 and 2003. The report cards are based on citizen surveys that examine
satisfaction with government services in urban areas in Bangalore. Paul
(1998, p. 3) describes the basic logic and validity involved in using report
cards that draw on the experience of the users of a service:

A report card represents an assessment of the public services of the city from
the perspective of its citizens. The latter are the users of these services and can
provide authentic feedback on the quality, efficiency, and adequacy of the serv-
ices and the problems they face in their interactions with the service providers.
They may not be able to comment on the technical features and standards of
the services or to evaluate the overall performance of a provider. But they are
eminently qualified to say whether the service meets their needs, and whether

76 Donald P. Moynihan

the agency is responsive, corrupt, reliable, etc. When customers rate an agency
on different dimensions of the service, it provides a basis for judging its per-
formance as a service provider.

The first round of surveys selected a random sample of homes in each
of six regions of the city. It classified respondents as middle or upper income
(807 households) or lower income (327 households). Respondents were
asked to describe the quality of the services they had received in the past six
months: their overall satisfaction, staff behavior, how many visits were
required to solve a problem, and whether the problem was actually solved.
The 1999 round of surveys expanded the number of participants to 1,339
middle-income households and 839 households from slum areas.
The surveys covered basic services,such as water supply,electricity,garbage
removal, hospitals, and police services. The 1993 and 1999 surveys found low
overall levels of satisfaction with services. Relative to middle-income house-
holds, the poor had to visit agencies more often to solve a problem, were more
likely to have to pay a bribe (usually to police),and were less likely to have their
problems solved. Despite these problems, the poor tended to show similar
levels of satisfaction with services, presumably due to lower expectations.
Upon completion of the 1999 survey, PAC sought a way to increase the
impact of the survey results. It developed the report card format and aggres-
sively promoted the report cards to the media. The cards were unveiled at a
press conference that generated significant media coverage. All the major
newspapers in Bangalore published the findings, and the high-profile Times
of India ran a weekly feature for two months on issues raised by the cards
(PAC 2003). PAC appreciates the importance of the media, which "has
become an active stakeholder in making Bangalore citizens more aware and
putting the spotlight on issues that need to be addressed. The big change has
been the wide involvement of resident associations and civic groups in
engaging with city agencies in campaigns and initiatives for improving serv-
ice delivery" (PAC 2003, p. 9). Paul (1998, p. 17) describes how a reporter
from the Times of India used report card information to put the spotlight
on service quality and corruption in hospitals:

Armed with the information provided by the report card, the reporter con-
cerned went to the public hospitals and interviewed senior officials and doc-
tors to get their side of the story. She then went on to talk to patients to get a
confirmation on the report card findings. Her report on the subject in the
newspaper was on the front page and generated a public debate ... that went on
for several days. The message was loud and clear that the abuses and extortion
being practiced in the city's public hospitals should not be tolerated. Within a
few weeks, some nurses in one of the public hospitals were arrested on charges
of corruption and negligence in a child delivery case.

Citizen Participation in Budgeting: Prospects for Developing Countries77

The report cards also generated a response from the government. "The
responses from agency heads and senior government officials were polite but
lukewarm except for a few agencies,"according to Paul (1998,p.13).But accord-
ingtoWagleandShah(2002),fourof theeightagenciesresponsiblefortheserv-
ices attempted to reform themselves or expand citizen feedback mechanisms.
PAC tried to foster both improvement and openness by interacting with
agency officials. It briefed the agencies on the survey results and organized
workshops.In one session public officials met with one another to discuss the
efforts they were making to address criticisms. In another session represen-
tatives from the agencies met with the public and discussed the problems
raised by the report cards.The chief minister of Karnataka created a"Bangalore
Agenda Task Force" that included prominent city residents in an effort to
offer responses to the problems identified. The Bangalore City Corpor-
ation also promoted an informal network of NGOs and city officials called
Swabhimana (self-esteem) (Paul 1998). The network discussed ways of solv-
ing problems and identified new problems as they emerged. PAC played a
coordinating role in this network. It also advised the corporation on how to
establish a system by which citizens can bring their grievances directly to the
government and see them redressed. This led to training officials on how to
provide citizens with feedback. After a day-long collaboration with PAC,
hospitals in Bangalore agreed to establish help desks to provide better cus-
tomer service to patients.
The 2003 round of report cards surveyed more than 1,700 households.
These surveys found increased satisfaction with almost all agencies, a lower
incidence of problems, and less corruption (figure 2.2)."The performance of
these agencies over the last 10 years is a picture of significant improvement
in satisfaction of users of services. Of the nine agencies on which citizens of
Bangalore provided feedback, all have received satisfaction ratings above 70
percent this time in contrast to less than 40 percent in 1999"(PAC 2003, p. 3).
PAC argues that the oversight it provided helped matters but that polit-
ical response to the problems was also important."It is clear that without the
kind of political leadership and vision displayed by the Chief Minister [of
Karnataka] in the past four years, this outcome would not have been easy to
achieve" (PAC 2003, p. 8).
The report card approach has been expanded to the state level, to other
Indian cities, and to other countries, including Bangladesh, the Philippines,
Ukraine, the United States, and Vietnam. In the United States, university
professors and journalists investigate and grade the capacity of government
in a variety of management settings, including financial management,
information management, and human resources (Ingraham, Joyce, and
Donahue 2003).

78 Donald P. Moynihan

94 92 96
100 85
73 73 73 78 77
80 67

60
41 47 42
34 34 32 32
satisfied 40 25
16 14
% 20 5 6 9
4 n/a 1 n/a
0
BMP BESCOM BWSSB BSNL government police BDA BMTC RTO
hospitals

agencies

1994 1999 2003

Source: PAC 2003.
Note: Table represents overall satisfaction across three report cards in general households. BMP = Bangalore
Municipal Corporation, BESCOM = Bangalore Electric Company, BWSSB = Bangalore Water Supply and Sewer-
age Board, BSNL = Bharat Sanchar Nigam Limited, BDA = Bangalore Development Authority, BMTC = Banga-
lore Metropolitan Transport Corporation, n/a = not available, and RTO = Road and Transport Authority.

F I G U R E 2 . 2 Citizen Satisfaction with Government Services in
Bangalore, 1994�2003

The Government's Perspective on Public Participation

The normative literature on participation fails to acknowledge the practical
aspects of participation and tends to overlook the importance of govern-
ment administration in implementing participation (Moynihan 2003). This
section examines the government viewpoint. It proposes that public officials
are less attuned to normative goals of representative and meaningful citizen
involvement than to concerns about perceived costs and benefits. They
therefore take an instrumental perspective on participation. Efforts to
increase public participation need to take into account the factors that
shape governmental attitudes toward participation. The government per-
spective is crucial, as the degree to which public officials either create
barriers or promote access to participation forums and public decisions
shapes the costs and benefits that citizens consider when deciding whether
to participate.

Why Government Matters

Government administrators, even when mandated to implement participa-
tion, have a great degree of control over how participatory activities are
structured and the impact of the input collected from participation. As
Thomas (1995, p. 11) observes:

Even when they accept the imperative [of participation], public managers and
policy planners must still choose when,how often,and to what extent to involve

Citizen Participation in Budgeting: Prospects for Developing Countries 79

the public. Despite frequent managerial complaints about the constraining
effects of requirements for public participation, these requirements have usu-
ally been limited to directing managers to involve the public, leaving the form
and extent of that involvement to the discretion of the administrators.

Administrators have substantial power in determining how much influ-
ence to share (the level of participation) and which groups or individual citi-
zens to involve (the range of participation). All parties in the participation
process--citizens and public officials--are likely to make some judgments as
to the relative costs and benefits of participation (Kweit and Kweit 1981).Any
individual citizen's choice to participate (or not to participate) is likely to affect
only that person. But the decisions of public managers affect the opportunity
and nature of participation by all citizens.
The attitude of governments is a major predictor of whether participa-
tion will be undertaken and whether it will be meaningful. With respect to
participation in PRSPs, Painter (2002) argues that the main determinant of
successful participation was the role of government: "Government will and
expectations strongly determine the quality of the process. An active, capa-
ble, and experienced civil society is helpful in influencing the quality of the
participatory process, but not determinative." Governments limited public
involvement in developing PRSPs; it is not clear that consultation shaped
planning in any way.
Sometimes governmental actors are hostile to participation, viewing it
as a threat to their institutional rights and privileges. In other cases govern-
ments may not be opposed to participation, but they are skeptical of it,
unsure how it works and what benefits it provides beyond symbolic ones.

A more common perspective among developing-country governments sees
participation in the budget process as being politically obligatory, or even
politically advantageous, but of little practical significance. Governments
use participatory rhetoric and limited gestures toward increased budget trans-
parency and community budget consultations to assuage donors and reduce
tensions with civil society, but they may not meaningfully engage with the
process--at least initially. (Heimans 2002, p. 15)

In Porto Alegre, Brazil, governments not only welcomed but promoted
participatory budgeting. An election platform based on spending changes
and enhancing citizen involvement created favorable political conditions.
The fact that the government was bankrupt increased the willingness to
experiment with new forums, and the disorganization of the bureaucracy
weakened resistance to change. The government was also willing to increase
revenues that could be applied toward proposals from participation forums,
which immediately made participation significant. The Workers' Party

80 Donald P. Moynihan

changed the municipal revenue system by indexing property taxes,"widen-
ing the fiscal space that was a necessary precondition for participatory bud-
geting" (Robinson 2004, p. 9).
Other Brazilian municipalities that have followed the Porto Alegre
model have also tended to be progressive governments that emphasize citi-
zen participation and social justice. The emphasis on citizen involvement is
partly a reaction to the military dictatorship that ruled Brazil from 1964 to
1985. While progressive governments initiated participatory budgeting
practices, such budgeting practices have been maintained by more conser-
vative governments.They have often been maintained for symbolic purposes
and become more prone to"manipulation and mismanagement"(Wampler
2000, p. 7). The Porto Alegre experience points to the importance of politi-
cal parties in prompting adoption of participation. The parties most likely
to adopt participation goals in their platforms are (a) long-term opposition
parties reacting to authoritarian regimes or (b) political parties that represent
the poor or a social justice agenda.
The success of participation depends in part on administrative capac-
ity. In Porto Alegre the bureaucracy played a positive role in organizing
meetings, providing necessary information to citizens about their choices,
and offering technical analyses for project proposals. To provide support at
the neighborhood level, more government offices were opened in new areas
of the city. The decentralization of physical locations was a very visible indi-
cator of government accessibility. Meetings were decentralized and easily
accessible to all who wanted to attend.
Wampler (2000) argues that the nature of citizen proposals forces bureau-
cracies to think more collaboratively. A proposal on health or education
requires the departments concerned to work with the planning agency and
with community leaders.Technical plans and new investments usually require
the approval of participants and foster an ongoing relationship based on open
communication.

Shaping the Administrative View: The Instrumental Assessment of
Participation

The instrumental perspective suggests that administrators are likely to be
concerned mainly with the strain that public participation places on the
decision process and the costs it imposes on the administrator. The costs of
participation may be classified as direct administrative costs, self-interested
administrative costs,and decision process and outcome costs (figure 2.3).Gov-
ernment decision making is characterized by a series of limited opportunities

Citizen Participation in Budgeting: Prospects for Developing Countries 81

to come to closure within a restricted time period. Increased participation
endangers this (Pressman and Wildavsky 1973).
Direct administrative costs refer to the costs of coordinating participation
(Kweit and Kweit 1981). Government requirements for participation in
Uganda went unheeded because administrators "didn't have the time" to
organize participation (Heimans 2002).Administrative self-interest costs arise
from the public manager's potential loss of control over the decision agenda,
which reduces administrative power and authority over day-to-day activities.
Managers who wish to maintain program stability or are concerned with
shaping bureaucratic activities and carving out an interesting policy-making
role are likely to resist participatory processes that determine the policy agenda

Decision outcome costs
Decisions will be less timely
Citizens may lack expertise
Participation unsuited to dealing with complex Administrative self-interest costs
and technical issues Loss of control of decision agenda,
Public involvement can deter innovation and new a source of power and prestige for
policies the administrator
Public may emphasize short-sighted goals Loss of influence over policies that
Decision may be more inequitable due to low shape tasks for administrator
diversity Reduced program stability, regularity
Public will not make tradeoffs, raise overall and routinization of decisions
spending

Decision process costs
Participation creates excessive administrative Decision options
delays, slowing decisions and implementation Foster participation
Reduces the ability to reach consensus and Listen to feedback
decision closure

Instrumental benefits
Satisfy political promise of participation Direct administrative costs
Programs, informed by citizen preferences, Actual and opportunity cost of time
will be more targeted and effective and effort in coordinating participation
Additional and innovative ideas on how to deliver Costs of informing citizens about
public services participation opportunities
Increased democratic legitimacy Costs of educating citizens on issue
Greater acceptance and support of public Administrators must deal with conflict
decisions arising from participation
Possibility of co-production
Utilize NGO/civil society capacity
Achievement of participation mandates

Source: Adapted from Moynihan 2003.

F I G U R E 2 . 3 Administrative Costs and Instrumental Benefits
of Participation

82 Donald P. Moynihan

(Dunleavy 1991; McNair, Caldwell, and Pollane 1983). Decision process costs
are the variable costs involved in making decisions. Administrators view
participation as slowing the process of decision making and reducing the
potential for reaching consensus (Nelkin 1984). Governments in developing
countries may argue that they have limited administrative capacity and can-
not afford to create participatory forums.
Administrators may argue that participation reduces the quality of the
decision outcome,that poor decisions are made because of lack of knowledge
or expertise on the part of the public (Cleveland 1985). A frequently cited
explanation for governments' resistance to participatory budgeting is that it
will make tough choices on the distribution of resources even more difficult.
As governments interact with the public,NGOs,and interest groups,they will
have to face explicit demands that cannot be met."A typical complaint is that
participatory budgeting processes or public consultations simply result in
`shopping lists' of demands from communities that do not reflect the scarce
resources available"(Heimans 2002,p.18).Governments may also worry that
because participation cannot be made truly representative,important groups
may be excluded, distorting policy. In fact, the greater the degree of partici-
pation, the more likely it is to be representative. The more limited the range
of participation,the more likely that elite interests will gain influence over the
budget process in a nontransparent way.
F�lscher, Krafchik, and Shapiro (2000) tracked participation in parlia-
mentary budget hearings during the 1990s in South Africa. They observed
broadened involvement beyond a small number of private interests to a rel-
atively high number of presentations from NGOs on poverty and macro-
economic policy. The argument that budgeting can never be made truly
representative can also be used as a ploy to question the legitimacy and
deflect the input of NGOs--a criticism faced by IDASA in South Africa.
Participation can yield several benefits. Public input can provide man-
agers with information that improves allocative or technical efficiency. Pub-
lic input may offer innovative solutions that would not have emerged from
traditional modes of decision making. Because many public programs
require some level of cooperation from citizens, involvement of the public
is likely to help government develop more practical goals, raise acceptance
of programs, and perhaps even allow citizens to work together with the
administration to implement programs (Thomas 1995).
Participation also increases public support of administrators and
programs (Brinkerhoff and Goldsmith 2000). Unpopular agencies can use
participation to improve their image (Kweit and Kweit 1981; McNair,
Caldwell, and Pollane 1983). Participatory forums may be designed to

Citizen Participation in Budgeting: Prospects for Developing Countries 83

increase the perception that public organizations are more consultative,
lending an air of democratic legitimacy to the government's activities
(Frederickson 1982).

Conclusions

Participation in developing countries is inadequate. It tends not to be
broadly representative of the population, and it fails to involve meaningful
dialogue that affects public decision making.
Civil society can play an important role in improving participation. In
most of the cases presented in this chapter, an NGO or a team of NGOs
effected real change in government decision making by using the budget
process. Even in Porto Alegre, where citizen involvement is most direct, an
active civil society aided the process of citizen participation. At the same
time, NGOs must take into account the government's attitude toward partici-
pation and find ways to reduce the perceived costs and increase the perceived
benefits of participation.

Notes

1. This section draws on Moynihan (2003).
2. AmericaSpeaks, an NGO, organized the format and handled the logistics of the
summit.

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Two
P A R T

Regional Surveys

Lessons from Latin America's
Experience with
Participatory Budgeting
B e n j a m i n G o l d f r a n k

W ithin a relatively short period (1990�2005), participatory
budgeting has evolved from an obscure process of popular
participation championed by a few leftist parties in South America
to a"best practice"for reducing poverty and improving governance.
Depending on how strictly participatory budgeting is defined,it has
expanded from about a dozen cities, most of them in Brazil, to
250�2,500 locales in Latin America alone.1
Whether this diffusion of participatory budgeting is seen as
cause for celebration or alarm depends on both how participatory
budgetingisinterpretedandhowitisimplemented.Interpretations
of participatory budgeting,especially as practiced in Porto Alegre,
the Brazilian city that named and publicized it,abound.Yet studies
of how participatory budgeting is practiced, especially outside of
Brazil, areonlybeginningtoappear.Systematiccomparisonsof the
ways in which participatory budgeting is designed and imple-
mented are rare.
This chapter analyzes recent efforts to introduce participatory
mechanisms into local government budget processes in Latin
America. After defining participatory budgeting and outlining its
history,it presents the major normative perspectives on participatory
budgeting as well as a number of analytical perspectives. The broad

92 Benjamin Goldfrank

hypothesis advanced is that the design and results of participatory budgeting
depend on both the designers' intentions and local conditions. This hypo-
thesis is first tested at the national level by comparing experiences in Bolivia,
Brazil, Guatemala, Nicaragua, and Peru. The chapter then presents case
studies of 14 municipalities outside Brazil.The last section draws conclusions
from the case studies and identifies future directions for participatory bud-
geting in Latin America.

History of Participatory Budgeting

A broad definition of participatory budgeting usually describes it as a
process through which citizens can contribute to decision making over at
least part of a governmental budget.2 Narrow definitions usually derive from
particular experiences of participatory budgeting, especially that of Porto
Alegre. According to these definitions, participatory budgeting is a process
that is open to any citizen who wants to participate, combines direct and
representative democracy, involves deliberation (not merely consultation),
redistributes resources toward the poor, and is self-regulating, such that
participants help define the rules governing the process, including the
criteria by which resources are allocated (see, for example, Avritzer 2002,
Genro and Souza 1997, and Santos 1998).
Neither the broad nor the narrow definitions are ideal for constructing
a history of participatory budgeting.The broad definition would include too
many cases, such as lobbying, general town hall meetings, and special public
hearings or referendums on specific budget items; the narrow definition
would include too few examples. A more wieldy definition might be that
participatory budgeting is a process by which citizens, either as individuals
or through civic associations, can voluntarily and regularly contribute to
decision making over at least part of a public budget through an annual
series of scheduled meetings with government authorities.
Much of the literature on participatory budgeting credits the Workers'
Party with having created it in Porto Alegre in 1989. Its origins are actually
more complicated and disputed. During the late 1970s and early 1980s,
municipal governments in Lages (Lesbaupin 2000),Boa Esperan�a (Baiocchi
2001b), and Pelotas (Goldfrank and Schneider 2006), all controlled by the
Party of the Brazilian Democratic Movement, submitted their budgets for
public discussion (a former mayor of Pelotas claims to have invented
participatory budgeting). For its part, the Workers' Party experimented with
citizen budget councils not only in PortoAlegre but in several of the 36 munici-
palities it won in the 1988 elections, including Ipatinga, Jo�o Monlevarde,
Piracicaba, Santo Andr�, and Santos (Abers 1996).

Lessons from Latin America's Experience with Participatory Budgeting 93

The design of participatory budgeting in Porto Alegre was developed
by both community associations and the Workers' Party municipal
administration (Baierle 1998; Baiocchi 2002). Both sides were aware of
earlier experiments by the Brazilian Democratic Movement Party. Before
the implementation of participatory budgeting, Porto Alegre's Union of
Neighborhood Associations produced a report demanding participation
in formulating the budget. That report described eight municipalities in
which participatory budgeting had been attempted in the past (Goldfrank
2005). Workers' Party publications such as Teoria & Debate published
discussions of various forms of participatory governance in the run-up to
the 1988 municipal elections. At least two other political parties on the
left--the Radical Cause in Ciudad Guayana, Venezuela (and shortly after in
Caracas) and the Broad Front in Montevideo,Uruguay--were implementing
very similar participation programs at roughly the same time as the Workers'
Party in Brazil.3
It was not until 1990 that the process in Porto Alegre was dubbed
"participatory budgeting."Both the label and the practice (albeit in modified
forms) began to be adopted in other cities under the Workers' Party in the
early 1990s.4 Local governments throughout Latin America began using
participatory budgeting shortly thereafter, especially after 1996, when the
United Nations Habitat II Conference in Istanbul recognized Porto Alegre's
participatory budgeting as one of 42 best practices in urban governance.
All of the early experiences of participatory budgeting were imple-
mented by parties that opposed the party in power at the national level.
Experiments first occurred in Brazil largely because Brazil was the only
authoritarian country--and one of the only countries in the region--that
simultaneously allowed an opposition party to exist, gave significant
spending responsibilities to municipalities, and held relatively fair mayoral
elections (except in strategic cities such as state capitals and major ports).
The twin waves of decentralization and democratization that swept Latin
America in the 1980s and 1990s encouraged similar experimentation within
and beyond Brazil, especially where political parties similar to the Workers'
Party were allied with social movements demanding both democracy and
improved urban services.
In contrast, many of the later experiences of participatory budgeting
(which generally do not adopt the participatory budgeting label) were
legislated into existence by national power-holders on the center or right of
the political spectrum.Examples include the 1994 Popular Participation Law
in Bolivia, sponsored by President Gonzalo S�nchez de Lozada; Nicaragua's
municipal reforms in the late 1990s, under President Arnoldo Alem�n; and
the decentralizing reforms in Guatemala outlined in the 1996 Peace Accords

94 Benjamin Goldfrank

under President Alvaro Arz� and codified in 2002 under President Alvaro
Portillo. In all three cases, the requirements of citizen participation in order
to receive debt relief funds from the Heavily Indebted Poor Countries (HIPC
II) program starting in 2000 seem to have stimulated increased efforts to
ensure that municipalities were implementing national laws.
Peru's2003ParticipatoryBudgetingLawappearstobesomewhatdifferent,
both because it uses the participatory budgeting label and because an ostensibly
center-left president,Alejandro Toledo,pushed it forward.Within Brazil,while
the majority of recent participatory budgeting experiences continue to be
under leftist administrations, primarily the Workers' Party, parties of all
political stripes have now used participatory budgeting, including the Party of
the Liberal Front,an outgrowth of the official party of the military dictatorship.
Participatory budgeting is thus no longer exclusively a leftist project.

Normative and Analytical Approaches to
Participatory Budgeting

The early ideological motivations for adopting participatory budgeting rep-
resent only one of four distinct normative approaches to the subject (a
radical democratic approach). The others might be termed orthodox leftist,
liberal, and conservative. The radical democratic and liberal perspectives
derive from the foremost proponents of participatory budgeting, that odd
combination of leftist parties and international development agencies.
These views are more evident in the debate surrounding participatory
budgeting and in academic analyses than are conservative and orthodox
leftist critiques of participatory budgeting, which come mostly from parties
on the center and the right and from Leninist factions or parties.
Conservative and orthodox leftist critiques should not be ignored, however,
because these actors can play important roles in weakening or defeating
participatory budgeting experiments.
The original normative reasons for implementing participatory
budgeting given by the Workers' Party in Porto Alegre--as well as by the
Radical Cause Party in Caracas and the Broad Front Party in Montevideo--
were closely tied to the general transformation that much of the Latin
American left sought in the 1970s and 1980s.5 The new, "renovated," or
postauthoritarian left that emerged out of failed guerrilla movements and
repressive military dictatorships discarded the traditional teleological view
of socialism along with traditional instrumental or dismissive views of
democracy. Socialism was no longer seen as inevitable but as an open-ended
process to be constructed; democracy was no longer seen as a way station

Lessons from Latin America's Experience with Participatory Budgeting 95

along the path to true socialism or a formula for bourgeois domination but
as fundamental to any socialist project. The guiding construct became
"radical democracy"(also called"deepening democracy"and"democratizing
democracy"). In the campaign proposals and government documents of the
Workers'Party,Radical Cause Party,and Broad Front Party,four key elements
guide their approach to participatory budgeting: direct citizen participation
in government decision-making processes and oversight; administrative and
fiscal transparency to prevent corruption; concrete improvements in urban
infrastructure and services, with an emphasis on aiding the poor; and
changing political culture,conceived as the transformation of urban residents
into citizens,from political objects of clientelist practices into political subjects
aware of their democratic rights (Goldfrank 2002).
In calling for a new participatory state, those guided by this radical
democratic vision rejected both the Soviet-style all-powerful centralized
state and what they called the neoliberal or minimal state advocated by
international financial institutions and by most national governments in the
region (Dutra 2002). Participatory budgeting, in this view, would help
relegitimate the state by showing that it could be effective,redistributive,and
transparent. The more Gramscian-inspired proponents believed that
participatory budgeting would be an arena in which empowered citizens
could construct an alternative "hegemony" (Dutra 2002; Sader 2002).6
Ol�vio Dutra (2002), the former mayor of Porto Alegre, who first introduced
participatory budgeting there (later extending it to Rio Grande de Sul after
being elected governor of that state), describes the process as revolutionary
and links it to socialism:7

we are fully conscious that this revolutionary process is situated in a context of
heightened struggle between two distinct projects. The traditional elites know
perfectly well that this practice gives real content to democracy, ending
privileges, clientelism, and ultimately the power of capital over society. This is
a political struggle with a clear class (or class bloc) content which will continue
to develop for a long time. That is why if anyone claims, and some do, that
participatory budgeting is just a more organized form for the poor to fight over
the crumbs of capitalism, or at best, that it is a slight democratic improvement
totally unrelated to socialism, they would be completely mistaken. Besides
deepening and radicalizing democracy, participatory budgeting also is consti-
tuted by a vigorous socialist impulse, if we conceive socialism as a process in
which direct, participatory democracy is an essential element, because it
facilitates critical consciousness and ties of solidarity among the exploited and
oppressed, opening the way for the public appropriation of the State and the
construction of a new society.

96 Benjamin Goldfrank

In this statement,Dutra alludes to the critique of participatory budgeting
by the orthodox left.8 From this perspective,participatory budgeting is at best
insignificant because of its excessively local focus; its multiclass character
(that is, the fact that it is not an instrument solely of workers); and its inabil-
ity to transform the fundamental structures of capitalism or harm bourgeois
interests. At worst participatory budgeting helps the bourgeoisie cope with
the "crisis of capitalism" by taming popular movements and teaching them
to cooperate with elites rather than engage in direct action to destroy the
bourgeois state. A crucial complaint of these critics is that national issues
such as debt repayment are not discussed within the participatory budgeting
process. Most of these critics point to the support given participatory
budgeting by"imperialist organizations"such as the United Nations and the
Inter-American Development Bank as evidence that the process is a Trojan
horse used to undermine revolutionary aspirations.
Indeed, the United Nations (through its Habitat division), the Inter-
AmericanDevelopmentBank,andnumerousotherinternationaldevelopment
agencies have promoted participatory budgeting in various ways,ranging from
publishing books and articles to financing workshops and studies to requiring
participation as a condition for aid and providing assistance to individual
participatory budgeting projects.9 Although much of the discourse used by the
development agencies closely resembles the radical democratic language and
many of the goals--reducing poverty and extending service provision, ending
corruption and clientelism, promoting transparency and accountability,
improving government efficiency and legitimacy--are similar, the agencies'
liberal approach to participatory budgeting differs from the radical democratic
approach in several ways.While the leftist parties initially behind participatory
budgeting view the process as contributing to the reconceptualization of
socialism,development agencies see it as one among several tools for reconcep-
tualizing development.
Two factors appear to have contributed to the adoption of participatory
budgeting by the development community in the 1990s. One was the rising
influence of the notion of participation in development; the other was the
notion of good institutions, or good governance, as necessary for economic
growth.10 For many proponents of the liberal perspective, participatory
budgeting is a potential institutional remedy within a second round of
market-oriented economic and administrative reforms in Latin America,
following the failure of the first round to reduce poverty or increase growth
rates despite bringing down inflation.As Campbell (2003, p. 8) argues,"The
next stage of reforms in the region was shifted to the local level, where new
models of governance were being invented. These models were marked by

Lessons from Latin America's Experience with Participatory Budgeting 97

innovation in the governance contract, by widespread participation, and by
new forms of accountability in spending."
From this perspective, participatory budgeting exists alongside and in
support of other public sector reforms,such as privatization and streamlining
state employment.11Whereas the radical democratic approach views participa-
tory budgeting as legitimating the state's role to protect it against privatization,
the liberal approach sees it as co-existing with strategies for reducing the
state's role. Whereas the radical democratic approach views participatory
budgeting as involving citizens in participating in budgetary decision making
and monitoring results, the liberal approach views participation more
broadly,to include consultations between governments and citizens;provision
of information to citizens; use of labor, materials, and money contributed by
citizens to implement projects; and payment of taxes.
In some ways the liberal and orthodox leftist approaches to partici-
patory budgeting coincide. Both see participatory budgeting as facilitating
market-oriented, or capitalist, development by encouraging citizens to trust
government (and therefore stabilizing democracy). Both ignore or dismiss
what radical democrats see as participatory budgeting's potential as a
counterhegemonic or socialist project. This is precisely the danger that the
conservative approach to participatory budgeting highlights. When
participatory budgeting experiments were initiated in Porto Alegre, Monte-
video, and Caracas, they were criticized as dangerous for the stability and
even persistence of representative democracy by established political parties,
particularly in Montevideo and Caracas (see Goldfrank 2002).12 From the
conservative perspective, rather than deepening democracy and promoting
government efficiency, participatory budgeting is antidemocratic and
unstable. Two somewhat contradictory positions can be found within this
view. One is that unrepresentative volunteer participants are given greater
power than democratically elected (and therefore representative) municipal
council members and technically trained professional municipal employees.
Participatory budgeting thus undermines the legitimacy of the municipal
legislature and leads to poor service provision and urban planning. The
other position is that participatory budgeting participants are politically
manipulated by the local ruling party and deceived into thinking that they
have decision-making power. In both cases many within the conservative
perspective explicitly link participatory budgeting to totalitarianism. They
see participatory budgeting as the creation of a parallel power aimed at
replacing representative, multiparty democracy and capitalism with single-
party socialist domination, effected through a direct relationship between
the executive branch and the masses.

98 Benjamin Goldfrank

Participatory budgeting is not a neutral, technical instrument--notwith-
standing development agencies'inclusion of it as part of a"toolkit"for develop-
ment. Much of the now extensive academic literature on participatory
budgeting,while often influenced by one of these normative approaches,either
ignores the ideological and political battle surrounding it or fails to incorpo-
rate this battle into the analysis. Many scholars have focused on showing that
participatory budgeting embodies concepts such as participatory publics
(Wampler and Avritzer 2004), co-governance for accountability (Ackerman
2004), progressive pragmatism (Rhodes 2003), deliberative development
(Evans 2004), or empowered participatory governance (Baiocchi 2001b; Fung
and Wright 2001; Mi�os Chavez 2004b).13 They and other scholars have pro-
duced rich analyses of participatory budgeting, focused almost entirely on
Brazilian experiences,especially PortoAlegre.They have shown that participa-
tory budgeting can achieve many of the goals envisioned by both the radical
democratic and liberal perspectives, especially in terms of redirecting public
resources toward poor neighborhoods (Marquetti 2002; Serageldin and others
2003);extendingserviceprovision(Navarro2004;Santos1998);democratizing
existing and spurring the creation of new civic associations (Abers 2000;Baierle
1998; Baiocchi 2001a, 2001b; Wampler and Avritzer 2004); and increasing
transparency and accountability (Ackerman 2004; Fedozzi 1997; Wampler
2004),while reducing clientelism (Abers 2000) and enhancing democratic rep-
resentation for the formerly excluded (Nylen 2003; Souza 2001). They show
that these outcomes are by no means guaranteed by participatory budgeting
and that even well-regarded cases show some contradictory results (Baierle
2003; Nylen 2003; Souza 2001; Wampler 2004).

Preconditions and Design Features

To explain the success and failure of different participatory budgeting
experiments, scholars propose a long list of potentially important design
features and enabling conditions. Navarro (2004) provides one of the most
comprehensive inventories, which he divides into political, administrative,
economic, legal, geographical, and "controversial" issues.14
Most scholars agree that political will, sufficient resources, and political
decentralization are necessary for successful participatory budgeting; many
believe that preexisting societal organization is also necessary. Other
conditions cited below can be helpful but are not considered preconditions.

Political will: The incumbent party and especially the mayor should have a
commitment to opening channels of citizen participation in order to share
decision-making power.

Lessons from Latin America's Experience with Participatory Budgeting 99

Sufficient resources: The municipal government should control revenues suf-
ficient to enable investments in public works projects and social programs.
Political decentralization: Municipal officeholders should be democrati-
cally elected.
Social capital: The locale should possess civil society associations,preferably
disposed to participate in municipal affairs, organized in networks, and
relatively autonomous.
Bureaucratic competence: The municipal administration should be staffed
by a substantial number of technically qualified employees.
Small size: The locale,or at least the decision-making units of participatory
budgeting (which might be considered a design feature), should not be so
large as to discourage collective action.
Legal foundation: Existing laws should allow and preferably promote
citizen participation in budget decisions.

There is less consensus on which features of institutional design are most
important and even whether certain features facilitate or weaken participatory
budgeting. Features that have been discussed include the following:

Deliberation:Participantsshouldengageinface-to-facediscussionanddebate
and be given at least some decision-making power over at least some part of
the budgetary process, usually the establishment of investment priorities.
Centralized supervision: The mayor's office should be directly involved in
coordinating the participatory budgeting process.
Accessible rules and information: The rules governing the process,
including the criteria used to allocate resources across neighborhoods
and make decisions,as well as all the budgetary and planning information
necessary to make informed decisions and monitor results, should be
publicly available and provided in an accessible format.
Focus on immediate versus long-term planning: Some scholars argue that
focusing on immediate,practical needs is key to stimulating participation.
Others argue that a narrow focus undermines discussion of broader,long-
term issues and weakens urban planning.
Informal versus formal structure: Some scholars argue in favor of an
informal structure for participation that is open to individuals and
groups without privileging existing organizations and that is capable of
being modified by the participants themselves. Others suggest that in
order to avoid political manipulation of participatory budgeting by
incumbents and ensure representation of important political and social
actors, the process should be regulated by law.

100 Benjamin Goldfrank

Gaps in the Literature

Despite the growing attention given to participatory budgeting, at least three
gaps remain in the literature. First, no rigorous, cross-national analytical
testing of which design features and preconditions are most important for
producing the desired outcomes has been conducted. Cabannes (2004)
provides a valuable review of participatory budgeting experiences in 25 cities
across 10 countries. Torres Ribeiro and de Grazia (2003) present useful data
on more than 100 cases of participatory budgeting in Brazilian cities. Both
studies are based on self-reporting by municipal officials, however, and
neither conducts causal analysis.
Second, the design of participatory budgeting and the conditions under
which it is introduced have not been linked theoretically. Though many
scholars suggest generically that the design of participatory budgeting
should be adapted to local circumstances, there is little theorizing about how
context affects designs.15
Third, the competitive, or nonneutral, aspect of participatory budgeting
has not been thoroughly examined.16 Insufficient attention has been devoted
to opposition parties.
I addressed these lacunae in previous research (Goldfrank 2002, 2005)
with a structured comparison of participatory budgeting in Caracas,
Montevideo, and Porto Alegre. That work led me to conclude that "the
design features that ultimately aided the deepening of democracy in Porto
Alegre--a high degree of participant decision-making power, a wide range
of issues under debate, and an informal structure--were contingent upon a
decentralized national state that afforded resources and responsibilities to
the municipal government and a set of weakly institutionalized local oppo-
sition parties that failed to resist the participation program forcefully"
(Goldfrank 2005,p.9).In this chapter I examine 14 case studies to determine
whether they support this statement.
Participatory budgeting is a political institution that is part of normal
partisan competition (Goldfrank and Schneider 2006). Political leaders
strategically introduce and attempt to design participatory budgeting
to serve multiple ends, including gaining electoral support, weakening
opponents, forming or consolidating alliances, and fulfilling ideological
commitments. The results are not necessarily as originally intended. Out-
comes depend not only on the designers' intentions and the local contexts
but on the intentions and strategies of other actors, including opponents.
This point is especially important when examining the national cases, where
the political projects and ambitions of power-holders at different levels of
government come into direct conflict.17

Lessons from Latin America's Experience with Participatory Budgeting 101

National Case Studies

The recent expansion of citizen participation in subnational budget processes
across Latin America--driven in Bolivia, Guatemala, Nicaragua, and Peru by
mandates from the national government--provides an excellent opportunity
to examine the full range of hypotheses about preconditions,design features,
and strategic objectives.18 Before these countries are examined individually,
some broad comparisons based on the preceding discussion can be made
with the locally driven cases in Brazil.
All five countries are politically decentralized, in the sense that municipal
executives are directly elected.19 However, regional governors are elected in
Brazil and Peru (at the provincial and regional levels) but appointed in
Bolivia,Guatemala (at the regional and departmental levels),and Nicaragua.
In Bolivia, Guatemala, and Nicaragua, some national administrations have
concentrated"decentralized"resources in the regional governments in order
to avoid supporting municipalities held by the opposition.
No national law requires participatory budgeting in Brazil. As a result,
in the few hundred cities where it exists, mayors are more likely to be at least
somewhat committed to citizen participation than their counterparts in
countries that mandate participatory budgeting.In 1997�2000,73 of the 140
Brazilian cities using participatory budgeting had Workers' Party mayors
and 33 had mayors from other parties on the left. In many of the remaining
cities, the deputy mayor belonged to the Workers' Party and was often in
charge of participatory budgeting (Paiva 2001).
Because Brazil is both wealthier and more fiscally decentralized than the
other countries, its municipalities generally have more revenues to spend.
Most Brazilian cities spend $240�$400 per resident (Cabannes 2004). In the
Central American and Andean cases studied here, most municipalities spent
orders of magnitude less (as little as $11 per capita in Nandaime, Nicaragua
[WBI 2004f]). Brazilian municipalities are also more likely to have civil
society organizations that can work together than are municipalities
in Guatemala, Nicaragua, and Peru, where recent civil wars have polarized
the population.
The only precondition that might benefit the non-Brazilian cases is the
legal foundation.While Brazilian laws require large cities to create municipal
administrative councils for health, education, and other social sectors in
order to receive federal transfers, they do not require budget councils. In
contrast, national laws in the other four countries require development or
oversight councils with responsibilities for contributing to municipal budgets
and monitoring implementation. Peru's laws go furthest. Guatemala's laws
on participation are contradictory: the Development Councils Law requires

102 Benjamin Goldfrank

budgetary proposals from community development councils, the Municipal
Code does not.
The two remaining preconditions--bureaucratic competence and small
size--vary within and across countries. They may help balance each other
because larger cities, which tend to have lower participation rates in various
local civic activities,also tend to have larger,more professional bureaucracies,
although in general, municipal employees in Latin America do not have a
reputation for efficiency (Nickson 1995).
The institutional design of Brazil's participatory budgeting differs from
that of other countries in several important ways. First, its programs tend to
focus more on immediate needs.20 Indeed, in the four other countries, the
participatory budgeting processes either grew out of or are linked to more
long-term municipal development planning.
Second, participatory budgeting is generally less formally structured in
Brazil. Individuals rather than representatives of organizations are more
likely to participate (Cabannes 2004).21 In most Brazilian cities participatory
budgeting is internally regulated; outside Brazil"participatory budgeting has
been regulated and institutionalized by municipal resolution,decrees,laws or
constitutions" (Cabannes 2004, p. 40).22
Third, participatory budgeting is more deliberative in Brazil than in
other countries. Community assemblies debate and set investment priorities
on an annual basis; regional and sectoral forums of delegates from these
assemblies and a municipal council of delegates meet throughout the year
to negotiate budget details with city officials before the budget is sent to the
municipal legislature for approval. In other countries the deliberative char-
acter of participatory budgeting is often difficult to perceive.23 The laws in
Bolivia, Guatemala, and Nicaragua suggest more consultative roles for the
development councils. The Peruvian participatory budgeting law requires
that 60 percent of participatory budgeting coordination council members
be government officials.24 Roughly half of the members on the development
councils in Guatemala and Nicaragua are also from the government.
Fourth, municipalities in Brazil do a better job of disseminating
information than municipalities in other countries, partly because they have
greater resources, which allows them to print and distribute rulebooks and
pamphlets and to advertise meeting times and places. In Porto Alegre city
buses serve as mobile calendars for announcing participatory budgeting
assemblies, which are also advertised in newspapers and on a government-
produced television program. Even in poor municipalities, information is
made accessible: in the impoverished Brazilian fishing village of Icapu�, for
example, the mayor painted monthly budget figures--both revenues and
expenditures--on the side of his house.

Lessons from Latin America's Experience with Participatory Budgeting 103

How have the contrasting designs and preconditions affected the results
of participatory budgeting? Outside Brazil implementation of national laws
on citizen participation in subnational budgeting has been slow and uneven.
This seems to reflect the indifference or hostility toward participatory
budgeting by many mayors and the lack of bureaucratic competence of
many municipal governments, especially the smaller ones. Regional and
local authorities have often used undemocratic procedures in composing the
development councils, feeding the view that clientelism and corruption
persist. The lack of clear criteria for distributing resources has led to an
urban bias in many cases, even in predominantly rural areas, undermining
poverty reduction efforts. Actual citizen participation rates have been low,
not only in decision-making processes but even in consultation exercises.As
a World Bank Institute summary report notes, "The lack of information,
interest,capacity,time,and financial resources constrains direct participation"
(WBI n.d.-a, p. 40).
Some observers have expressed concern that participatory budgeting in
Brazil fails to integrate into effective long-term urban planning, generates
antagonisms with municipal legislatures,and is not legally required of all 5,507
municipalities, which means that even in cities that have tried participatory
budgeting, it may not continue in future administrations. Indeed, a study of
103 Brazilian cities with participatory budgeting during the 1997�2000 period
shows that in 28 percent of the cases,participatory budgeting was discontinued
by the initiating or the subsequent administration (Chaves Teixeira n.d.).
What features account for the diverging results across countries? Political
will, bureaucratic competence, sufficient resources, and an informal,
deliberative, and needs- and rules-based design appear to increase the chance
that participatory budgeting will be successful.
Preconditions, strategic objectives, and institutional design seem to be
linked.Where national governments try to legislate participation rather than
design public, deliberative processes, they tend to create overly formal
institutions that privilege existing political and social organizations.25
Determining which organizations are privileged depends on the goals of
power-holders at both the national and subnational levels of government.
Locally driven participatory budgeting processes tend to be more
informal and deliberative, for two possible reasons. One is that mayors who
implement participatory budgeting are often responding to demands by
social movements for deliberative public spaces. The other is that open
formats potentially allow mayors to attract new constituents. It is probably
not a coincidence that most cases of successful participatory budgeting in
Peru exhibit more informal and deliberative designs and were started by
mayors before the 2003 law went into effect.26

104 Benjamin Goldfrank

Bolivia

Institutions designed at the national level have been modified (or rejected) by
local authorities in Bolivia, based on local conditions, with widely varying
results. President Gonzalo S�nchez de Lozada introduced decentralization
measures and the Popular Participation Law in 1994.Since then the experience
of citizen participation in subnational budgeting in Bolivia has been mixed.
Most observers find fault with both the design and the implementation
of the participatory institutions, although some believe living standards in
rural communities have improved.27 It seems likely, however, that any
improvements were due more to the increased funds made available to
municipalities than to increased citizen participation. Revenue transfers to
all local governments more than tripled between 1993 and 1997; alloca-
tions for noncapital expenses jumped from about $4 million a year to
roughly $112 million (Altman 2003). In addition, HIPC II funds became
available in 2000.
President S�nchez de Lozada's motivations for implementing the Popu-
lar Participation Law are a source of debate. Many analysts suggest that in
addition to seeking to strengthen democracy, reduce poverty, and reinforce
the structural adjustment program adopted in the 1980s, S�nchez de Lozada
sought to design the law strategically so as to reap political benefits. First, his
party was weakest in departmental capitals, and he feared that the elite's
desire for autonomy in Santa Cruz would sow national disunity. For this
reason, the participation and decentralization laws emphasized the
municipal rather than the departmental levels of government. S�nchez de
Lozada's successor, Hugo Banzer, whose party dominated the departmental
capitals, reversed this trend (Altman 2003).
Second, participatory institutions under S�nchez de Lozada seemed
intended to break the power of leftist labor and peasant unions, elitist"civic
committees,"and political parties and perhaps construct a new alliance with
indigenous movements. On the one hand, he appointed an indigenous
leader as his vice president. On the other hand,the Popular Participation Law
gave municipal planning and budgeting participation rights only to territorial-
based organizations, which were conceived as traditional indigenous and
peasant community organizations in rural areas and neighborhood associ-
ations in urban areas. The territorial-based organizations were supposed to
use customary practices to elect an oversight committee to monitor budget
implementation in each municipality. The Popular Participation Law thus
ignored the unions and civic committees, creating a competitor for the party
representatives in the municipal legislature.

Lessons from Latin America's Experience with Participatory Budgeting 105

It is not surprising, then, that the major union confederations (the
Bolivian Labor Central [COB], linked to Evo Morales, and the United Union
Confederation of Bolivian Peasant Workers [CSUTCB], linked to Felipe
Quispe); the civic committees; departmental elites; and opposition parties all
opposed the Popular Participation Law (Altman 2003). The unions referred
to it as the ley maldita (damned law) and called on indigenous peasants not to
participate (their call was not always heeded) (WBI 2004b).
The Popular Participation Law appears to have functioned most
effectively in small, homogeneous, indigenous communities with strong
traditional organizations. In many municipalities, opponents of the law
obstructed,delayed,and tried to subvert the new participatory institutions.In
the first years after the law went into effect, local party elites manipulated it to
adapt it to their own use, designating oversight committee members from the
top down rather than through participatory processes and sometimes creating
fictitious territorial-based organizations rather than work with existing
organizations.Although the law stipulates that municipal governments should
hold workshops and consultations to hear community demands, this has not
occurred systematically or democratically across the 327 municipalities. In
rural areas the"culture of consultation" is"not exempt from the political sys-
tem's behavior patterns, nor from those of social movements, which, like the
parties,maintain authoritarian traits"(WBI 2002,p.12).The situation is even
worse in urban areas, where implementation of the law has been delayed and
the consultation processes co-opted.As Bartholdson,Rudqvist,andWidmark
(2002, p. 28) argue, political parties "divide indigenous and local community
members"using traditional clientelist tactics:"Particularly in the Bolivian low-
lands, municipalities have been controlled by elites in the urban centres, and
the needs of the rural indigenous population have been marginalized."
The political manipulation of the new ostensibly participatory institutions
has had negative effects on the practice of citizen participation in municipal
budgeting. In many municipalities, territorial-based organizations and
oversight committees either do not function at all or are not effective at
transmitting community demands into budgets or monitoring budget imple-
mentation in order to reduce corruption (Altman 2003; Bartholdson,
Rudqvist, and Widmark 2002; Krekeler, Quezada, and Rea 2003). Channels
for direct participation by community members appear to be lacking,and the
representativeness of the territorial-based organizations has been questioned.
According to Krekeler, Quezada, and Rea (2003, p. 25), the annual budget
process "has been reduced to a mere listing of needs of each neighborhood
or community expressed by the presidents of the neighborhood associations
or territorial-based organizations, which generally do not coincide with the

106 Benjamin Goldfrank

demands of the majority of the residents because, often, the territorial-based
organizationleadersdonotconsulttheresidents;onthecontrary,theyprioritize
the demands using personal criteria."
Nonetheless, at least one aspect of the Popular Participation Law seems
unambiguously to have enhanced democracy. In one of the only majority-
indigenous countries in Latin America, a country with a long history of the
exclusion of this majority, the law has increased the number of indigenous
mayors, municipal councillors, and, in turn, national representatives. It is
ironic that while S�nchez de Lozada may have pushed the law as a way of
winning indigenous support, the indigenous union leaders who vilified the
law ended up benefiting most from it,eventually using their strength to force
S�nchez de Lozada from office.

Guatemala

Less political controversy has accompanied decentralization and partici-
pation laws in Guatemala. Reform was linked to the mid-1990s peace
process, agreed to on a more consensual basis, and strongly encouraged by
international organizations.28
Despite these advantages, of the five countries studied here, Guatemala
has probably seen the least success with participatory budgeting. According
to a study by the World Bank Institute (2004a, p. 56), "the concept of com-
munity participation in the municipal budget . . . is just a discourse raised as
an initiative, not a process." This view is supported by other studies, which
find that the municipal development councils appear "to have been created
mainly to cover administrative obligations and not as a forum for partici-
pation"and that they only rarely overcome a"merely formal scope"(Puente
Alcaraz and Linares L�pez 2004, p. 249). A number of problems prevent the
effective functioning of participatory budgeting in Guatemala, starting with
the apparent lack of genuine commitment on the part of national leaders,
who seem to have adopted participation laws largely under pressure from
international organizations.
Although fiscal decentralization has increased in recent years,Guatemalan
municipalities remain relatively poor, dependent on less than transparent
national transfers, and heavily indebted. Transfers have increased since 2000,
with the availability of HIPC II funds. Departmental governments, whose
leaders are appointed,receive the largest share of these investment funds; they
can--and often do--withhold funding from municipalities in which the
elected mayor is from a different political party (Puente Alcaraz and Linares
L�pez 2004). Mayors must produce three separate budgets to obtain transfers

Lessons from Latin America's Experience with Participatory Budgeting 107

for public investments, and political criteria determine the distribution of
funds for two of these transfer sources (Mi�os Chavez 2001). In addition to
lacking sufficient funds, municipal governments generally lack qualified per-
sonnel; both factors undermine participatory budgeting processes (Centro
Pluricultural para la Democracia 2005).Observers have noted a lack of citizen
interest in the community and municipal development councils; civil society
organizations are either absent or unwilling to work together (Centro
Pluricultural para la Democracia 2005). One study argues that the weak and
fragmented nature of civic participation in Guatemala stems from "the
survival of authoritarian traits, the internal armed conflict, and the intro-
duction and application of policies that encourage individualism and social
atomization" (WBI 2004e, p. 3).
Perhaps the most important reason for the general failure of
participatory budgeting in Guatemala is the dearth of mayors committed
to sharing power with citizens. Since 1999 between a third and almost half
of all mayors have belonged to the Guatemalan Republican Front, the party
of ex-military dictator Efra�n Rios Montt; they have not been considered
committed to participatory ideals. Where community and municipal
development councils are more than fictive, mayors have often shaped them
for political benefit. The community councils have not generally been
composed of representatives elected in open public assemblies, as they are
supposed to be. The municipal development councils are open only to
sector representatives summoned by the mayor (WBI n.d.-a). Municipali-
ties with mayors from locally based, nonpartisan civic committees (which
are often headed by indigenous leaders) appear more committed to partici-
patory budgeting. A notable case was Quetzaltenango, one of the four
largest cities in Guatemala, during the 2000�03 term (Selee 2004). These
civic committees won in 25 municipalities in 2003 (though a traditional
party took back Quetzaltenango), less than 10 percent of the total and the
same number they won in 1999. Future success for participatory budgeting
in Guatemala may depend partly on whether civic committees gain popu-
larity in more municipalities.

Nicaragua

At first glance Nicaragua in the late 1990s might appear to have been an
auspicious arena for introducing participatory budgeting reforms.29 A leftist
party with a rhetorical commitment to participatory democracy and a
history of alliances with social organizations--the Sandinista Front for
National Liberation (FSLN)--controlled a third of all municipalities; the

108 Benjamin Goldfrank

new president, Arnoldo Alem�n, had been mayor of the capital city; and
international agencies committed large sums of aid after Hurricane Mitch,
followed by HIPC II funding in 2000. Building partly on the FSLN's
municipal autonomy laws of the late 1980s and encouraged by international
donors, Alem�n introduced further decentralization and participation
reforms in 1997, 2000, and 2001. The laws compel municipal governments
to consult with citizens in the budget process through town hall meetings
and neighborhood and municipal development committees. In practice, the
major political actors'will to share decision-making power,use international
funds transparently, and implement the reforms is questionable.30
Even some sympathetic observers do not consider the FSLN to have
reformed along the lines of other Latin American parties on the left.
Scholars highlight the FSLN's continued tendencies to co-opt and control
social movement allies and to close off spaces for dissenting opinions
instead of promoting meaningful participation processes (Hoyt 1997;
LaRam�e and Polakoff 1999).
Legal reforms, which were meant to strengthen municipal government
and were agreed to by the FSLN as part of a governing pact, also faced
problems. One was that they included measures to strengthen the
dominance of the two-party system under the FSLN and Alem�n's Liberal
Alliance. Another was that the reforms were not accompanied by adequate
resources. Between 1997 and 2003, central government transfers to
municipalities represented about 1 percent of the central government's
budget. Transfers increased to 4 percent in 2004 and should increase
annually by 1 percent over the next six years, depending in part on the
country's economic performance (Pineda Gadea 2003). It is unclear
whether these incremental increases will be sufficient. Municipal govern-
ments in Nicaragua are vastly underfunded, with some receiving less than
$9,000 a year in central transfers in 2003 and many forced into bankruptcy
(Grigsby 2003). Furthermore, central transfers were biased based on
political criteria, as were investment funds allocated through a separate
government entity, the Nicaraguan Institute of Municipal Promotion
(Grigsby 2003; Howard 2002; Ortega Hegg 2001).
The climate of political polarization and the weakness of municipal
bureaucracies also worked against participatory budgeting.As in Guatemala,
failure to achieve successful participatory budgeting practices in Nicaragua
seems overdetermined. While the laws requiring participation seem worthy,
"in practice,the attendance and dialogue in the town hall meetings have been
neither constant nor massive,like the use of the other established procedures"
(Pineda Gadea 2003, p. 17). Open town hall meetings are sparsely attended,

Lessons from Latin America's Experience with Participatory Budgeting 109

chaotic, and unproductive (Ortega Hegg 2003). Development committees
tend to be convened by the mayor and are thus often exclusionary, favoring
only the mayor's social allies (Howard 2002).

Peru

As national policy, participatory budgeting is still nascent in Peru, though a
number of local governments implemented participatory budgeting reforms
before passage of national laws in 2003. These laws obligate all regional,
provincial, and district governments to promote citizen participation in the
formulation,debate,and"concertation"(or agreement) of their development
plans and budgets through the creation of coordination councils and through
public assemblies.
While Peru shares a top-down model of participatory budgeting with the
other countries examined here, the designers of its laws did take local
experiences into account. This may be because some members of the ruling
party, Per� Posible, came from the United Left, with its history of municipal
participation programs in the 1980s before Alberto Fujimori's decade of
centralized and clientelist authoritarian rule.31 A desire for decentralization
as part of democratization emerged on the part of party representatives and
civil society organizations in opposition to Fujimori; decentralization was
also supported by international agencies, such as the U.S. Agency for Inter-
nationalDevelopment.Mostdecentralizingreformswerethusfairlyconsensual.
However, the related citizen participation laws were contested by many
congressional representatives and nearly failed to pass (Chirinos Segura
2004). Echoing the conservative approach to participatory budgeting, many
traditional parties, especially the Aprista Party (the second-largest party in
Congress), argued that citizen planning and budget councils undermined
representative democracy. It is perhaps not surprising that the Apristas had
the largest share of power at the subnational level, controlling nearly half of
the 25 regions. Faced with opposition resistance, the government passed a
compromise hybrid bill in mid-2003 that gave local authorities 60 percent of
the seats on the councils.
The first two years of participatory budgeting are not considered to have
succeeded in promoting participation, transparency, effective planning, or
improvements in public infrastructure and service provision (Chirinos
Segura 2004; D�az Palacios 2004; Monge 2004; Ricci L�pez and Bravo 2004).
A host of factors have undermined participatory budgeting, from problems
in design to resistance and manipulation by the opposition, insufficient
resources, and lack of civil society initiative.

110 Benjamin Goldfrank

Unlike Bolivia, in Peru all legally registered social organizations (not
just territorial organizations) with at least three years of proven existence
are allowed to participate in elections for the regional and local councils
meant to coordinate the development plan and budget. The restrictions
were meant to avoid the top-down creation of phantom organizations; in
practice, they excluded many organizations of the poor, which lacked legal
standing. Civil society representatives hold only 40 percent of the seats on
the coordination councils, and a third of those are slated for business
representatives, reducing participation by the poor.
The participation laws contradict the guidelines from the Ministry of the
Economy and Finance, which allowed individuals to participate and reduced
the importance of the coordination councils. This contradiction caused
confusion, and, as in other countries that nationally legislated participatory
budgeting, many local and regional leaders chose to ignore the rules.
As of mid-2004, only about a third of the 1,821 district municipalities
had created local coordination councils (D�az Palacios 2004). In his study of
more than 30 provincial and district participatory budgeting experiences,
D�az Palacios (2004, pp. 233�34) finds that mayors seemed to be complying
"with constituting the local coordination council more for formal reasons
than out of democratic conviction,"given that the local coordination council
were not taking on the planning and budgeting roles allowed for in the
law. Chirinos Segura (2004) reports that the Congress had to pass additional
laws in order to force the regional governments to establish their coordina-
tion councils, which even then were rarely convened. In some cases they
were convened but could not reach a quorum. Elections for the coordina-
tion councils were either never held or not very democratic (Chirinos
Segura 2004; D�az Palacios 2004;Ventura Ego�vil 2003). In place of a general
election process, the mayor or regional presidents often invited certain
organizations to assemblies in order to select representatives. At the other
extreme, many local authorities ignored the rules about legal registration
and being in existence for three years in order to allow more social organi-
zations to participate.
Problems remain even where mayors are committed to participatory
budgeting and try to work around the restrictions in national laws. Local
governments remain dependent on unreliable and stingy central government
transfers; civil society is weak and fragmented, with little interest in
institutionalized participation;and little information is disseminated about the
recent laws. Municipal governments in Peru have the authority to create local
taxes, but only those in larger, wealthier cities have the capacity to do so. On
the whole, then, municipalities depend on transfers, which represented about

Lessons from Latin America's Experience with Participatory Budgeting 111

4 percent of the national government's budget in 2004 and have risen since
then (Schneider and Zuniga-Hamlin 2005). Divided among 2,000 municipal
budgets, however, funding is low. Of the six municipalities examined below,
four had investment budgets of $4�$13 per capita.Moreover,to receive trans-
fers of investment funds, municipalities have to follow strict but little publi-
cized budgeting guidelines set by the national Ministry of Economy and
Finance. Several regional and local governments had to return revenues to the
central government for failing to comply with these rules (Monge 2004).
At the same time, interest in participation appears to have declined.
According to Chirinos Segura (2004, p. 200), in "post-Fujimori Peru . . . the
demand for participation has reached its lowest levels in modern history."
According to D�az Palacios (2004), citizens are not well organized, organiza-
tions that do exist lack formal structures, and organizational representatives
are unrepresentative, poorly qualified, and divided.
One bright spot in Peru is that the Ministry of Economy and Finance
has revised the participatory budgeting guidelines every year, seemingly in
response to criticisms of the original laws formulated by mayors, governors,
and civil society organizations. In 2004, for example, the criteria for munic-
ipal spending were relaxed, so that mayors are no longer forced to allocate
70 percent of funding to capital spending. Changes in 2005 seem to have
corrected other design problems as well (see S�nchezVelarde 2005).The new
guidelines are guidelines rather than legal norms, thus allowing for local
adaptations. They emphasize that the budgets agreed to by the coordination
councils should be respected by the municipal authorities; more clearly
establish the links between the multiyear development plans and the annual
budgets, as well as between the regional and local coordination councils; and
give greater powers to the coordination councils in terms of organizing the
participatory budgeting process. Perhaps most important, the 2005 guide-
lines stress that the participatory budgeting process be open to all who want
to participate and that the participating organizations consult with their
members about budget priorities.

Local Case Studies

While national outcomes appear not to have lived up to expectations, there
are a number of remarkably successful local cases. Some of the success
stories, particularly the Peruvian cities of Ilo and Villa El Salvador, could
have been expected, given that the efforts were locally initiated, United Left
administrations were in power, and highly organized civic associations with
a tradition of local participation were active. Others, such as Curahuara de

112 Benjamin Goldfrank

Carangas in Bolivia and Huaccana in Peru,are more surprising.In Curahuara
de Carangas, an isolated and extremely poor Aymara village in the Andean
highlands, participatory budgeting has not only reinvigorated traditional
indigenous organizations, it has helped transform them to be more inclusive
of women, more engaged with broader indigenous movements, and more
focused on long-term sustainable development. In Huaccana, another rural
indigenous town, the Shining Path guerrilla movement had destroyed
traditional customs and divided the community. Despite very limited
resources, the Quechua mayor stimulated high rates of participation in
participatory budgeting,helped revitalize civic associations,and redistributed
public works and programs in favor of the poor.
This section compares participatory budgeting in 14 municipalities in an
attempt to tease out which combinations of preconditions, institutional
design, and political competition generate successful experiences like these.
Given the variation in the precision of the case study data,these are necessarily
rough categorizations.
All of the municipalities suffer from deficiencies in public services.
These are especially pronounced in rural areas, where even basic services
such as water and electricity are scarce. Resources available for municipal
capital spending vary tremendously, from about $5 to $50 per capita.
The municipalities were governed by a wide spectrum of parties, from
ideologically motivated parties on the left, particularly the United Left in
Peru, to Nicaragua's Liberal Party on the right. The degree of opposition
from traditionally powerful political parties or elites varied from virtually
none (often in rural villages) to relatively strong, especially where old ethnic
divisions were reinflamed by the rise to power of indigenous leaders.
Successful participatory budgeting has occurred under a variety of
conditions (table 3.1). Highly successful participatory budgeting emerged
even where resources were minimal, opposition from rival political parties
was relatively strong, and outside NGOs played no role. Certain conditions
appear to be especially advantageous, particularly a reasonably high level of
resources,a weak opposition,a high level of social capital,a very strong NGO
presence, and a mayor from a leftist, indigenous, or union background.
Levels of social capital are categorized based on the number of associations,
whether they work cooperatively with one another, and whether they engage
in clientelist exchanges. Huaccana is rated as having "weak+" social capital
because it had few civic associations following years of guerrilla warfare but
some land was communally held, which created trust and collaboration.
Tarabuco and Limatambo are rated"medium+"rather than"high"because,
although each has a long tradition of peasant organizing, even longer

T A B L E 3 . 1 Characteristics of Case Study Municipalities in Bolivia, Guatemala, Nicaragua, and Peru

Level of
financial Incumbent Opposition Level of Lessons
Level of success/location Population Ethnicity resources party party social capital NGO presence

High level of success from
Curahuara de Carangas, Bolivia 5,937 Aymara High Indigenous None Strong Very stronga
Huaccana, Peru 11,289 Quechua Low Indigenous None Weak+ Very stronga La
tin
Ilo, Peru 60,053 Mixed High Left Weak Strong Weak America'
Limatambo, Peru 9,264 Quechua Low Indigenous/left Medium+ Medium+ None
Santo Domingo, Peru 10,209 Quechua/mixed Medium Peasant Union None Strong Strong
Villa El Salvador, Peru 344,657 Mixed Very low Left Weak Strong Strong sExperience
Moderate level of success
El Alto, Bolivia 632,372 Aymara/mixed Medium? Center Medium Medium Weak
Tarabuco, Bolivia 20,000 Quechua Medium Peasant Union Strong Medium+ Medium
Estel�, Nicaragua 110,000 Mixed Low Left Weak Medium Strong with
Santo Tom�s, Nicaragua 19,778 Mixed Low Right Weak? Weak Weak
Independencia, Peru 210,807 Mixed Very low Center Weak? Medium Weak Par

Low level of success ticipa

La Union, Guatemala 24,213 Ladino Low Center Medium Weak Weak?
tor
Panajachel, Guatemala 10,919 Maya/mixed Medium Nonpartisan Medium Weak Weak?
civic committee yBudgeting
Nandaime, Nicaragua 38,800 Mixed Very low Right Weak Weak Strong

Source: Bolivia: WBI (2002, 2003, 2004b, 2004c, n.d.-b); Guatemala: Fundemos (2003), WBI (2004a, 2004d, 2004e); Nicaragua: Pineda Gadea (2003, 2004), WBI (2004f, 2004g); Peru:
Ventura Ego�vil (2003, 2004a, 2004b, 2004c, 2004d, 2004e, 2004f).
a. Internationally and nationally based NGOs provided extensive funding and technical aid and encouraged the mayor to implement participatory budgeting. 113

114 Benjamin Goldfrank

traditions of animosity between indigenous peasants and the nonindigenous
population persist.
The high success rate in Peru contrasts with the relative lack of success
in Guatemala. While these cases are only illustrative and do not constitute a
representative sample, this difference probably stems from two related
issues. The highly successful Peruvian experiences began because of local
initiative (except in Huaccana, where Care-Peru chose the town as a pilot
project and Oxfam and the Department for International Development
supported it). These efforts began before the national participatory
budgeting law was passed. In contrast, the Guatemalan experiences followed
the national laws and are much more recent, having begun only in 2003.
Table 3.2 lists key aspects of the institutional design and various measures
of success. The formality of the structure refers to how open the participatory
budgeting process is to individual citizens and how much it privileges existing
organizations and local authorities. The two cases assessed to have formal
structures relied exclusively on existing organizations and authorities. The
cases rated"formal�" also included spaces for individuals to participate.32
Municipalities rated "informal" had open public processes that did not
privilege preexisting groups. Decision-making power refers to whether the
participants debate and decide on spending priorities,how much of the budget
is affected by these decisions,and whether authorities respect the decisions.The
participation rate includes the number of individuals participating and the
number of organizations participating through representatives.
Table 3.2 provides some support for the assertion that outcomes tend to be
better where participatory budgeting is less formalized and more deliberative.
In the two purely formal cases of participatory budgeting (Tarabuco, Bolivia,
and Nandaime,Nicaragua),achievements were meager.In Tarabuco there were
ongoing claims of corruption and clientelism, and the quality of these services
did not improve (although some investments were made in education and
health care). In Nandaime, where the criteria for determining spending alloca-
tions are opaque, an extreme urban bias persists.While a little less than half the
population lives in the urbanized area, which has relatively good basic services,
89 percent of municipal investments were made there.
In Peru and in Curahuara de Carangas, Bolivia, where the structures
were less formal, participants had more decision-making power, participa-
tion rates were higher, policies were more redistributive, and government
was more transparent. Even the most prosperous city using participatory
budgeting in Peru (Ilo) used highly redistributive criteria that allocated
nearly twice as much investment funding to the largest and poorest area as
it did to the smaller, wealthier zone.

T A B L E 3 . 2 Key Aspects of Institutional Design and Measures of Success of Participatory Budgeting in
Case Study Municipalities
Lessons
Country/ Formality of Decision-making Expansion/redistribution
municipality structure power Participation rate of services Transparency

Bolivia from
Curahuara de La
Carangas Formal � High High High High tin
El Alto Formal � Medium High Some Improved America'
Tarabuco Formal Medium High Some Low
Guatemala
La Union Informal Medium Low? Some Improved sExperience
Panajachel Formal � Medium Low? Some Improved
Nicaragua
Estel� Formal � Medium High Some Improved
Nandaime Formal Low Low/medium? Low Low with

Santo Tom�s Formal � Medium High? Some Improved Par
Peru ticipa
Huaccana Informal High Very high High High
Ilo Informal High Very high High High tor
Independencia Formal � High Medium Some Improved yBudgeting
Limatambo Informal High High High High
Santo Domingo Formal � High High High High
Villa El Salvador Informal Medium Very high High High

116 Benjamin Goldfrank

This analysis of local cases reinforces the notion that preconditions,
competitive contexts, and design features are important to successful par-
ticipatory budgeting. It also suggests that no particular combination of these
factors seems necessary.

Conclusions

The conclusions that can be drawn from these case studies are necessarily
preliminary because the precision, type, and quality of data in the studies
vary; the studies were not randomly selected; and many of the experiences
lasted only a year or two.Nonetheless,several general lessons and indications
about future directions of participatory budgeting are apparent.
First, national legal mandates for participatory budgeting have not
created widespread local success in encouraging citizen participation, fiscal
transparency, or effective municipal government. This is partly because
designers of national laws had other goals in mind (possibly in addition to
these goals) and partly because of local obstacles, including reluctant mayors
or opposition parties, the weak fiscal and administrative capacity of
municipal governments, and fragmented, conflict-ridden civic associations.
Second, despite problems, participatory budgeting has succeeded in some
remarkably diverse locales��from small, poverty-stricken, indigenous, rural vil-
lagestolargecities��withresidentswithvariousethnicandclassidentities.While
carefully identifying necessary or sufficient conditions will require further study,
success seems correlated with several factors, in varying combinations:

the mayor is indigenous, from a party on the left, or both;
opposition from local political elites is weak or nonexistent;
national or international aid organizations provide project funding,
technical assistance, or both;
the municipality has sufficient revenues to make significant investments
in public works or programs;
there is a tradition of participation and cooperation within and among
local civic associations or indigenous customary organizations that has
not been destroyed by guerrilla warfare or clientelist politics.

Third,even where participatory budgeting succeeds on some dimensions,it
does not dramatically reduce poverty (especially income poverty) on its own.
For poverty reduction to occur,fundamental principles of participatory budget-
ing as originally conceived (transparency, direct participation, redistribution
toward the poor) need to be applied not only to national levels of government
but to international policy-making institutions as well, under conditions

Lessons from Latin America's Experience with Participatory Budgeting 117

similar to those associated with the local success cases. While at first glance
these conditions seem unlikely to be in place in the near future, the current
wave of left-leaning presidents in much of Latin America, the democratizing
pressure from social movements organizing in venues such as theWorld Social
Forum, and the recent moves toward rethinking on the part of international
financial institutions and aid agencies are positive signs.
Fourth, none of the normative approaches to participatory budgeting
accurately captures its results, which vary extensively across cases. Participa-
tory budgeting does not always strengthen the state with respect to the market,
as radical democrats hope and conservatives fear, nor does it necessarily
insulate pro-market reforms, as liberals hope and the orthodox left fears.
Recent adoption of participatory budgeting by pro-market parties of the
center and the right both inside and outside Brazil challenges the assumption
about weakening the market, while recurring anti-privatization protests in
countries requiring subnational participatory budgeting--Bolivia,Nicaragua,
and Peru--undercut the assumption about insulating the market.
Fifth, the ideological contests surrounding participatory budgeting
continue and are likely to persist. On the one hand, certain international
development agencies with a liberal approach are promoting participatory
budgeting more emphatically and more broadly than ever. Development
agencies are advocating and local governments adopting participatory
budgeting from Albania to Zambia. On the other hand, participatory
budgeting has old and new champions in the recently ascendant Latin
American left. Uruguay's Tabar� V�zquez, the former mayor of Montevideo
who introduced participatory budgeting reforms there with a radical
democratic approach, was elected president in 2004; at least one current
within the governing alliance there is pushing for a national participatory
budgeting process.33
In Venezuela citizen participation in local budgeting and planning
councils is enshrined in articles 168, 182, and 184 of the new "Bolivarian"
Constitution (Nunes 2004). Most of the planning councils in Venezuela
seem not to be functioning as envisioned by the law and may be operating
in a politically biased manner (as in many of the other cases of nationally
mandated subnational participatory budgeting). Still, after a 10-year hiatus,
participatory budgeting has returned to Caracas (Harnecker 2005), and
Hugo Ch�vez recently began advocating participatory budgeting as well,
which will surely evoke protests from conservative traditional parties.
Sixth, the liberal approach to participatory budgeting is currently
dominant: the open, informal, deliberative design pioneered by Porto
Alegre's radical democrats seems to be out of fashion. In Bolivia, Nicaragua,
and Peru parties with a more liberal perspective have implemented more

118 Benjamin Goldfrank

regulated, formal, consultative designs that work with preexisting civil
society organizations. This trend is evident even within Brazil, where some
had hoped that President Luiz In�cio da Silva would implement national-
level participatory budgeting. Instead, Silva's major participatory endeavor
was the series of meetings for the multiyear federal budget that took place
across Brazil's 27 states in 2003. The government invited 70 NGOs to par-
ticipate in each meeting. The process, as well as Silva's government more
generally, has been criticized by Brazil's largest NGO confederations for not
providing open, deliberative spaces of participation.34
In Porto Alegre itself, after four consecutive victories the Workers' Party
lost the 2004 municipal election. Though the new mayor promised to main-
tain participatory budgeting, his administration seems to be deemphasizing
it. Unlike his predecessors, he has not attended participatory budgeting
assemblies,and he has announced a new model,Solidarity Local Governance,
based on government and civil society organizations. As the Secretary of
Political Coordination and Local Governance notes, "Local governance is a
nondeliberative executive forum; it is a networked articulation that seeks to
create co-responsibility pacts.In this space,there is no dispute,no voting,and
no delegates" (CIDADE 2005, p. 1).
Last, to strengthen the future chances of successful participatory
budgeting at the local level,its original principles should be applied to higher
levels of national and international governance. Even in the small number
of municipalities that improved local service provision with participatory
budgeting, low incomes and joblessness remain serious problems. This is
also true of cities with longer traditions of participatory budgeting, such as
PortoAlegre.One of the earliest and most insightful observers of participatory
budgeting, S�rgio Baierle, cites a municipal study comparing the 1981�85
period in Porto Alegre (before participatory budgeting) with the 1995�99
period (after several years of participatory budgeting) (Baierle 2003). While
education and health care improved, the unemployment rate shot up 78
percent, the number of poor people increased almost 20 percent, and
income inequality rose by 16 percent. Local participatory budgeting is not
untouched by national economic policies. As Baierle (2003, pp. 303�04)
notes, "It is impossible to avoid the consequences of macro-politics of
adjustment imposed at the federal level. No matter how fiercely the
deconstruction of the public sector is fought at the local level . . . cities still
control only a thin slice of the national public budget."
Applying participatory budgeting principles of transparency, parti-
cipation, and redistribution to decision-making spheres where larger sums
of money are at stake, may encourage local participatory budgeting efforts
in two ways. First, by producing more universal, egalitarian social policies,

Lessons from Latin America's Experience with Participatory Budgeting 119

it may strengthen local social capital, allowing citizens in very poor coun-
tries to think beyond their next meal. Second, by convincing mayors and
citizens that participatory budgeting is indeed about these principles--
and not politically motivated subterfuge--it may persuade them that it is
worth trying.

Notes

1. The lower figure includes cities in which participatory budgeting began as a local
government initiative; the higher figure includes all municipal governments required
by national laws to consult civil society organizations on budget priorities.It includes
Bolivia's 327 municipalities, Nicaragua's 153 municipalities, and Peru's 1,821 dis-
tricts, 194 provinces, and 25 regions.
2. This formulation borrows from the definition of UN-Habitat (2004).
3. Both parties were elected in 1989 and started their participation programs in 1990.
For a comparison of the two Venezuelan cases, see Maya L�pez (1999). For a com-
parison of PortoAlegre and Montevideo,see Mi�os Chavez (2004b).For comparisons
of Caracas, Montevideo, and Porto Alegre, see Goldfrank (2001, 2002, 2005). The
United Left in Peru experimented with similar participation programs in the mid- to
late 1980s (see Sch�nw�lder 2002).
4. In Brazil participatory budgeting spread gradually, from 12 cities in 1989�92 to 36 in
1993�96, 140 in 1997�2000, and about 300 in 2001�04. The figures correspond only
roughly to the increase in the number of Workers'Party mayors (36 in 1989�92, 53 in
1993�96, 115 in 1997�2000, and 187 in 2001�04).
5. The most thorough account of the left's rethinking is in Roberts (1998).
6. Ruckert (2005) claims that international development agencies promote
participatory planning in order to defend "neoliberal hegemony" by co-opting
"counterhegemonic" ideas.
7. Other Workers' Party leaders also link local-level participatory democracy and par-
ticipatory budgeting to socialism (Daniel and others 2002).
8. This view is promoted by the Unified Socialist Workers' Party as well as some
minority factions within the Workers' Party in Brazil and by a few key peasant and
labor leaders, such as Felipe Quispe, in some Andean countries. For an example of
this approach, see Fontana and Flores (2001). For Quispe's view of Bolivia's Popular
Participation Law, see Altman (2003).
9. For examples, see UN-Habitat (2004), UN-Habitat and Transparency International
(2004), Schneider (2004) on USAID, and Drosdoff (2000) on the Inter-American
Development Bank.
10. The notion of good institutions is related to that of effective state institutions. As
the World Development Report 1997 notes, structural reforms in the 1980s and
1990s were an "overzealous rejection of government. . . . Development without an
effective state is impossible" (World Bank 1996, p. 25).
11. The UN-Habitat division, which vigorously critiqued the structural adjustment
programs of the 1980s and 1990s and the"retreat of the state,"is an exception (UN-
Habitat 2003).
12. Coordinated attacks on participatory budgeting in Porto Alegre did not occur
until the late 1990s, after participatory budgeting was adopted at the state level,

120 Benjamin Goldfrank

where it was subjected to much greater criticism (Goldfrank and Schneider 2006).
For details on the arguments summarized here, see Goldfrank (2002), Nylen
(2003), and the sources cited in Goldfrank and Schneider (2006).
13. Space does not allow all of the relevant works on participatory budgeting to be cited
here. The literature in Portuguese is especially vast. For a review of the literature on
participatory budgeting in Brazil, see Souza (2001). For a compendium of studies of
Workers' Party subnational administrations using participatory budgeting, see
Baiocchi (2003).
14. See also Cabannes (2004), Mi�os Chavez (2001), and UN-Habitat (2004). In my
view, the discussion of the Peruvian participatory budgeting experience by Chirinos
Segura (2004) provides the best conceptualization of the most important factors
affecting participation programs.
15. The UN-Habitat (2004) guide does suggest conditions under which implementing
participatory budgeting is not advisable.
16. Many scholars cite the conflict between the executive and legislative branches that
participatory budgeting sometimes produces; Wampler (2004) focuses on this con-
flict. Observers of citizen participation programs in Peru have made the same point
about the nonneutral character of participation programs and the likely backlash
against them from existing power-holders (Chirinos Segura 2004).
17. Chirinos Segura (2004) makes a similar point about nationally legislated participa-
tion programs. He argues that the most common problem with top-down models is
the resistance they tend to produce from lower levels of government, which see their
authority diminished.
18. Unless otherwise noted, the discussion of the national and local cases is based on
the following sources: Bolivia: WBI (2002, 2003, 2004b, 2004c, n.d.-b);
Guatemala: Fundemos (2003), WBI (2004a, 2004d, 2004e); Nicaragua: Pineda
Gadea (2003, 2004), WBI (2004f, 2004g); and Peru: Ventura Ego�vil (2003, 2004a,
2004b, 2004c, 2004d, 2004e, 2004f). The discussion of Brazil is based on the liter-
ature cited above as well as Villas-Boas (2003) and my own field research on var-
ious occasions from 1997 to 2005.
19. In Bolivia if no party wins a majority of the votes, the city council chooses between
the top two lists, which is similar to the rule for electing the national executive.
20. One notable exception in Brazil is Santo Andr�.
21. In Belo Horizonte, as well as in a few other Brazilian cities, individual participation
and organizational participation are combined.
22. Santo Andr� and Icapu� are exceptions. Both have municipal statutes governing par-
ticipatory budgeting.
23. Cabannes also finds more deliberative types of participation in Brazil than in the
non-Brazilian cases.
24. In Santo Andr�, Brazil, half of all participatory budgeting council members are from
the municipal executive branch, and the mayor presides.
25. Some local governments do this as well, with similarly disappointing results in terms
of citizen participation (Peterson 1997).
26. More generally, Chirinos Segura (2004) argues that the most successful experiences of
citizen participation in Peru have been designed and carried out by local governments.
27. Bartholdson, Rudqvist, and Widmark (2002, p. 47) claim that "no real progress has
been reported with respect to poverty and exclusion, which continue being as

Lessons from Latin America's Experience with Participatory Budgeting 121

ubiquitous as ever." For an excellent, balanced review of the literature on the Popu-
lar Participation Law, as well as interesting original research, see Altman (2003).
28. Input from a wide range of actors was important to the peace process, but Mayan
organizations complained of being excluded (Warren 1998).
29. The author thanks Yann Kerevel for providing several of the sources for this section.
30. President Alem�n had a reputation for corruption while mayor of Managua. In 2003
he was convicted of money laundering and misappropriation of funds, among other
charges, after allegedly stealing more than $100 million from the national govern-
ment. For Nicaragua's struggles with corruption, see the Global Integrity Web site
(http://www.globalintegrity.org/2004/country.aspx?cc=ni&act=notebook).
31. Henry Pease Garc�a, for example, who was active in the United Left's administration
of Lima in the 1980s, became president of the Congress for Per� Posible and was a
strong supporter of participatory budgeting.
32. One exception is Curahuara de Carangas, where the structure of participation is
based on all 10 preexisting indigenous organizations (ayllus) and the one neighbor-
hood association,which included everyone in the central village.These organizations
cover the entire population and are thus representative, unlike many of the organi-
zations in other municipalities.
33. For a discussion of the national participatory budgeting proposal, see Mi�os
Chavez (2004a).
34. For examples, see the critique by the coordinator of IBASE (Dantas 2004) and the
summary of the NGOs' reaction in Goldfrank and Schneider (2006).

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Participatory Budgeting in
Central and Eastern
Europe
a l t a f � l s c h e r

n a democratic context and from a human rights perspective,
I
civic engagement in public affairs is a desirable end, valued for
itself. Civic engagement is also seen as instrumental to state effec-
tiveness. When citizens have the opportunity to make their needs
known and hold public institutions to account, public resources are
likely to be used more efficiently to deliver public goods and services
that are better aligned with citizens' needs.
Recognition of the potential of civic engagement in public
affairs is widely shared. There is less consensus on what level of
engagement is desirable and what form it should take. Increasingly,
it is argued that participation in public affairs through elected rep-
resentatives is insufficient, that the aims of social accountability,
functional democracy, and optimization of public resources are
best served if citizens also engage with public processes between
elections and do so directly.
Participatory budgeting in the broad sense refers to citizens'
engagement with public budgets, including such mechanisms as
analysis by civil society of spending policies as an input to public
debate.A narrower use of the term denotes instances in which citizens
provide direct input into decisions about public resource use,usually
at the local level of government.

127

128 Alta F�lscher

In addition to electing representatives to local councils, citizens in some
local municipal and submunicipal areas of Central and Eastern Europe are
participating in public resource decisions. This chapter discusses selected
examples of such participation. It focuses on the environments within and
the mechanisms through which citizens engage with the allocation and use
of public resources and on the impact such initiatives have had. The chapter
draws on studies on the Russian Federation and Ukraine undertaken for this
volume, as well as other studies.
Because of their shared history during much of the 20th century, the
countries of Central and Eastern Europe share many similarities. These
countries also differ in important ways, as a result of local economic, social,
cultural, and political dynamics, both before and after the collapse of the
Soviet Union.
All accessible and reasonably well-developed examples from Albania,
Armenia, Bulgaria, Moldova, Poland, Romania, the Russian Federation, and
Ukraine were included in the analysis. A range of countries and case studies
allows preliminary conclusions to be drawn about how differences in the envi-
ronment may affect the impact and sustainability of participatory budgeting.
The use of case studies is limiting in several ways, however. First, relying
solely on cases that are in the public domain means that other instances of
citizen participation are not examined. Second, the literature focuses on
cases in which citizen participation resulted from an initiative funded by
donors or international nongovernmental organizations (NGOs). Third, the
source material for some cases (Albania and Romania) was prepared by
project staff, which may bias findings. Fourth, the selection of case studies
may be biased in favor of initiatives that achieved some success: there are no
assessments of initiatives that failed.
The chapter is organized as follows. The next section examines common
features in the environment that affect the nature and impact of participa-
tory budgeting practices in the region. The second section groups examples
by the nature of participation, examining the relations among environmen-
tal factors, initiative features, and impact. The last section distills lessons
from the examples. An annex provides details on participatory budgeting
from each case study.

The Central and Eastern European Context

Until the early 1990s, power in most of the states in the region was centralized,
with little formal discretionary power at the local level. For several generations
central governments kept tight control over most aspects of public life:citizens'

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 of the central state. The role
of the state was pervasive and prescriptive, and freedom of association 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
of public goods. This affected the local government environment, citizen atti-
tudes toward the state and service provision, and the size, nature, and depth of
organized civil society.
With the collapse of the Soviet Union,the structure of central-local inter-
governmental relations and state-citizen relationships changed.States passed
new constitutions providing for autonomous local governments. Constitu-
tional change was often followed by development of the legislative framework
at the national, state, and local levels of decision making to provide for an
independent level of local 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 of the 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 of collective action, and are passive receivers of public services.
Collective forms of political and social organization, such as political
parties and civil society organizations (CSOs), are relatively new, as is an
elected, independent, and autonomous local level of government.
Intergovernmental fiscal relations systems are still being developed; roles
and responsibilities are weakly and ambiguously assigned to local levels.
The expenditure responsibilities of local 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 of the equation (governments and citizens) in order to achieve

130 Alta F�lscher

positive and sustainable impact (Abers 2003; Goetz and Gaventa 2001).What
institutional environment do local governments in the region face? What
capacity do citizens and nonstate actors in the region have to participate in
participatory budgeting?

The Institutional Environment of Local Governments

Despite an improving legislative environment for local government, in most
of the case study countries,policy implementation occurs within an ambigu-
ous legal framework in which roles and responsibilities are unclear. Local
governments have limited authority over and limited discretion in their
expenditure responsibilities, both because of their weak fiscal capacity and
because of the intergovernmental system. In some countries the roles of local
governments are not clarified through the further development at lower
levels of the national framework legislation.Most countries also lack legislated
mechanisms for participation (a notable exceptions is Bulgaria [box 4.1],
where national legislation elaborates the mechanisms for participation).
Conflicting provisions in different legislative instruments are also common.
This results in ambiguous legal frameworks in Albania (Banks and Pigey
1998; Urban Institute 2004); Armenia (Doane, Simpson, and Rabenhorst
2000); Bulgaria (Novkirishka-Stoyanova 2001); Moldova (Viitorul 2004);
Poland (Levitas 1999); the Russian Federation (Krylova 2005a; Savranskaya
2003); and Ukraine (Krylova 2005b).
In all countries in the region, the principle of local self-government is a
driving factor in the framework legislation. Many countries are signatories
to the European Charter of Local Self-Government, which envisages local
governments as independent, autonomous local organs of government
elected through equal universal suffrage and with meaningful provision for
citizen participation in decision making.
In practice, local governments remain constrained in carrying out their
public service delivery functions. Expenditure responsibilities are not
matched with revenue capacity. Local governments are assigned very few
taxes, and even then the rates are often set by a different level of government.
Local taxes, particularly land and property taxes, are often difficult to assess
and collect. The transfers from shared revenue sources, such as income tax,
are not transparently assigned or reliable.
In many countries the first (municipal or village) or second (typically
rayon [regional]) levels of local government have delegated expenditure
functions for which they are accountable to state or national functional
departments of expenditure. Local government budgets are reviewed or

Participatory Budgeting in Central and Eastern Europe 131

B O X 4 . 1 The Bulgarian Legal Framework for Citizen Partici-
pation in Local Self-Government

Like many other countries in the region, Bulgaria is a signatory to the
European Charter of Local Self-Government. Unlike other countries, its
Constitution and national legislation set out mechanisms for citizen par-
ticipation in local self-government, including referendums, community
meetings, subscription mechanisms, and regulated contact with the
mayor. Bulgarians also have the right to demonstrate, to attend meetings
of standing committees of the municipal council, and to attend open
municipal council meetings.
The Bulgarian Constitution provides for indirect and direct partici-
pation in local referendums and community meetings. Referendums can
be called by one-quarter of registered voters in a locality or by at least
one-quarter of councillors. The outcomes of referendums are binding on
local government.
Local meetings can be called on issues of local importance, such as
sanitation, public works, use of municipal property, and protection of the
environment. These meetings can be initiated by the city council, by the
mayor, or by one-quarter of voters. Decisions are legitimate if more than
half of all voters attend the meetings and the majority of participants vote
in favor of a proposal. The municipal council can reform or revoke the
decisions of meetings on request of the mayor, but only after deliberation
and voting.
The subscription mechanism can be used to bring decisions to the
attention of the municipal council. A subscription can by initiated by 100 or
one-fifth of all voters, whichever is smaller. A steering committee must be
set up to manage the process. The framework allows the initiators of a sub-
scription one month to collect signatures; the subscription is recognized if
at least one-quarter of voters support it. The municipal council has one
month to consider the subscription; the final decision rests in its hands.

Source: Novkirishka-Stoyanova 2001.

approved at higher levels. This is the case in Albania and Ukraine. The
authority and discretion to make expenditure decisions in line with local
needs are therefore limited. Roles and responsibilities are opaque, reducing
accountability.
As relatively recent structures operating in a murky intergovernmental
environment, local governments have little capacity to plan, budget, or
implement expenditure responsibilities or to motivate higher levels of
government to increase the level of resources. Local governments in some
countries have been restructured more than once in an effort to create viable

132 Alta F�lscher

units or to adjust the emerging power balances between central and territorial
governments. Restructuring destroys the emerging capacity to design viable
budgets, advocate for funds at higher levels, raise financing, and manage and
evaluate budget implementation.
These factors reduce citizens' belief that local government can solve their
problems,and they diminsh their interest in participating in decisions (Doane,
Simpson, and Rabenhorst 2000; Urban Institute 2004). Citizen participation
is further discouraged by limited access to information and lack of knowledge
of local government responsibilities and citizen rights.Local own revenues are
usually the least significant portion of local government revenues and the least
significant portion of taxes paid. This undermines the development of citizen
interest to track how their tax contributions are used locally. Citizens are
generally dissatisfied with services, but they mistrust local governments and
are unwilling to pay taxes, adding momentum to the vicious cycle. Local
governments lack the support of local citizens when advocating for more
resources at higher levels of government or claiming their right to autonomy.

Citizens and Organized Civil Society

Several factors make citizen participation in government difficult in the
region. First, governments developed in a context in which government was
traditionally opaque and harshly discouraged citizen participation in public
affairs. Second, in rural areas, citizens are often poor, disempowered, and
involved in a daily struggle for basic household survival, limiting their interest
in communal affairs. Third, many urban residents have little access to power
and resources and are excluded from key decisions affecting them. Fourth,
fixed attitudes within government and citizens' beliefs about government
often hinder enabling environmental factors from developing. Citizens do
not perceive social infrastructure to be their responsibility. Indeed, in
Moldova and the Russian Federation, citizens are suspicious of activities that
are collective and contribute to the public good (see,for example,Ovchintseva
2003, Tiurin 2003, USAID 2001).
The literature on governance and social development suggests that
intermediary organizations, such as NGOs (or nonstate organizations) and
community-based organizations (CBOs), have a key role to play in encour-
aging socioeconomic development, improving state effectiveness, and
spurring the growth of meaningful democracy (Azfar and others 1999;
Dongier and others 2002; Krishna 2003; Malena, Forster, and Singh 2004).
Organized civil society provides citizens and governments with information,
acts as a conduit for voice,holds government actors to account,and organizes

Participatory Budgeting in Central and Eastern Europe 133

collective action. It can mitigate citizens' own weak capacity for meaningful
participation and help develop that capacity.
Organized civil society started emerging in the case study countries only
after the collapse of communism. Several patterns are evident (Karatnycky,
Motyl, and Schnetzer 2001; Krylova 2005a; Kuts 2001; Ovchintseva 2003;
Preci 2002; Urban Institute 2004; USAID 2001; World Bank 2003):

Civil society has developed more rapidly and is better able to play a mean-
ingful role in decision making in countries that faced a range of transition
issues and were not focused on independence from the Soviet Union
(Albania, Bulgaria, Poland, Romania).
In all countries, national CSOs have more sophisticated organizational
structures, better infrastructure, and better capacity in larger cities than
in smaller cities, towns, or villages.
The role of organized civil society is still often viewed as replacing
government in the delivery of services.
CSOs face major obstacles to financial sustainability. In countries where
civil society development is still low (such as Moldova),the lack of funding
is acute.
Many countries (such as Ukraine) lack enabling legal frameworks for
citizen participation. In others the existing frameworks hinder the devel-
opment of civil society.
Competition for scarce resources strains relationships among local CSOs,
preventing them from forming coalitions.
Not all CSOs adhere to standards of ethics, transparency, and good
governance, hindering the development of trust between citizens and
organized civil society and between local government institutions and
organized civil society.
The development of organized civil society benefits from cross-border
exchanges and exposure to international successful practice.

The Political Context

According to Goetz and Gaventa (2001), the nature and organization of the
political system help determine the level and quality of participation of
citizen groups or lobbies (the civil society environment) and the nature and
power of the state (the local government environment). An interest group
may be equipped with all the preconditions for effective engagement (social
organization, relationships with powerful actors, sympathy in the broad
population, and "even a crisis event to concentrate public concern on the

134 Alta F�lscher

group's needs"), but the political environment may frustrate success if "the
group does not contribute to prevailing political agendas or patronage
systems" (p. 11). Informal political systems affect the incentive structure for
citizen engagement: if citizens perceive that participation is likely to be inef-
fective given the nature of power and the distribution of power in society,
they are unlikely to engage. Fox (2000) claims that the political system can
also undermine public accountability.
The regional case study literature rarely provides an assessment of the
impact of local or national political institutions on the level and quality of
citizen participation.It does,however,indicate the importance of a functional
multiparty system. In many of the case study countries, political party insti-
tutions are still weak. When parties are still based on "personalism and
clientelism,"lack policy platforms, and rely instead on the politics of identity,
civil society groups are less likely to gain an effective voice (Goetz and
Gaventa 2001, p. 11). Development partners and international NGOs often
initiate participatory budgeting practices in the region in the hope that
improving citizen participation at the local level will improve service delivery
and contribute to accelerated democratization of these societies.An assessment
of the political dimension is therefore important.
The negative institutional and political context of local government--
together with the absence of countervailing forces of citizen interest
and capability to act and the lack of vibrant organizations able to mobilize
and support citizen action--should have hindered the development of
participatory budgeting practices in the region.Yet as the case studies show,
citizens are participating in resource decisions of local governments across
the region.

Case Studies of Participatory Budgeting

Very different types and levels of citizen engagement with public resource
decisions are called participatory budgeting. McGee (2003) distinguishes
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 instru-
ments of participation.
This chapter uses this typology of participation, with one addition,
information generation. In some countries in the region, CSOs have used
applied budget analysis as a policy advocacy tool and disseminated their
findings publicly. These activities typically generate information on public
policy and services outside the state in order to influence state actions. This

Participatory Budgeting in Central and Eastern Europe 135

form of participation represents a first level of participation, which can be
positioned on the ladder one level below shared information.
These five types of participation in the budget process can be grouped
into two broad categories: initiatives that are dependent on the state's providing
information and space for engagement (information sharing, consultation,
and joint decision making) and initiatives that can survive more independently
from local government administrations (information generation and direct
initiation and control). As the case studies show, sustainable and effective
participatory budgeting is contingent on some willingness on the side of
local governments to provide information and to engage.

Information Generation

CSOs around the world have gained voice in the public arena by analyzing
public policy, budgets, and service delivery (see Falk 2001 for examples). The
results are made available to decision makers and stakeholders either directly
or through the media, in an effort to influence decision making and build
capacity elsewhere for engagement with public policies. The public policy
and service benefits include enrichment of the public debate and improved
accountability for policy making and implementation. Such work can serve
as a catalyst for public participation and collective action.
Many of the case studies discussed in the next section (on information
sharing, consultation, and joint decision making) include information-
generation activities by civil society as an input into joint local government-
citizen activities. The two case studies described in this section are unique in
that they originated locally within strong CSOs, without consultation with
or negotiation space provided by local government.In both cases such spaces
were eventually created, perhaps suggesting that CSOs faced with poor local
governance practices could initiate participatory processes through applied
budget work.
These two cases described here employed three different types of infor-
mation generation activities that can be used to make room for space for
engagement in the public arena: analysis of the quality of policy and budgeting
institutions at the local level,analysis of public policy and budgeting decisions,
and research on the quality of public service delivery. In both cases the
organizations made efforts to:

ensure the legitimacy of the work by using rigorous methods and gener-
ating good-quality information;
build local coalitions with other CSOs;

136 Alta F�lscher

raise public awareness and support by using local media channels;
build understanding and capacity in the cities and media through seminars;
ensure successful dissemination of the results, through the media, special
events, and other means.

Both of the organizations had contact with international NGOs that facili-
tated the adaptation of successful practices from elsewhere. Both also had
access to external funding (from the Ford Foundation in the case of Strategiya,
from the World Bank and the Canadian International Development Agency
in the case of the People'sVoice Project).Both CSOs increased the public space
for engagement and built a functional partnership with local municipalities.
Access to this space is not broad based, however. A common criticism of
public participation initiatives is that because of the need for specialized
capacity to undertake technical work, such initiatives tend to limit participa-
tion to those who already have access to power and resources.While the devel-
opment of partnerships between local government organizations and local
citizen organizations should be seen as a positive development, and the more
diverse analysis of public policy issues may improve the quality of outcomes,
there is a risk of co-option by the state of scarce civil society capacity when the
public space for participation is not meaningfully extended to a broader base.

Tsentr Strategiya's activities in the Russian Federation

In 1998 the NGO Tsentr Strategiya initiated its program in St. Petersburg
and eight other Russian cities (Krylova 2005a). At first the project, which
drew on successful practices used elsewhere in the world, focused on
research on budget transparency at the city level and mechanisms for citizen
participation. The logic was that without good information and some access
to decision processes and decision makers, engaging with the allocation and
use of public funds would be of limited value. The initial research drew on
international assessment frameworks and built support among local NGOs,
academic communities, and the mass media to advocate for improved trans-
parency. Tsentr Strategiya and its partners in other cities built capacity to
engage with budgets and shed light on how municipal governments were
using resources. In 2002 the project achieved enough legitimacy that it
expanded its activities, working with local municipalities to develop joint
mechanisms for participation.

The People's Voice Project in Ukraine

The People'sVoice Project,a local NGO,initiated analysis and policy advocacy
on women's issues, education, and public budget and economic issues in two

Participatory Budgeting in Central and Eastern Europe 137

Ukrainian cities,Ternopil and Ivano-Frankivsk,in coalition with local partners.
It started its work by raising public awareness and educating local munici-
palities on citizens' rights, the need for responsiveness, and the benefits of
building local voice (Zakharchenko 2002). In partnership with other local
NGOs, in 2000 it created a program of citizen report cards, which measure
citizens' attitudes toward public service delivery and specific services. The
project organized a national conference to discuss the results of the report
cards. The findings of the survey have been used extensively in public debate
on municipal resources and public service issues as well as in subsequent
budget and policy formulation (Holdar 2002). Building on this earlier
work, the People's Voice Project and its partners are now developing local
strategic plans.

Information Sharing, Consultation, and Joint Decision Making

In the case studies discussed in this section,information sharing,consultation,
and joint decision making often occur together. Budget hearings take place
in localities where municipalities provide better information on their resource
use. The hearings are frequently accompanied by other mechanisms that
draw citizens into decision making, such as capital investment planning
committees. Efforts are initiated by local governments. However, different
localities use very different mechanisms to achieve these three aims, and
localities focus on different aspects of public resource decisions.
The cases in this section describe two mechanisms for soliciting citizen
input in a systematic way, both of which increased participation. In Armenia
the project was initiated by a third party and encountered resistance from
city officials. The high expectations of citizens were difficult to manage,
particularly given local governments'lack of administrative and fiscal capacity.
In contrast, in Zwolen, Poland, the mayor initiated the program, reducing
resistance by city officials, who participated in the initiative. Care was taken
toensurethatresourceswereavailable,givingcitizensanincentivetoparticipate.
In both cases the information-gathering effort was largely one-directional:
citizens provided information on preferences but did not necessarily engage
in dialogue with the local government.

Participatory urban assessment in Armenia

Save the Children and the Urban Institute undertook a pilot project of
participatory urban assessment in nine cities in Armenia. The aim of the
assessment was to bring more citizen voice into capital planning. A team of
consultants initiated the project by conducting research on each of the cities

138 Alta F�lscher

to generate a preliminary list of problems that could be addressed in the
capital budget. The cities were divided into districts, each representing a
community. A series of meetings was then held with each of the districts. At
the first meeting, the initiative was explained. Citizen action groups were
elected in each community through direct voting at the meetings. Repre-
sentatives from these groups were subsequently elected to serve on the city
capital planning committee. In a second meeting, participants were asked to
rank problems. The results from all meetings were submitted to the city capi-
tal planning committee for consideration for the capital plan. The process
resulted in 277 proposals to the committee, putting significant pressure on
city officials. The initiative involved more than 10,000 citizens, out of a
population of about 500,000, in the nine cities.

Capital investment cards in Zwolen, Poland

Zwolen is a small city in eastern Poland. Its 17,000 inhabitants are repre-
sented by 22 city councillors. Both the local authorities and citizens are open
to new ideas and new management tools. On the mayor's initiative, in 1998
they developed a multiyear capital investment plan that involves citizens at
all stages of the process. The city distributed capital investment cards widely
to citizens, inviting them to express their development priorities.
At the outset, the city made the rules of the process known, setting out
a detailed schedule for implementation and a method for prioritizing and
ranking proposed projects. Three criteria were emphasized: improving the
city's economy, creating work, and increasing city revenues. The city also
appointed an implementation committee to oversee the process and mediate
the decisions. The implementation committee worked closely with the city
treasurer to ensure that expectations for resources were realistic. Existing
projects were also emphasized and considered. The final draft of the budget
was approved by the implementation committee, the city board, and the city
council (Natkaniec 2002).

Advisory Groups, Bodies, and Committees

Local governments sometimes engage citizens on their priorities and needs
indirectly, through some form of representation. Citizen advisory groups
offer local governments a mechanism with which to "bring some of the
technical expertise and opinions of communities to bear on solving local
government problems"and"enhance the dialogue on relevant issues in order
to resolve conflicts" (Serban 2002, p. 4). Advisory groups also demonstrate
local governments'commitment to transparent and democratic government.
They are, however, more exclusive than initiatives that combine information

Participatory Budgeting in Central and Eastern Europe 139

gathering with more intensive efforts at engagement to collect information
on citizens' opinions.
In the Gatchina Rayon, in the Russian Federation, the municipality
appointed local leaders to provide them with advice. In the Maikop Rayon,
nine villages were pro-active in making their affairs more transparent and
inviting citizen participation. In some Russian cities, budget roundtables
have been held at which selected expert members of civil society have met
with municipalities on specific issues. Citizen groups have also been successful
in Albania and Romania.

Participatory budgeting councils in Albania

A World Bank�funded project in Albania, implemented through the Urban
Institute in partnership with local NGOs, used participatory budgeting
councils and a redesigned budget process to improve citizen participation in
budgeting. The project selected municipalities in which the local govern-
ments were willing to include participatory mechanisms in the budget
process, development partners were already active, and a minimum base of
organized civil society groups existed.
The project began with an awareness campaign on citizen and local
government rights and responsibilities. It then divided each locality into
zones. At a first public meeting in each locality, local government officials
presented budget forecasts and information on the implementation of the
current budget. At a second meeting, representatives to the participatory
budgeting council for the locality were elected. This meeting also identified
priorities for the neighborhood. The council and local government staff
subsequently conducted field visits (a "bus caravan") in order to evaluate
priorities, constraints, and possible solutions with citizens. The caravan
process exposed officials and citizens to each other's pressing issues and
problems. The council then underwent intense training on priority setting
and financial planning before proposing plans to the city councils, which
made the final decision.
One of the shortcomings of the project was the difficulty of getting
broad-based participation. Participation of women was uneven, and outlying
localities were difficult to reach effectively (Urban Institute 2004).

Citizen advisory groups in Brazov, Romania

Brazov is a city with 350,000 inhabitants. In 2000 it held its first budget hear-
ings, attracting fewer than 50 people. The following year participation
increased to 600 participants; advisory groups (on transport, education, and
general issues) were established; and the Brazov Citizen Information Center
was created.

140 Alta F�lscher

The main purpose of the transport committee is to assist the transport
authority in developing city transport modalities and to provide input into
budgeting for transport. The committee is made up of citizens from various
user groups, who were elected. The education committee is tasked with
assessing the infrastructure needs of schools, making recommendations on
priorities, and monitoring the transfer of education functions from central
to local government. The Citizen Information Center supports the commit-
tees by explaining the capital budget and providing technical support. It
operates as the hub of a network of 35 neighborhood committees, which
monitor the use of the capital budget against neighborhood needs. Brazov
learned and developed expertise by doing, and the quality of participation
improved every year (Serban 2002).

Public Meetings and Budget Hearings

Several countries have legal frameworks that provide for public meetings
andbudgethearingsasmechanismsforoperationalizinglocalself-government.
These mechanisms have increased participation in Bulgaria and Ukraine.
The literature on social investment funds includes many examples of
development benefits accruing from competition among communities for
resources, particularly if the rules of competition are transparent and
enforced and the program includes community-level education and capacity
building. The Svishtov case study described below is not unlike a social
investment fund, except that communities compete for public resources
within the city budget.

Capital investment planning in Svishtov, Bulgaria

Svishtov,a port city of 49,000 on the Danube River,is a fishing and agricultural
center. In the early 2000s the city created a capital investment plan that
distinguished between large infrastructure projects, which are financed
externally,and smaller,community-specific projects,which are funded by the
city budget through a participative process. This two-part investment plan-
ning is now an institutionalized part of budgeting in the city (Driscoll 2002).
Svishtov has also implemented other strategic budgeting mechanisms.
It has a forward planning horizon on its capital budget, enabling tradeoffs
to be made over time, and it has moved planning from a project-by-project to
a programmatic basis. Citizen inputs are used to determine which programs
receive attention in the budget (upgrading sidewalks, improving city
parks, maintaining child care centers). Citizen applications for funding
under the budget, within the selected programs, are invited through a series
of community-based public hearings. Clear criteria and procedures have

Participatory Budgeting in Central and Eastern Europe 141

been set for selecting projects,and communities can offer co-financing.A steer-
ing committee, with municipality and civil society representation, decides
which projects within the programs will be proposed to the council. Criteria
include the participative nature of the project, the level of co-financing, the
economic and social benefits, the maintenance costs and responsibilities,
and technical considerations. The steering committee prepares the plan for
approval by the city council.
Svishtov applied good budgeting principles (resource-constrained,
forward-horizon, programmatic planning; rationality in decision making
and transparent rules; and sustainability of forward recurrent costs) to
ensure that participation is engaged on real issues and provides real payoffs
to citizens who participate. The fact that participation has been growing
suggests that its efforts to involve citizens have been successful. Additional
resources for capital investment have been provided within the city budget,
and citizen interest in maintaining the resulting infrastructure has grown,
adding to sustainability and reducing city costs in future years. This is the
only case study that provides concrete evidence that the initiative had any
impact beyond improving participation.

Public budget hearings in Kemyanets-Podilski, Ukraine

Kemyanets-Podilski (population 99,000) was the first city in Ukraine to
adopt public budget hearings as an integral part of the budget process. This
mechanism is part of the legal framework for local self-government in
Ukraine. The mechanism is mandatory, but compliance is low.
The first hearings were initiated by a CSO, in partnership with the local
government. Clear rules govern the initiation and management of hearings:
public hearings can be initiated by a group of residents (1 percent of the
entire population or 5 percent of a neighborhood's population), by the town
council, or by the mayor. A written initiative is registered and then
announced in the media. Within five days the preparation plan needs to be
approved. This includes establishing a hearing committee, forming expert
groups, and setting the schedule. Government officials and members of the
initiating group serve on the hearing committee, together with municipal
council members and representatives of NGOs. The hearing is advertised
through local media. Budget hearings are often supported by research
conducted by local academics. Surveys (that include the most vulnerable
populations) are conducted on citizens'priorities for local budget allocations.
Within a month of initiation, the public meeting is conducted. The
budget hearing is held in December, before the local council meets to decide
the budget. The meeting is chaired by the head of the hearing committee
and is attended by representatives of the municipal council and executive,

142 Alta F�lscher

lower-level (village or neighborhood) self-government organizations, and
NGOs.1 Budget hearings start with a report on the previous year's budget
and presentation of the following year's plan. Local officials then explain
different aspects of the plan before fielding questions. If disagreement
occurs, organizers attempt consensus. The minutes of the meeting register
all opinions.Within three days, copies of the minutes are sent to the municipal
council secretariat and the initiating group and are posted on the municipal
information board. The secretary of the council summarizes the outcomes
and submits them for consideration at the next council assembly for budget
planning (this assembly is open to the public). The outcomes of the sup-
porting polls and surveys are also reported to council members. The results
of the meeting are published in the official municipal newspaper.

Initiation and Control by Stakeholders

Following capacity building and technical assistance from development
professionals, some communities have actually initiated public projects,
raised the funds to finance them, and managed implementation.

Village responsibility for finances in Maikop Rayon, Russia

Villagers in the municipality of the Maikop Rayon are responsible for their
own finances. They identify priorities, raise and allocate funds, and operate
the village bank account. Villages in the rayon are now more active in local
public infrastructure development as a result of community efforts, seven of
the original nine villages in the project now have a gas supply, trade has been
reorganized, and working phones have been installed.

Community solutions to problems in Zaozerie, Russia

Zaozerie is an impoverished village in the Mezen Rayon, Arkhangelsk
Oblast. After the local collective farm was closed, the village of about 25
homesteads faced high unemployment, the collapse of social services, and
ongoing emigration.
A participative project was implemented by the Institute for Public and
Humanitarian Initiatives, the Mezen Rayon administration, and the
Arkhangelsk Oblast government.The institute started with a series of seminars
with the rayon administration on the principles of rural self-government.This
was followed by meetings, speeches, and discussions with village residents to
educate them on their rights and responsibilities. Villagers were at first
unwilling to take any action. They got involved when the institute acted in
cooperation with village leaders and raised funds for small infrastructure

Participatory Budgeting in Central and Eastern Europe 143

projects (repairing the village well and renovating the local clinic).As citizens'
interest and confidence grew, villagers decided to provide a center for the
elderly. Completion of this center was an important turning point for the
villagers, who have since hired a midwife, repaired the local school, and
improved the clinic. The project has changed the village mindset about who
is responsible for solving the village's problems.

Conclusions and Lessons Learned

With few exceptions, development agencies or international NGOs were the
initiators of participatory budgeting mechanisms in Central and Eastern
Europe.Even where initiatives resulted from local action,international organi-
zations funded the key organizations and contact with networks of CSOs
worldwide preceded local action.While this does not necessarily detract from
the value of the initiatives, it may have implications for sustainability.
Local government autonomy and resource availability, citizen organi-
zation and interest, and developed political party systems are often seen
as prerequisites for successful participatory budgeting.In Central and Eastern
Europe, these mechanisms are proposed as entry points to overcome gov-
ernance weaknesses.
Three sets of questions are relevant when assessing the value of partici-
patory budgeting mechanisms in the case study settings:

Didtheinitiativesimprovetheabilityof citizenstoparticipateingovernment
decision making? Did they improve citizens' capacity? Did they expand
public space for engagement?
Did the initiatives improve the effectiveness of local government? Did
they increase the investment and the quality of public services? Did the
initiatives lead to more equitable investments? Were better and more
relevant decisions about resource use made?
Can participatory budgeting initiatives function as an effective entry
point to catalyze national change and build good governance systems?
Did the reviewed initiatives bring about more and better participation?

In all cases, the introduction of participatory mechanisms increased
participation.Even where citizens were passive providers of information about
their preferences, the initiatives signaled a changed mindset and offered more
opportunity for participation than existed before. It is not clear, however,
whether the nature of participation was sufficient to ensure its sustainability: if
participation does not result in real change,it discourages future participation.

144 Alta F�lscher

It is also not clear that the mechanisms in place ensure inclusiveness:
while participation by those who already have the capability to engage is
perhaps better than no participation at all, it is inferior to mechanisms that
draw in those who have traditionally been excluded. The case studies suggest
that inclusive participation is difficult to achieve: women, vulnerable groups,
and people living in remote areas are easily excluded. Interestingly, cases
toward the upper end of the participatory scale seem to have provided more
opportunity for good-quality, broad-based participation.
Did the reviewed initiatives result in more effective local government?
The evidence is not clear. As Krylova (2005a, 2005b) notes, it is difficult to
assess the degree to which citizen participation contributes to changes in
resource allocations, as the counterfactual is not readily available.
Where information on citizens' preferences is collected at the local level
and the activity was initiated by the local government,the results are included
in future plans.The extent of this inclusion is not clear,but it seems to be con-
tingent on subsequent decision-making mechanisms (such as implementa-
tion committees). Whether narrower interests determine which citizens'
preferences are included when decisions are finally made is not clear.
There is some evidence that advisory groups produced real effects. In
Brazov,Romania,theadvisorygrouponeducationhadrealinputintodecisions
on which schools were upgraded and in which sequence. Whether limited
participation (only a few citizens can be elected to committees) leads to better
resource decisions is not clear. The value of advisory groups depends on the
incentives in place for citizens who get to participate. If members of citizen
advisory groups are likely to be held to account by their fellow citizens for
the outcomes of their participation, they may be more likely to provide
good-quality, nonpartisan inputs. In the absence of such accountability--
which may be likely, given citizen apathy--the value of such participation
mechanisms may be limited. Members of participatory structures will be
absorbed easily into the existing power structures. This may mean that these
mechanisms' usefulness in addressing broader governance weaknesses
depends on a robust citizen-state governance environment.
The extent to which public budget hearings and meetings increase local
government effectiveness (measured as improved service delivery that better
reflects citizen preferences) seems to depend on the institutional arrange-
ments accompanying the hearings. In Svishtov, Bulgaria, outcomes were
good: citizens competed for real resources and exercised real choice, and co-
financing resulted. In Ukraine, where the hearings were more general, the
outcomes seemed to be more indirect: participation was greater, and there
was more engagement with local government decisions, which may lead to
improved accountability and better service delivery in the longer term.

Participatory Budgeting in Central and Eastern Europe 145

Where citizens initiate and control outcomes,infrastructure and services
are provided that would not otherwise have been available. In three of the
cases--Svishtov (Bulgaria), Zaozerie (Russia), and Maikop Rayon (Russia)--
the opportunity for citizens to initiate projects led to an increase in the volume
of resources available for local development.
Can these initiatives improve governance? Evidence from the case studies
is weak. In Strategiya, Russia, advocacy on governance issues resulted in
institutional changes. Elsewhere both local government officials and citizens
became better informed of their rights and responsibilities as a result of
participatory efforts.
Are these initiatives scalable? Can there be a shift from isolated initiatives,
often introduced or supported by development agencies and international
partners, to overarching programs that are a defining element of public
action for citizens in the region? More important, can these initiatives
produce results if capacity in government is low, the citizen-state relation-
ship is not rooted in state accountability, and the center of government is
weak? There is no evidence in the case studies that this is possible. In fact, at
least in countries that are homogeneous and the center holds the balance of
power but has weak governance,there may be an opportunity cost of investing
in local-level governance and a real cost in terms of citizens' disillusionment
in trying to engage government.
The following conclusions can be drawn from the case studies:

Initiatives create opportunities for participation. Questions remain about
whether the quality of participation is sufficient to ensure lasting interest
and whether participation is sufficiently broad based.
Initiatives can break down barriers between citizens and government,
improving mutual understanding and communication.
Initiatives strengthen local CSOs, which may improve local governance
over the long term. However, it is not clear that the organizations that gain
access to decision making and forge partnerships with local government
do not themselves become arms of local government.
Initiatives can direct resources to more relevant infrastructure and services.
Initiatives can increase additional revenue for local development.

These benefits do not result automatically. Certain conditions facilitate
effective participation. NGOs, local governments, and development agencies
may need to establish these conditions before attempting to introduce
participatory budgeting.
Several lessons can be drawn from the case studies: Better information
produces better results. It is an axiom of participation that citizens need access

146 Alta F�lscher

to information to participate. The case studies provide concrete examples of
the fact that good information not only precedes participation but enhances
its effectiveness. In the Bulgarian case, good information on future resource
flows enhanced the realism and therefore the effectiveness of participatory
planning. In Ternopil and Ivano-Frankivsk, Ukraine, the generation of good
information on citizens' attitudes to local government and specific services
added weight to participatory practices in decision-making forums.
Single participation mechanisms are less effective than combinations of
mechanisms.Combining budget hearings with information-generation activi-
ties,for example,makes it more difficult for municipal governments to ignore
citizen inputs, which in turn gives citizens reasons to participate. Similarly,
setting up citizen advisory groups as an extension of budget hearings may
create minimum accountability of advisory group members. Consultation
is also likely to be more meaningful when combined with some measure of
joint decision making.
Awareness raising and education of stakeholders are necessary. Almost all
the case studies cite the need to raise awareness of citizens and local govern-
ment officials, to increase their capacity as part of a participatory budgeting
initiative, or both. Some note that such activities enhanced the quality of
decision making.
Incentive structures count. Citizens participate in budgeting only if they
expect some results to flow from their efforts. Clear resource ceilings must
be set, so that real choices have to be made and wish-list planning does not
lead to disillusionment down the line.A medium-term budgeting framework
is needed, so that multiyear capital projects can be included and tradeoffs
made among projects over time. Real participation and results were evident
in Svishtov, Bulgaria, where some of these rules were put in place.
Clear rules for participation and decision making are required. The more
successful case studies all include references to the clear articulation of the
rules of engagement at the outset. (In Zwolen, Poland, for example, the
municipal council agreed to the rules and made them public before com-
mencing the consultation process.) These rules must cover who may initiate
participatory events and how, what the roles and responsibilities of different
actors are, how the government needs to respond to the results of decision
making, and what the criteria are for choosing among priorities following
consultation. The time frame of participatory processes also needs to be
determined and publicized up front.
Partnerships contribute to more effective arrangements. Partnerships
between local governments and key CSOs help make participation work. In
many cases, particularly where budget hearings and public meetings are
used as key mechanisms, the institutional arrangements themselves call for

Participatory Budgeting in Central and Eastern Europe 147

partnerships. In other cases, such as the participatory assessment in Armenia,
where local government involvement was low, mistrust by local government
officials limited the effectiveness of the initiative.
Localities learn by doing. Learning by doing can occur only where real
benefits flow from participation, so that the initiative is continued. The sus-
tainability of participatory activities, which depend on funding from CSOs,
is still in question. Only when citizens demand participatory mechanisms as
a right and local governments have less discretion over their continuation
will participatory mechanisms be institutionalized. Participation, even in the
form of information generation by CSOs, can catalyze further participatory
practices, such as consultation or some form of joint decisions.
Ownership by local leadership is critical. Success requires strong local
leadership by the government (many initiatives were initiated by progres-
sive mayors) and civil society organizers (whose organizational capacities
are required).
Leading CSOs and local government officials need specific skills. They need
to be adept at facilitation, conflict resolution, and technical budgeting.
Public relations campaigns and media involvement are vital. In all of the
case studies, either the local government or CSOs identified the need for
informing citizens about the initiative and used the media to elicit participation
and publish the results of the process.Independent,robust media institutions
are needed to fulfill this function and build trust in the initiatives.
Coalition building by local NGOs strengthens initiatives. In the Strategiya
initiative, the People's Voice Project, and the other Ukraine initiatives, par-
ticipatory initiatives depended on building coalitions with local NGOs.
Working together increased their influence with local authorities and
brought together various types of expertise. In Ivano-Frankivsk, Ukraine,
for example, the local academic community conducted surveys of citizens'
priorities, providing credible and legitimate information that was much
harder for local governments to ignore.
External catalysts play a key role in initiating and developing participatory
practices. All but two of the initiatives studied were initiated by external
development agencies or CSOs.
Participatory budgeting initiatives offer the potential not only to change
citizen attitudes about their rights and responsibilities and their views of
local government but also to improve the effectiveness of local government.
Ideally, over time such developments contribute to more robust governance
practices, as citizens' understanding of their voice and how to make it heard
grows. The initiatives studied are still fragile, however, and they are limited
to locations where strong CSOs were able to take the lead or progressive local
governments were already in place.

148
Annex: Achievements, Challenges, and Lessons from Participatory Budgeting Processes in
Case Study Countries

T A B L E 4 A . 1 Achievements of and Lessons from Citizen Participation in Central and Eastern Europe

Case study Achievements and challenges Lessons

Albania Achievements
Local governments' understanding of citizens increased. Citizens need good information.
Citizens' understanding of tradeoffs increased. Participative budgeting needs to be aligned to
Citizens' interest in results of spending rose, and accountability local fiscal realities.
improved. A conflict resolution process must be in place,
and rules must be clear from the outset.
Public understanding needs to be built.
Participation of women and residents of remote
areas is difficult to achieve.
Challenges
Local governments have little financial autonomy. All local Generation of sustainable results takes time.
government budgets are approved by the Ministry of Finanace,
and local officers of the ministry exercise significant control.
Development of organized civil society is relatively new, and
capacity remains low.
Information at the local level is not easily obtainable.

Armenia Achievements
Ten thousand citizens got involved in identifying priorities. A high level of technical input is required.
Building capacity of local governments, CSOs, and
communities to make the initiative sustainable is
critical.

Challenges
City officials resisted participation.
Sustainability is difficult to achieve.

Svishtov, Achievements
Bulgaria Learning through doing took place. Planning should focus only on what is possible.
Citizen awareness of government duties grew. Incentives are needed to induce citizen interest.
Participation improved. Local leaders and interest groups must advocate,
Co-financing emerged. initiate actions, organize funding, and manage
Sustainability of capital projects increased. the process.
Education of citizens on rights and responsibilities
and the workings of the intergovernmental
system is critical.
Participation develops as capacity builds.
Participation attracts co-financing and increases
sustainability.
Challenges
Risk remains that elites may capture process.

Zwolen, Poland Achievements
Participation increased local government's sense of citizen priorities. Media campaigns to inform citizens about initiative
A transparent process with transparent rules was adopted to are very important.
allocate capital resources to priorities.
Challenges
Involvement of local communities and private sector in local
development is low. Citizens do not see getting involved as
their responsibility.
149
(continued)

150

T A B L E 4 A . 1 (continued)

Case study Achievements and challenges Lessons

Brazov, Romania Achievements
Budget hearing process resulted in the formation of smaller, Sustaining efforts over the first few years is critical,
more effective and more involved committees. as the participation process takes a long time to
Neighborhood committees were active in monitoring neighborhood institutionalize.
needs and implementing small infrastructure projects.
Challenges
Building citizen trust in the meaningfulness of the mechanisms
of engagement was difficult.

Russian Federation
Zaozerie, Achievements
Mezen Rayon, Social services in village improved. Local leadership by the teacher can be important.
Archangelsk More resources were available. Building the capacity of villagers to understand their
Oblast Capacity of villagers to plan, raise funds, and implement solutions rights to seek their own solutions is important.
to their own problems increased.
Mindset regarding where solutions should originate changed.
Challenges
Rural local authorities have insufficient resources to undertake
local development.
Local citizens are not informed about changes in local government
structures and opportunities for participation.
Local citizens are initially distrustful about collective efforts.

Nine villages Achievements
in Maikop Villages planned, financed, and developed their own infrastructure, Empowered participation processes facilitate
Rayon, in line with their own priorities. Seven villages now have gas the generation of additional revenue
Krasnodar Kray pipes, trade has been organized, phone communication to use at the local level.
has been installed in some villages, and transport Legal framework that allows for public meetings to
infrastructure has improved. make binding legal decisions of self-government
in small villages facilitates innovative solutions.
Challenges
Building trust between local government and citizens is difficult.

Gatchina Achievements
Rayon, Leningrad Expenditures are controlled closer to beneficiaries. Capacity building in local administrations is vital.
Oblast Local administrators are more involved in budgeting and revenue
calculation.
Challenges
Local administrators initially saw their role as mainly controlling
expenditures and not managing local development.

St. Petersburg Achievements
Capacity and confidence of local NGOs were built. Involvement by academics resulted in strong
Participation increased modestly over time. conceptualization and ability to communicate
Interactive mechanisms were established among NGOs, the expert at a sophisticated level.
community, and local authorities that may yield fruit in the future. Independent budget analysis contributed to the
Joint programs were developed; joint budgeting mechanisms are success of hearings.
being institutionalized in some cities. Hearings and other transparency institutions
Joint reviews of policies were conducted in some cities. evolved as mutually reinforcing mechanisms.
Civil society capacity supplemented the low capacity of local Murky roles and responsibilities in
151 authorities. intergovernmental relations negatively affected
Participation increased. participation.
(continued)

152

T A B L E 4 A . 1 (continued)

Case study Achievements and challenges Lessons

Low level of capacity in local NGOs, lack of NGO
coalitions, and low level of consolidation
hindered local organization and effective
participation.
Other mechanisms of influence and interaction
that exist between local elites and authorities
resisted the introduction of transparent public
hearings.
Illiteracy and a low level of awareness among the
public, NGOs, and elected council members
hindered participation.
Low level of transparency and weak media limited
impact.
Challenges
Access to information remains deficient; demand for information Analysis by NGOs was more useful than analysis by
remains low. academics.
The regulatory basis for public involvement in decision making Poor communication about hearings limited
is not clear. impact.
The divide between NGOs funded from the budget and others was History affects how citizens respond to participatory
difficult to bridge. initiatives.
Local government perceived participation as consisting only of The quality of moderation is important.
information sharing and consultation.
Mutual distrust detracted from hearings.

Low level of capacity in local NGOs, lack of NGO coalitions, and
low level of consolidation hindered local organization and
effective participation.
Actors who benefited from existing nontransparent mechanisms of
influence and access resisted open public hearings.
Low level of expertise or apprehension of local experts created
a high level of mutual distrust.

Ukraine Achievements
Kemyanets- Participation in hearings to set local budget priorities grew to 600 Participatory processes developed with experience.
Podilski, people, with many representing entire communities. Technical capacity in town (local university)
Khmelnitsk Hearings offered an avenue for groups working with vulnerable facilitated the use of more sophisticated
Oblast, and groups to bring their concerns into budget deliberations. instruments, such as opinion surveys.
31 other cities Trust between citizens and government increased. Leadership by the local mayor and the dynamism
Citizens' priorities and opinions were integrated into the budget of town leadership with values of pluralism
process. and political activism were important.
Local government was able to draw on citizens' support to advocate More transparency on budget issues preceded
at higher levels of government. participation practices.
An initiative was launched to approach oblast and national Better background information (budget and
governments to secure local budget revenue from income taxes. budget execution information on the Web site,
As a result of introducing public hearings, municipal spending for example) enabled participation.
patterns changed. Surveys and opinion polls supporting budget
Projects' experience has been disseminated to other cities through hearings made it more difficult for council
the Internet. to ignore citizens' priorities.
Public hearings need to be backed with other
mechanisms of engagement, such as public
planning committees.
153
(continued)

154

T A B L E 4 A . 1 (continued)

Case study Achievements and challenges Lessons

The switch to program budgeting was effective,
changing the nature of questions asked in the
budget process.
Significant capacity building support is needed
before successful mechanisms can be replicated
elsewhere.
Challenges
Quality of participation was not ideal, with women underrepresented.
Mechanisms were captured by elites.
Although the legal framework makes hearings obligatory,
not all cities have statutes in place.
Capacity remains low in both local governments and civil society
in some cities.

Participatory Budgeting in Central and Eastern Europe 155

Note

1. The legal framework includes provisions under which citizens can organize them-
selves into units of local self-government.

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Participatory Budgeting
in Asia
a l t a f � l s c h e r

he chapter examines the use of participatory budgeting by
T
subnational governments in Bangladesh, India, Indonesia, the
Philippines,and Thailand.1 In some of these countries,participatory
budgeting was initiated by the government. In others, local
nongovernmental organizations (NGOs) or third parties initiated
the process. Some of the efforts described aim to improve trans-
parency and accountability, others seek to provide citizens with
direct participation in public decision making. Some operate in the
formulation phase of the budget cycle, others engage in participative
monitoring and even auditing.
Do the case studies provide evidence of benefits from partici-
pation? If so, can useful conclusions be drawn about necessary and
supporting factors for replicating such initiatives elsewhere?
To answer these questions, the chapter begins by showing how
participatory budgeting can enhance development. It then reviews
the Asian context, examining how broad trends of democratization,
decentralization, and participatory practices have played out in the
five case study countries. The third section describes the types of
participatory budgeting initiatives and examines how well they
performed in each of the five countries. The fourth section draws
lessons from the Asian experience. The last section draws conclu-
sions about participatory budgeting based on the case studies.

157

158 Alta F�lscher

How Can Citizen Participation Enhance Development?

Citizen participation in the allocation and use of local public funds can
enhance development outcomes, for several reasons. First, citizens have the
best knowledge of their needs, their preferences, and local conditions. Their
participation in decision making makes it more likely that available funds
will be used to deliver the goods and services most needed,thereby improving
government effectiveness. Participation contributes to better public policy
and better policy implementation.2
Second, citizen participation improves vertical, or social, accountability.
When citizens are engaged in planning, funding, delivering, and monitoring
public goods and services, the incentives and pressures on public officials and
officeholders change. Officials become more accountable for the choices
they make on behalf of citizens; as a result corruption is less likely and effec-
tiveness and efficiency increase. Citizens' perceptions change as they learn to
see themselves as the clients of government.Development partners emphasize
these changes as objectives of participatory programs,particularly in countries
with poor governance environments, such as Bangladesh and Indonesia.
As Edstrom (2002,p.2) notes,the aim is to"institute transparency and democ-
racy from the bottom up in a country [Indonesia] where serious abuse of
office and top-down planning have been endemic.[Participatory governance]
calls on villagers to demand accountability from both the government and
their neighbors, and to take responsibility for the investments they deem
important." Participatory governance systems "embody the aspiration of
making government at local levels more responsive to citizens and more
effective in service delivery through building in participation and account-
ability" (McGee 2003, p. 6).3
Third, participatory budgeting has the potential to improve the quality
of democracy. Participation in public decision making is a form of direct
democracy that allows for a more meaningful democratic relationship
between citizens and government than that provided by representative
democracy (McGee 2003). Participation can also provide marginalized
groups with access to policy makers. In any political system, already power-
ful and economically advantaged groups have easier access to the state than
marginalized groups. Purely representative democracies are unlikely
to address this imbalance, particularly if they are already highly unequal.
When participatory elements are introduced into governance systems,
the opportunities for redress increase, as institutionalized participatory
mechanisms lower the entry barriers for engagement with the state and

Participatory Budgeting in Asia 159

allow disadvantaged groups a voice in policy making. This is in contrast to
purely representative democracy, which presupposes absolute bureaucratic
efficiency. A combination of direct and representative democratic gover-
nance institutions is likely to be the most functional. As Edwards notes,
"Without sustained public pressure (as in participatory democracy),
governments rarely fulfill the promises they make on election day. But
without elections, it is difficult to reconcile the different interests and agendas
that exist in civil society" (2002, cited in McGee 2003, p. 9).
Effective participatory democracy depends on the quality of deliberation
in the process. Deliberation emphasizes"eliciting broad public participation
in a process which provides citizens an opportunity to consider the issues,
weigh alternatives, and express a judgment about which policy or candidate
is preferred . . . . It is distinguished from ordinary, thin modes of public
involvement by the breadth and quality of participation"(Weeks 2000, cited
in McGee 2003, p. 10).
Participatory democracy is not tokenistic.It presupposes decision-making
processes that are not dictated primarily by interest group politics but
by rationality. If participative practices are to deliver on the promise of
improving the quality of democratic governance, enabling conditions for
good-quality deliberative processes should be in place. These include
the incentives citizens face, their skill levels, and the quality of information
available in the process.
Meaningful and effective citizen participation in public choices also
improves trust in government and commitment to the tradeoffs made.
Together with improved budget transparency, participation can build social
cohesion,which can lead to the very tangible benefit of increased tax collection.

The Asian Context

Russell-Einhorn (forthcoming) distinguishes between background factors
affecting the effectiveness of citizen voice initiatives and factors that have to
do with institutional design, resource availability, and capacity. The first set
of constraints is usually embedded in the social and political environment
and includes sociocultural, political, and administrative traditions, legacies,
and reforms. In this regard, the Asian context is marked by supportive legal
frameworks, active civil societies, and a relatively recent history of citizen-led
constitutional change,often set against a longer history of political patrimony
and elitism.

160 Alta F�lscher

Political, Constitutional, and Legislative Contexts for Participation

All the countries in the sample are democracies. Two (Bangladesh and India)
were founded as a result of secession and independence movements; three
(Indonesia, the Philippines, and Thailand) recently underwent constitu-
tional change after civil society uprisings against authoritarian rule.All have
legal provisions for direct democracy, although they are not always embod-
ied in governance practice (table 5.1). In all five countries, traditional social
structures coexist with liberal democracy and provisions for participation

T A B L E 5 . 1 Constitutional and Legal Provisions for Decentralization
and Participation in Bangladesh, India, Indonesia, the Philippines,
and Thailand

Political and constitutional Constitutional and legal provisions
Country context for decentralization and participation

Bangladesh Democracy since 1971, A recent government review
following secession of East recommended a four-tier system of
Pakistan from West Pakistan. local government, including
The constitution includes a village-level councils, but the
bill of rights and "pledges recommendation has not been
ownership of the republic implemented. The legal framework
to the people." for assigning roles and
responsibilities across levels of
government is weak, as is the fiscal
capacity of local governments.
India Federal democratic republic The constitution assigns clear roles
since 1947, born out of the and responsibilities to local
Gandhian independence government. Local governments are
movement. The constitution has largely dependent on transfers from
a strong focus on fundamental national government: their own
rights. The 73rd and 74th revenue sources are limited to
amendments introduced property and professional taxes and
village-level autonomy to a limited set of license fees. Transfer
promote democracy at the criteria for recurrent spending are
grassroots level. determined by the Finance
Commission; the national
Planning Commission allocates
funds to major capital investment
projects. The financial autonomy
of local governments to initiate
new programs and projects
remains limited.

(continued)

Participatory Budgeting in Asia 161

T A B L E 5 . 1 (continued)

Political and constitutional Constitutional and legal provisions
Country context for decentralization and participation

Indonesia Demonstrations and riots in Indonesia has passed two
1998 led to the resignation of decentralization laws since 1999. In
Suharto after 32 years of 2001 it passed implementation
dictatorship. The constitution legislation. Bureaucratic opposition
was enacted in 1945. Since has succeeded in rolling back many
then piecemeal change has of the gains made in the legislation.
been made toward making it
more progressive.
Philippines The Marcos regime fell in 1987, The Local Government Code of
following mass demonstrations. 1991 embodies a comprehensive
The constitution is progressive, decentralization program.
containing a strong bill of rights In accordance with the
and recognition of civil society. constitutional provisions, the
code institutionalizes the
participation of civil society at
the local level, envisaging a
partnership between NGOs and
local administrations, in terms
of both joint planning and part-
nering in service provision. The
code creates local development
councils, with guaranteed
seats for NGOs.
Thailand Demonstrations in 1992 ended The constitution provides for
60 years of military rule. The decentralization. The Local
constitution is progressive, Government Code places strong
containing a strong bill of rights, emphasis on participation.
enacted with support from a
broad civil society coalition.

Sources: Brillantes 2005; McGee 2003; Paul 2005b; Rahman, Kabir, and Razzaque 2004; Suwanmala 2004.

and accountability to the larger population. In practice this means that
meaningful participation is not the norm; access to political power and the
organs of state is still largely elitist.
Experience around the world suggests that legal provisions for
decentralization and participation are necessary to create an enabling
environment for these institutions. Legal frameworks regulate the terms of
actors' engagement and their scope for influencing behavior in the arenas of
other actors (McGee 2003).This holds both for how subnational governments
influence national governments and how civil society influences government.
Experience also suggests that legal frameworks are not sufficient to ensure

162 Alta F�lscher

that effective decentralization and participation mechanisms develop.
Despite numerous constitutional and legal provisions for direct democracy
and accountability, restrictions to democracy are in place in the case
study countries, where undemocratic traditional social norms underpin the
political systems (McGee 2003). Decentralization will be effective only if it
is supported by a clear assignment of roles and responsibilities in a legal
framework, but such a framework alone is not enough.
This mismatch between the legal framework and practice plays out in
various ways in the case study countries.In Bangladesh local government elec-
tions are hotly contested and draw high voter turnout, but the roles and
responsibilities of local governments are not well defined and implementation
capacity is very weak. Fiscal capacity is also limited, with local governments
largely dependent on transfers from the center. A weak framework for local
government, coupled with a strong national nexus between politicians,
bureaucrats, and business, results in a government that remains highly
centralized (Rahman, Kabir, and Razzaque 2004). As a result, local govern-
ment institutions are ill equipped to provide basic services. At the national
level, vulnerable groups are largely excluded from access to budget decision
makers. The state is not entirely closed to participation, however. Organized
and well-resourced interest groups have direct access to political power and
bureaucracy, and they lobby for their interests. In contrast, the poor have vir-
tually no control over policy changes, with profound implications for their
livelihoods (Rahman, Kabir, and Razzaque 2004). The Bangladesh case study
describes an instance in which development partners are joining forces with
other stakeholders to create demand from citizens for better local government.
In India the assignment of roles and responsibilities to local government
is clear, but local governments have only limited financial autonomy to
initiate new programs and projects. The financial (and therefore policy)
autonomy of local governments is nominal rather than real (Paul 2005b). In
addition,traditional social norms hinder effective broad-based participation.
It is therefore interesting that in the case studies from India, all initiatives
except one were initiated by civil society, with at least two cases involving
groups representing the lowest tiers of society.
In Indonesia implementation of the decentralization legislation is slow
and has met with bureaucratic resistance,rolling back many of the gains made
in the legislation (McGee 2003). In the Indonesian case study of participatory
decision making at the local level, government is a key partner. According to
Edstrom (2002),choosing to work with local rather than national government
reflects the recognition that radical interventions are needed to improve state
effectiveness in an environment of severe corruption.

Participatory Budgeting in Asia 163

In the Philippines implementation of the local government framework
is uneven: the case of Naga City suggests that national legal provisions for
participation may need to be supplemented with more-detailed legal instru-
ments to regulate the direct participation interface between citizens and the
state. Politics has not favored strong accountability or local constraints on
central power (Azfar, K�hk�nen, and Meagher 2001). The traditional
system has been described as neopatrimonial, combining the decentralized
power of families and clans with a centralized bureaucracy that coordinates
the implementation of policy. These dynamics put civic participation in
local government at risk. Still, several social changes have facilitated
effective democratization and decentralization, including civic participation
in local government.
In Thailand the implementation of the Local Government Code, with
its provisions for participation, has been uneven (Suwanmala 2004). The
Thai case nevertheless illustrates how enactment of a national framework
can stimulate change at the local level.

State of Civil Society

Civil society has been successful in bringing about large-scale political
change in some Asian countries by deploying conflict-driven mechanisms
of protest and mass action. The region is also characterized by large national
NGOs that deliver services parallel to those provided by the state. This phe-
nomenon developed in reaction to the state's failure to deliver basic services
on the ground. In Bangladesh, for example, the strength of civil society deliv-
ery organizations is a feature of national life.
Citizen participation in a cooperative relationship with government in
local-level public decision making is relatively new. However, there is some
evidence in the case studies that a history of exercising public voice may have
left citizens with some capacity to take up a meaningful role.
This is perhaps best illustrated if the case studies in this chapter are con-
trasted with those from Central and Eastern Europe (see chapter 4). The first
striking difference is that the Asian case studies illustrate activities that are
almost exclusively initiated and carried out by domestic actors (the local
government or local civil society). International actors play a much smaller
role as initiators and managers of initiatives than they do in Eastern Europe,
where almost all initiatives have been sponsored by development partners or
international NGOs. This difference may relate to Asia's longer traditions of
accountable governance and civic engagement,which have given citizens and
(local) governments a different view of the relationship between citizens

164 Alta F�lscher

and the state. Civic engagement in local decision making occurs in a context
in which citizens already have an understanding of their roles in local
governance. In contrast, years of centrist communist rule in Central and
Eastern Europe disempowered civil societies. An important contribution of
participatory budgeting in that region may be building citizens' awareness
of their rights and obligations. In Asia this "platform" of awareness was
already in place.
The Philippines offers a good example of a country in which civil society's
role has developed along two mutually reinforcing paths. Before 1986
increasing centralization, graft, and lack of resources 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 of governance. The
constitution tasks the state to encourage NGOs that promote the welfare of
the nation. It guarantees the right of people's organizations to effective
participation at all levels of social, political, and economic decision making.
The Local Government Code provision translates this provision into explicit
mechanisms for participation.NGOs are allocated a minimum of one-quarter
of the 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 of Participatory Budgeting Initiatives

Very different types and levels of citizen engagement with public resource
decisions and service delivery are referred to as "participatory budgeting."
Two broad types of citizen engagement can be distinguished based on the
degree to which citizens enter the action space of the state in planning,
allocating, and monitoring the use of public resources.
In the first set of participatory budgeting initiatives, citizens do not
attempt to take over or partner with the state in these phases of the budget
process. They undertake activities in the broader public domain that are

Participatory Budgeting in Asia 165

aimed primarily at improving the transparency of governments' actions
and the accountability of state actors. This type of participation occurs
within the boundaries of representative democracy: making public decisions
is still the purview of government agencies and elected office holders.However,
citizens do not take the bureaucratic effectiveness of these institutions for
granted but undertake activities to bolster transparency and accountability.
Put differently, these activities typically generate information on public
policy and services outside of the state in order to influence what happens
in the state. Activities in this broad category are usually initiated by NGOs.
In the second set of initiatives, citizens engage in the decision-making
processes of public agencies. Examples of this type, which could be seen as
a form of direct 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 of access
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 consulta-
tion and information sharing.

Initiatives that Improve Transparency and Accountability

Civil society achieves the first level of engagement with the budget when it
attempts to bring information on citizens' opinions and preferences to the
attention of subnational governments or to initiate dialogue and influence
public decision making through budget analysis. This level of participation
relies on the quality of the 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 of different types
of NGOs, including organizations that have broad-based membership.
Getting ordinary citizens involved requires that the analysis be easy to
understand and relevant to the concerns of average citizens. Participation
can occur in a variety of ways, 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 of ordinary citizens

166 Alta F�lscher

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 of NGOs. To do so, they make effective use of the media to
reach citizens, legislators, and officials. They know how to capitalize on the
aversion of public 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 of those in authority, have relatively free media, and have inde-
pendent NGOs in place. One could take this argument further to add that the
quality of democratic governance counts. Goetz and Gaventa (2001) empha-
size the importance of the nature and organization of the political system in
determining the level and quality of participation.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, if the poli- tical system is
rooted in the politics of identity, 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 of services),
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
of the budget process will find it much harder to deliver results in environ-
ments 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 of impact. 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 of delivering effective services efficiently.

Participatory Budgeting in Asia 167

Of the four cases presented below, the participative auditing and score
card methodologies deliver the most tangible results: redress and improved
implementation of services and projects. Tangible impact is much harder to
achieve in initiatives that focus on influencing the allocation of funds against
priorities. Of course, the voices of citizens and citizen groups compete with
many others in policy and resource allocation processes. Even if citizens'
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 intergovern-
mental 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 of the
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 of Pathey'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 of special relevance to poor
tribal people. Comprehensive analysis is kept to a minimum and used to
frame specific analyses, including analysis of budget allocations to the most
relevant sectors (health, education) and the tracking of specific schemes that
affect local people. Pathey also tracks expenditures on programs of high
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 F�lscher

built a network of nongovernmental 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 find-
ings. 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 of the people who
receive material about the budget undertake follow-up action.Many of Pathey's
nongovernmental partners use the analysis to draw the government's attention
to specific issues.They see long-term value in the information.Members of the
state legislature, political parties, and senior public servants make significant
use of Pathey'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 of peasants and workers
in the Indian state of Rajasthan, uses another approach to stimulate citizen
participation in budget processes. MKSS holds public hearings--or "social
audits"--at which citizens discuss government expenditures on develop-
ment 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 of these
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 of camel or bullock cartloads
rather than tons.)
In the third stage, project staff members 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 of fictitious or deceased people. This process can take as little as
one week or as long as a few months.
The fourth stage of the process is the public hearing itself. Anticipa-
tion 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 of respected 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 govern-
ment now requires that a social audit be held in every village every year.As part
of the audit,all village residents must be given an opportunity to vote on a res-
olution verifying that the projects in their village were successfully completed.
The state has passed a law on access to information.While this process has lim-
itations, it represents a radical change in the institutional space provided to
citizens to audit public funds (Ramkumar and Krafchik 2005).

Public Record of Operations and Finance (PROOF) in Bangalore, India

Public Record of Operations 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 of 6 million people and a hub of India's high-tech
industries. PROOF aims to demystify the budget process and make budgets
more accessible to citizens. It conducts periodic dialogues between the gov-
ernment and citizens on budget allocations, priorities, and performance.
The PROOF initiative occurred against the background of the modern-
ization of Bangalore's municipal financial management system, which
resulted in reformed budget formats and timely reports on revenues and
expenditures. The availability of timely budget information was a major
factor that stimulated the promoters of PROOF 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 of the 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.

170 Alta F�lscher

The initial focus of PROOF's interventions was on the budget as a
whole; this focus later narrowed to specific expenditure or revenue issues. It
also moved from an analysis of input and expenditure trends to looking
at what is achieved with funds. PROOF is now in the process of developing
performance indicators.
In addition, it uses the citizen report card surveys conducted by the
Public Affairs Centre, a founding member, to inform its dialogue. These
report cards use public opinion surveying techniques to generate robust
information about citizens'satisfaction with core government services, such
as provision of electricity. The cards thus represent an assessment of the
city's public services from the perspective of its citizens. They provide use-
ful feedback on the quality, efficiency, and adequacy of the services and
problems citizens face in their interactions with service providers. Where
multiple service providers exist, it is possible to compare their ratings across
services. The cards also collect information about private expenses incurred
as a result of poor services and analyze the economic costs to households and
the city of inefficient public services. The report cards have had a real impact
on the level, quality, and efficiency of public services.
With this analytical background, attendance at the quarterly PROOF
meetings has grown over the three years since the initiative began, and
citizens' awareness and understanding of local budgetary issues have
increased. The city is more open to sharing budgetary information, and
initial tensions between the city and civil society groups have eased, allow-
ing a sense of partnership to develop. The mayor, the municipal commis-
sioner, and senior officials participate in the meetings and respond to the
PROOF analysis and citizens' questions.
Despite attempts to make participation more broad based, PROOF has
been criticized as being dominated by professionals. Critics charge that the
concerns raised in the public forum are elitist and that meetings have failed to
address certain key issues, such as corruption. Another frequent criticism is
that the budget discussions are so technical that ordinary citizens can follow
only up to a point.Some critics believe the process would be more worthwhile
if ward-level budgets were examined (Paul 2005b; Vijayalakshmi 2004).

Concerned Citizens of Abra for Good Governance (CCAGG) in
the Philippines

The Concerned Citizens of Abra for Good Governance (CCAGG) was founded
in 1986, when new opportunities were created for NGOs to participate in
development programs in the Philippines. CCAGG members signed a

Participatory Budgeting in Asia 171

memorandum of understanding with the National Economic Development
Authority and received training from the agency in project monitoring.
When the Ministry of Public Works and Highways falsely declared in a
public advertisement that it had successfully completed 27 projects in Abra
province, CCAGG members decided to take action. CCAGG gathered
evidence of the actual state of the projects, including photographs and state-
ments by residents in the project areas, which it submitted to the national
government. An official audit followed, and several officials were charged
with corruption.When there was danger that punishment would be minimal,
with officials receiving mere reprimands, CCAGG mobilized public opinion.
As a result, the officials were suspended.
Since then CCAGG members have developed a unique technique for
monitoring road construction projects. Investigations look for a variety of
types of corruption. The method is straightforward. Volunteers--primarily
housewives, students, and other young people--observe work sites and
report findings to specialist colleagues, such as engineers and accountants,
who conduct detailed investigations on the project sites.
Common malfeasance includes the use of substandard materials
(cement mixtures), substandard construction techniques, and fraudulent
contracting procedures (rigged contracts). In one project CCAGG members
found that contractors had embezzled project funds.In response to CCAGG's
findings, the government forced the contractor to pay for a road expansion.
A sign of the group's effectiveness is that the supreme audit institution of the
Philippines has entered into a partnership with CCAGG to provide audit
information on projects in the Abra region (Ramkumar and Krafchik 2005).

Initiatives that Involve Citizens in Consultation and Joint
Decision Making

Paul (2005a) argues that programmatic shifts in budget allocations are far
less likely to result from arm's length participation than they are from direct
citizen involvement in funding decisions. The next set of case studies inves-
tigates what happens when civil society--both organized civil society and
citizens at large--steps into what was traditionally the state's action space to
join hands with government in making public resource decisions.

Indirect participation in the budgeting process

Citizens are indirectly involved in the budgeting processes in three cases,
where participation is limited to consultation. The local government decides

172 Alta F�lscher

if and when consultation will take place, sets the agenda for consultation,
and, to a degree, determines who will be consulted. It is unclear from these
case studies that any of the benefits expected from participation--improved
policy decisiveness and public accountability, better quality democracy,
social consensus and trust in government��are better served through pub-
lic consultation than through civil society�led activities aimed at improving
transparency and accountability. In fact, several risks attach to consultation
of this nature, particularly if initiated and controlled by the state. In partic-
ular, citizens may be consulted only on"safe"public policy issues that are not
sensitive or resource consuming.
The demarcation of the public policy participatory space in the three
case studies is simultaneously too vague and too precise to be meaningful.
Consultation may actually be divisive: governments may use it as a way to
manage the government�civil society interface. Reuben (2003) describes
such strategies as developing harmonious relationships with some civil
society groups and organizations while confronting others, thereby creating
factions in civil society. Participation may also be elitist: citizens selected to
participate may be people who are already influential and well resourced.
Participation may be meaningless and therefore shunned by citizens, as it
was in Rayong City, Thailand, where the participatory commissions oper-
ated outside of policy and budget processes and soon were dormant. Over-
all, consultation may detract from civil society's ability to be critical of the
state and hold it to account, without much benefit in terms of policy
appropriateness or increased trust in government.
This is not to say that consultation is always an ineffective participatory
mechanism. Whether it is effective depends largely on the intention of the
local government and the institutional arrangements--the rules, structures,
processes, and information management--of the consultative process. Local
governments that are sincere about soliciting citizens' views can form focus
groups and pay attention to the views that participants express. This type of
consultation can enhance the quality of democracy, improve policy
decisiveness, and build trust in government.
Allowing citizens the right to initiate consultation--as they can in
some Eastern European countries, where citizens can call meetings or ini-
tiate referendums on public policy issues of their choice--would mitigate
the risk of empty processes. The provision by the local government of
good, accessible information in a timely manner also enhances citizen
participation. Transparent and impartial selection of participants helps
ensure good representation. If citizens' groups must be accredited by the
government before they can participate, as is the case in Naga City, or the

Participatory Budgeting in Asia 173

government selects participants,the risk of co-option,patronage,and elitism
is high.

l e g a l p r o v i s i o n s f o r p a r t i c i p at i o n i n n a g a
c i t y, t h e p h i l i p p i n e s . Local government officials in Naga
City, the Philippines, complemented national enabling legislation with
specific legal provisions for participation at the local level. Its 1995
Empowerment Ordinance attempts to translate the participatory spirit of
national legislation into a concrete reality. The ordinance states that the
city government of Naga should recognize that"the will of the people shall
always reign supreme" and that the primary duty of the government is to
ensure that this will is carried out. The people should therefore organize
themselves to address common or sectoral concerns. Recognizing that gov-
ernance is best carried out when responsibilities are shared with the peo-
ple, the ordinance proposes a partnership between the local government
and citizens such that sovereignty effectively resides with the people. The
ordinance proposes a partnership with NGOs and people's organizations
for the conception, implementation, and evaluation of all government
activities and functions.
In addition to having local civil society and citizen representation
on several city bodies (as required by national legislation), Naga City
introduced two specific mechanisms to create an enabling environment for
participation of citizens and NGOs in local decision making. First, the city
created the Naga City People's Council, made up of businesspeople, citizens,
and NGOs. Members of the council have to be accredited by the city. The
People's Council has representation on other bodies, such as the local
legislation council and the local decision board. It also has the right to
observe, vote, and participate in local planning; propose legislation; and act
as the people's representative on governance issues, such as access to official
records and documents.
Second, the city conducts multilevel consultations on priorities for
development and holds citywide referendums on local issues. These issues
have included concerns about the development of a golf course, the creation
of a shelter program, the establishment of a bus terminal, and the color coding
of three-wheel vehicles (Brillantes 2005; McGee 2003).

f o c u s g r o u p s a n d t o w n h a l l m e e t i n g s i n k h o n
k a n c i t y, t h a i l a n d . Khon Kan City, with a population of
130,000, is the rapidly growing, dynamic center of northeastern Thailand.
The municipality provides city infrastructure,primary education,community

174 Alta F�lscher

health and sanitation,social welfare,law and order,and disaster management
and prevention services.
Local demand for civic participation grew out of the active partici-
pation of local residents in the constitution-drafting process in the late
1990s. The city first contracted the local university to conduct a series of
focus groups at the community level; the sessions provided valuable
information concerning problems, needs, and priorities. The activity also
generated suggestions for policy directions and strategic projects for
development planning. Thirty-eight new development programs were
put into the city development plan as a result of the meetings. The city has
now extended the focus group meeting program to include specific meet-
ings to discuss education, health and sanitation, income promotion,
social welfare, and other important concerns. More than 50 meetings
were held in 2003.
In 1998, a year after the focus group meetings began, the city introduced
town hall meetings, which are held every three months, with additional
special purpose meetings held as necessary. A new practice evolved: town
hall meetings, with full discussion, are now required whenever a policy issue
has potential significance for the general public. Public consent is needed
before any such policy can be implemented. Local experts are invited to
make presentations, after which the mayor, officials, the general public, and
the experts debate the policy. In 2003 more than 140 civic organizations and
as many as 150 public participants were active in these meetings.
Before a meeting is held, the event is widely announced. The city sets the
meeting agenda. Town hall meetings are conducted in the evenings to allow
most citizens to attend. The chair is an experienced person, such as the
governor of the province. The mayor's leadership was a major factor in
making the meetings successful. Surveys show that citizens are satisfied with
the civic participation measures (Suwanmala 2004).

c i v i c c o m m i s s i o n s a n d f o c u s g r o u p s i n r ay o n g
c i t y, t h a i l a n d . Rayong is a metropolitan municipality in Rayong
Province, in eastern Thailand. Its population of more than 60,000 is growing
due to high migration into the area.
The city identified increased tax collection efficiency as a priority. To
counter negative feelings about the tax collection program, it introduced
citizen participation in budgetary processes. In initial efforts Rayong City
twinned with the city of Portland,Oregon,and used international expertise to
develop a program centered on establishing civic commissions, one for devel-
opment planning and another for fiscal policy. The commissions included

Participatory Budgeting in Asia 175

representatives of civic organizations, business leaders, and trade leaders. The
city also conducted focus groups to monitor project implementation.
Of the two interventions, only the project-level focus groups were
successful, with citizens providing input into the design and feedback on
the implementation of a city park. The civic commissions were never fully
functional: only the fiscal policy commission ever produced policy pro-
posals. Both commissions stopped meeting in 2003. Rayong City then
fine-tuned focus group mechanisms, tested earlier with the construction
of the city park, to develop its local development plan. A local NGO was
contracted to manage the consultation process. At the time of this writing,
the project was under way, and the first round had been completed
(Suwanmala 2004).

Direct participation in the budgeting process

Citizens are directly involved in the budget process in Bangladesh and
Thailand, where initiatives have achieved significant success. Local develop-
ment projects are better aligned with citizen preferences; accountability has
been enhanced through oversight of implementation; infrastructure devel-
opment is more sustainable, with citizens taking an interest in maintaining
village assets; trust in government has been enhanced; revenue collection is
up; and villagers have a direct say in local development expenditure.

c a p a c i t y b u i l d i n g o f u n i o n p a r i s h a d s i n s r a j -
g a n j d i s t r i c t, b a n g l a d e s h . In 2000 the government of
Bangladesh, the United Nations Development Programme (UNDP), and the
United Nations Capital Development Fund (UNCDF) jointly initiated the
Srajganj local government development project, aimed at developing capacity
for participatory processes at the lowest tier of local government, the union
parishads. The project consists of two interventions: provision of annual
block grants of about $6,000 to each union for allocation to projects in wards
and the institutionalization of open budget sessions to establish citizen
engagement with the local budget.
For the block grants, each union forms development committees at the
ward and union levels. Scheme supervision committees oversee the imple-
mentation of projects. The ward development committees conduct partici-
patory planning sessions. One of their critical responsibilities is to ensure
broad participation in the planning sessions. Sessions are chaired by the
ward union parishad member and facilitated by the union facilitation team.
At the outset a tour of the ward is undertaken to identify problems.
The ward-level process that follows can take up to three days and involve

176 Alta F�lscher

up to 500 people. Participants are divided into groups; separate women's
groups prioritize gender-sensitive schemes. After the participatory process,
members of the ward development committee visit proposed schemes to
assess feasibility and make preliminary cost estimates.
Deciding between competing projects ultimately rests with the union
development committee. In the final stages of selection, the committee uses
a screening matrix to assess criteria such as poverty alleviation, environ-
mental impact, and gender impact. The union development committee then
recommends which projects should be implemented. However, the ultimate
decision rests with the union parishad.
The scheme supervision committees monitor the pace and quality of
work during project implementation. They hold the power to stop payments
to contractors. Communities are highly involved in project implementation,
often providing additional resources, such as labor and money.
The second project intervention seeks to establish open budget sessions
aimed at improving budget literacy at the ward level. The union budget
proposal is posted on a notice board before the session. During the session,
participants review the budget against the investment plan that was
produced from the ward-level participatory exercises. Community repre-
sentatives ask for clarification of revenues and expenditure, and they provide
comments for inclusion in the final document. After these discussions,
changes may be made to the budget proposals before the entire budget is
approved by the union parishad. The final budget is made public when it is
posted on the notice board.
According to Rahman, Kabir, and Razzaque (2004), the open sessions
create an opportunity for real needs to be addressed. The sessions also create
scope for the union parishads to raise resources, as citizens are motivated to
pay their local taxes. The sessions tend to encourage more local support for
implementing projects.
The quality of participation remains a challenge. Despite several
design interventions (colored cards to identify women's issues, women-
only groups in planning meetings, and women's representation on
committees), the voices of women are still not being heard, and men
dominate most meetings.
Another weakness is the quality of deliberation in the open budget
sessions, which is determined by the local government leaders' relationships
to the ruling party. If local leaders are in opposition, the meetings tend to be
highly critical of proposals in the budget. If the local leader is from the ruling
party, the session is overly supportive of the budget (Rahman, Kabir, and
Razzaque 2004).

Participatory Budgeting in Asia 177

c i v i c f o r u m s a n d e f f o r t s t o i m p r o v e t a x at i o n
i n h u a i - k a p i t a o , t h a i l a n d . Huai-Kapi is a mixed
urban/rural subdistrict in Chonburee Province, Thailand, with more than
11,000 residents. In 1999 the subdistrict level, called tambon administrative
organization (TAO), initiated an overhaul of its public finance management
systems (including budgeting, taxation, and financial management) with the
introduction of participatory budgeting. The change followed the intro-
duction of legislation supporting participatory budgeting by the Ministry of
the Interior. Huai-Kapi created civic forums at the village level, culminating
in a subdistrict forum.
The civic forum process in Huai-Kapi is supported by annual household
surveys, aimed at improving the quality of information on citizen needs and
preferences. The surveys include general questions about households (size,
age structure, access to services), as well as questions on urgent household
needs and the prioritization of community problems and needs. The survey
results are fed into the civic forums.
Huai-Kapi also adopted three measures to use citizen participation to
improve local tax collection--creating a civic tax committee, providing civic
tax education, and improving the tax collection process. The civic tax
committee includes TAO officials, village heads, and local business repre-
sentatives. It is tasked with conducting a field survey, meeting with taxpayers,
and recommending measures to improve tax collection. Tax committee
members also play a significant role in finding, bargaining with, and bringing
new taxpayers into the tax system.
The Huai-Kapi program improved both expenditure quality and tax
collection. Survey results reveal that citizen satisfaction with the local devel-
opment plan, with the allocation of funds, and with services has grown.
Local tax revenues increased by 48 percent in the three years following the
introduction of the tax committee (Suwanmala 2004).

c i v i c f o r u m s i n s u a n m o n t a o , t h a i l a n d . Suan
Mon TAO, Thailand, comprises 14 villages, with a total population of 7,881
citizens. The majority of taxpayers are poor farmers, which means that the
TAO depends on transfers from the central government.
The TAO has a long history of civic activism. Inability under the old
system to resolve conflicts between interest groups and between villages led
to a budget that was "pork-barreled": more and more projects were loaded
onto the budget, and prioritization was weak. In 1998 the Ministry of the
Interior's regulation on participation at local levels created the opportunity
for the TAO to establish civic forums (made up of local leaders, interest

178 Alta F�lscher

groups,and government officials) in all villages.Their purpose was to identify
local problems, suggest remedies, and provide a prioritized list of projects to
the subdistrict or TAO civic forum committee.
The TAO-level civic forum committee includes 100 members, including
representatives of the village forums. Its task is to make tradeoffs between
the projects that villages propose and submit its recommendations to the
chair of the Suan Mon TAO. The TAO provides a standardized planning
framework and formats to all village civic forum committees. Meetings are
held in the evening, so that most villagers can attend. The villages' civic cul-
ture facilitates the quality of deliberation (Suwanmala 2004).
The regular budget preparation process starts after the civic forum
processes: the civic forum's proposals are included in the local annual budget
plan and adopted unchanged by the TAO council. The final budget and
development plan is then sent back to the village civic forum committees so
that they can monitor project implementation.
In the first years, the TAO undertook capacity-building programs in the
14 villages. It took some time for villages to learn to trust one another and
allow tradeoffs to be made between villages. This effort was supported by the
TAO chief officer, who played a key mediating role and kept promises to roll
over priorities to subsequent years.
In addition to solving the long-term negative impact of pork-barreled
budgeting and increasing participation in a meaningful way, the revised
budget process has had a positive impact on own revenues, as village leaders
now take an active interest in tax collection, finding defaulters and con-
vincing them to pay taxes in order to increase revenue available for projects.
Village leaders and citizens also take an active interest in project imple-
mentation, making the TAO more accountable (Suwanmala 2004).

Initiatives that Give Local Communities Control over Funds

In Indonesia local communities have established village councils and
development forums that exercise full control over the allocation and use of
the block grant to the village. The Kecamatan Development Program (KDP)
targets the poorest kecamatans (subdistricts) in Indonesia. It aims to foster
more democratic and participatory forms of local governance by strength-
ening kecamatan and village capacities and improving community partici-
pation in development projects. The project covers 30 percent of villages at
this level,touching the lives of 10 million people.It is supported by facilitators
and consultants at both the village and national levels who provide technical
support and training.

Participatory Budgeting in Asia 179

In many respects, KDP operates like a social fund. However, rather than
a central fund for which communities compete through project proposals,
the project allocates block grants of about $43,000�$125,000 a year directly
to all participating kecamatans and villages. Through village councils and
development forums, villagers determine how the funds are aligned with
their priorities. The"open menu"approach is a critical part of ensuring that
decisions are truly community driven and that communities have full
ownership over them. Under the project, funds flow directly from a central
project account to a joint village account at a local subdistrict bank.
Although a branch office of the national Treasury processes transfers, at no
stage do funds pass through a government ministry.
An impressive feature of the KDP is its rapid rollout. In the first year of
implementation, the program reached 501 kecamatans; it added 271
kecamatans in the second year and 257 in the third year. Key to success was
a four-to-six-month-long facilitation process in each village leading to project
selection. After this process was completed, funds were transferred to the
village accounts. Edstrom (2002, p. 5) argues that this "ready-aim-fire"
approach of rapid implementation "avoided the pitfalls inherent in `bou-
tique' operations, with their heavy, often expatriate, technical assistance,
their unrealistic cost structure, and their rarefied implementation environ-
ment." Rapid rollout is important to test a project's replicability within a
country, to retain simplicity, and to gain the credibility and enthusiasm
necessary to garner villagers' confidence.
The KDP project cycle has several stages: information dissemination,
planning, proposal preparation and verification, decision making, imple-
mentation, and follow-up. A high degree of community participation and
transparency is sought throughout the process (Edstrom 2002).

Lessons from the Asian Experience

The case studies provide an array of examples of citizen and citizen group
participation in local-level public decision making. Several lessons can be
drawn from these experiences.

Outcomes of Participation Initiatives

At the outset of this chapter, four possible benefits from participation were
identified: improved policy decisiveness, improved accountability, better
quality democracy through direct and broader participation, and improved

180 Alta F�lscher

trust in government. This section evaluates how well participatory initiatives
in Asia succeeded in achieving these objectives.

Improved policy decisiveness

There is some evidence that participation can improve local responsiveness
to citizen preferences. This is the critical assumption behind promoting
participatory exercises and decentralization as a route to improved state
effectiveness. The case study evidence suggests that mechanisms that deliver
on meaningful joint decision making and citizen initiation and control
offer the greatest benefit. In Thailand village residents determine the array
of projects for implementation through the local public budget; citizen
development forums at the district level make the final decisions. In
Bangladesh and Indonesia, citizens have full control over spending a devel-
opment grant provided to each village. Assuming that the deliberation
process is functionally democratic and not dominated by elite interests, these
processes will yield the selection of projects that are aligned with citizen
needs and preferences.
None of the cases shows how such participation could be extended to
cover broader public policies or the delivery of public services. How, for
example, can citizens have an effective say in the type of education their chil-
dren receive, in their public health care modalities and facilities, in measures
for public safety and security? Public consultation exercises and policy advo-
cacy efforts by civil society offer more possibilities in this regard. However, it
is not clear from the case studies that consultation exercises can be as effective
at improving policy responsiveness. Moreover, the risks of ineffective,
meaningless, divisive, and co-opted consultation and continuing systems of
patronage are significant.
Citizen-initiated public advocacy exercises can be effective in bringing
citizens'concerns about spending priorities to the attention of local officials,
office holders, and representatives. The work of DISHA/Pathey in Gujarat
State, India, has"substantially enhanced the quality of debate on the budget,
both inside the (state) assembly and outside, serving as an effective channel
of feedback to the government" (Wagle and Shah 2003, p. 2). However, the
impact of such initiatives depends on the degree to which policies drive local
politics and the CSO can combine "people power" with rigorous analyses
that have immediate validity in public debates.

Increased accountability of public officials and elected representatives

The most powerful examples of how participation can improve vertical
accountability are the citizen report cards in Bangalore, India; the MKSS

Participatory Budgeting in Asia 181

social audits in Rajasthan, India; and the CCAGG initiative in the Abra
region of the Philippines. All these initiatives operate on the execution and
audit side of the budget process. These initiatives yield much more decisive
results than initiatives aimed at improving government accountability for
policies and budget decisions, and they achieve results more quickly. In the
MKSS and CCAGG cases, the support that such improved vertical accounta-
bility provides to the quality of horizontal accountability is clear: in both cases
oversight institutions have forged partnerships with citizen organizations to
improve accountability. Improved accountability of public structures also
results in cases where joint decision making in development planning is
backed by the oversight of citizen committees during implementation.
It is not clear from the case study material that consultation increases
public accountability. In fact, if consultation divides civil society and co-opts
scarce civil society capacity, it may actually reduce citizens' ability to hold
public structures to account.

Better democracy

The demands of democracy are complex. In addition to voting and respect
for election results, democracy also requires the protection of liberties and
freedoms, respect for legal entitlements, and the guarantee of free discussion
and uncensored distribution of new and fair comment. Democracy is "a
demanding system, and not just a mechanical condition (like majority rule)
taken in isolation" (Sen 1999, p. 9).
Insofar as their activities provide increased opportunities for citizens to
engage their representatives directly in the public arena, not only at the bal-
lot box, all of the initiatives described in this chapter can contribute to mak-
ing democracy substantive. However, if McGee's caution that access should
be broad based and the resulting deliberation meaningful is valid, increased
participation alone is not sufficient.
Several obstacles prevent participation from being broad based and
meaningful. Efforts by NGOs to engage the state in a public dialogue run the
risk of being elitist, as do government-initiated exercises of consultation and
joint decision making. The level of dialogue easily deteriorates when there
is a lack of incentives--when citizens do not believe the consultation is likely
to achieve results or the political environment places little value on issues of
policy and service delivery as political currency.
These obstacles can be overcome. NGOs that are successful in making
budgets relevant to local communities are more effective in building broad-
based democratic practice. Government-initiated participatory exercises
can offer broad-based, meaningful opportunities for engagement. The

182 Alta F�lscher

quality of deliberation depends on the "rules of the game." Meaningful
deliberation is an outcome of citizens' capacity to learn how to deliberate
and to trust the process. This is illustrated well in the Suan Mon TAO case,
where positive outcomes from district civic forums took some time to
emerge, as participants learned to trust one another and the local govern-
ment. However, it is clear from both the Bangladeshi and Indonesian cases
that ensuring meaningful participation by marginalized groups in such
exercises is not a quick-win exercise. Despite mechanisms to ensure that
their voices are heard, women are still dominated by men in village deci-
sion-making forums.

Greater trust in government

Building trust in government through participation is a double-edged
sword. In Thailand trust in government was sufficiently strong to improve
tax collection. Where participation was initiated in the right circumstances
and in the right way, state effectiveness increased, social cohesion rose, and
democracy was strengthened.
Participation alone does not yield benefits, however. If participation
fails to deliver real benefits, trust in government can decline. If participation
represents mere process without substance, it can entrench poor governance
practice and deteriorate the citizen-state relationship.

Success Factors

How do the context and nature of participation affect the effectiveness of
initiatives? Two sets of factors play a role. The first belong to the environ-
ment in which the participation initiative is launched. The second concern
how the initiative is designed and implemented.

The environment in which the participation initiative is launched

Several factors in the environment surrounding a participatory exercise
have a decisive impact on outcomes. The unwillingness of state actors to
listen is a "kill factor" for consultation and joint decision-making initia-
tives. The unclear division of roles and responsibilities and the lack of
policy or fiscal autonomy at the local level render civil society initiatives
meaningless in influencing policy making and budgeting. An array of fac-
tors in the environment may be more or less disabling, but a successful
participation initiative can create its own reinforcing enabling conditions
over time.

Participatory Budgeting in Asia 183

fac t o r 1 : t h e nat u r e o f t h e f o r m a l a n d i n f o r m a l
p o l i t i c a l s ys t e m . What drives politics in a country is an important
enabling/disabling factor in determining the scope for civil society�driven
policy and budget initiatives.If policy issues have little currency,initiatives that
focus on influencing policy and resource allocation decisions may have less
scope than initiatives that track expenditures and service delivery quality.
If the political system is based on patronage and the politics of identity,the
risk of government-based participation systems becoming instruments within
that system is great. If politics are more closely related to policy issues, there is
a greater likelihood the state will be interested in genuine participation.

fac t o r 2 : t h e w i l l i n g n e s s o f s tat e a n d l o c a l
g ov e r n m e n t o f f i c i a l s t o l i s t e n . If state actors are willing
to listen to citizens' needs and preferences and to take their opinions about
service delivery seriously,the scope for meaningful civil society initiatives that
operate outside of government is much larger. If state actors are unwilling to
listen,initiatives that focus on policy and budget decisions ex ante may be less
effective than initiatives that highlight delivery inefficiency and wastage.
In government-initiated participatory exercises, the intention of state
actors is critical. If they are truly willing to engage with citizens, as in the Thai
case studies, tangible results can emerge. If their willingness is unclear or
absent, efforts may not only be futile but counterproductive.

fa c t o r 3 : l e g a l , i n s t i t u t i o n a l , a n d p o l i c y
f r a m e wo r k s f o r pa r t i c i pat i o n . If the national constitu-
tional context or formal legal and policy frameworks encourage citizens'
voice, civil society�initiated exercises are more able to find effective access to
public institutions. The absence of these legal and policy conditions does not
disable initiatives, however. The two audit-type examples show that success-
ful civil society initiatives can lead to a more conducive policy framework.
Establishing national legal and policy frameworks for participatory
measures can stimulate successful practice at the local level, as illustrated by
the case studies from the Philippines and from Thailand, all of which
emerged from a national policy directive. Local participation can still occur
if the national framework is weak, however, as it did in Bangladesh and
Indonesia. In both cases, however, participation was predicated on grants
that bypassed local government structures and budgets. Access to funds is
therefore an enabling factor. The lack of legal and policy frameworks is likely
to be disabling only if the local government is dependent on nationally gen-
erated or collected revenues.

184 Alta F�lscher

f a c t o r 4 : c l e a r a n d f u n c t i o n a l d e c e n t r a l i z a -
t i o n f r a m e w o r k . Lack of clarity of the government's roles and
responsibilities and lack of policy and fiscal autonomy are limiting factors:
there is little point in holding subnational governments to account for
service delivery if they do not have the fiscal capacity to provide adequate
services. Lack of clarity and autonomy could therefore be seen as a kill factor
for policy advocacy initiatives but not necessarily for initiatives that focus on
accountability for delivery.
If subnational governments have little policy or fiscal autonomy,
participation initiatives are unlikely to take hold unless the government has
access to external sources of funding (as in Bangladesh and Indonesia) or
uses the participatory mechanism to generate more of their own resources
for greater autonomy (as in Thailand). Lack of clarity and autonomy is
therefore an enabling/disabling factor but not necessarily a kill factor.

fa c t o r 5 : t h e b u d g e t i n g e n v i r o n m e n t, i n c l u d i n g
l i n k a g e s b e t w e e n p l a n n i n g a n d b u d g e t i n g . Citizen
involvement in the budget process often involves identifying priorities rather
than allocating resources to those priorities; budgeting is still the domain of
government officials.Where strong mechanisms link planning and budgeting,
this is of little consequence. Where planning and budgeting are separated,
however, the impact of citizen participation is much less evident.
In the Philippines, for example, planning and budgeting at the local level
are still separated. This may mean that the impact of participation mecha-
nisms on entrenched systems of patronage and on corruption and abuse of
power is limited, because it is through the budget process that these factors
come into play (Brillantes 2005). In contrast, in Thailand deliberative civic
forums, coupled with commitment by local officials and elected office hold-
ers to the outcomes of the participative process, have narrowed the gap
between planning and budgeting. The budgeting environment is therefore
an enabling/disabling factor for both initiatives that effect change through
activities outside the state and those that increase civil society participation
in the public action space. In Bangalore the city financial management
improvement program provided an enabling information environment for
the activities of PROOF.

f a c t o r 6 : t h e c i v i c c u l t u r e a n d c i v i c c a p a c i t y
f o r p a r t i c i p at i o n . While the presence of a civic culture and
capacity for participation are enabling factors for quicker results, a successful
process provides incentives for the development of such capacity, as the Suan

Participatory Budgeting in Asia 185

Mon TAO case study illustrates. The DISHA and MKSS cases provide
convincing evidence that, if other enabling factors are present, the technical
nature of policy making and budgeting need not be a barrier to participation.
The civic culture and civic capacity for participation are therefore
enabling/disabling factors for both initiatives that effect change through
activities outside the state and those that increase civil society participation
in the public action space.

The design and implementation of participatory initiatives

Several factors affect how participatory initiatives can best capitalize on
enabling environments or overcome disabling ones. These include the quality
of leadership and the level of facilitation skills employed in public forums;
the extent to which the initiative balances between including traditional
community leaders and ensuring broad-based participation; the application
of universal rules of good budgeting to participatory processes; the use of
multiple mechanisms; and the provision of accessible, relevant, and timely
information to citizens.
Suwanmala (2005) singles out the quality of mayoral leadership as a
significant factor in ensuring that participatory practices are embedded in
local budgetary practice. Leadership of civic forums in Thailand and of
social audit hearings in India was critical in ensuring that participatory
mechanisms led to substantive outcomes. Mechanisms for reconciling
different interests also depend on the level and quality of facilitation. In
Bangladesh, India, and Thailand, external facilitation has made civic devel-
opment forums and development committees functional.
The Thai case studies demonstrate the tension between including
traditional community leaders and ensuring broad-based participation.
Village-level civic development committees were functional from an early
stage in the Huai-Kapi and Suan Mon TAOs because the project design
incorporated traditional local leaders into the structures. Doing so created
cohesive local support for the initiative. When inclusion of traditional
leaders is not counterbalanced with mechanisms to ensure broad-based
participation, however, such an arrangement can perpetuate the power
base of local elites. Mechanisms to ensure broad support include holding
meetings in the evenings so that most people can attend, inviting new
groups onto civic committees, and putting in place process rules that favor
marginalized groups.
The civil society initiative in Gujarat, India, illustrates how the balance
between expert (and perhaps more elite) inputs and broad-based participa-
tion can be facilitated by careful translation of information so that ordinary

186 Alta F�lscher

citizens can access and identify with the campaigns. However, broad-based
participation can remain elusive and should be a constant monitoring point
for project managers.
The Indonesian case points to the importance of building the necessary
capacity for participation in civil society before deciding on which projects
will be undertaken within the grant envelope. In India, DISHA/Pathey
devoted much attention to building the capacity of state legislators and local
client groups to engage with the Pathey analysis and to understand the local
budgeting system. MKSS project staff members put considerable effort into
building local capacity by engaging citizens in discussion and information-
gathering. In contrast, in Thailand less time was spent on preparation
and capacity building, possibly because a platform for civic participation
already existed.
Participatory initiatives that follow the basic principles of good bud-
geting are more effective in producing desired outcomes. In the Suan Mon
TAO in Thailand, for example, village civic forums, development commit-
tees, and district committees operated within a financial constraint; the
processes were predictable; and clear rules were established and enforced
regarding when decisions are made. This approach facilitated the devel-
opment of trust between citizens and the state and among different inter-
est groups and villages. Such trust is essential if the ubiquitous budgeting
problems of weak prioritization, pork barreling in the face of competing
interests, uneven access to information, and counterproductive conflict are
to be avoided.
In contrast, initiatives that operate outside of the budgeting system
without a clear process and decision-rule framework flounder easily. An
example is the civic policy commissions in Rayong City, Thailand.
Participatory projects will fail to achieve broad-based, meaningful
participation unless they ensure that ordinary citizens have timely access to
information in formats that make the issues relevant and understandable.
Both the MKSS project and the DISHA/Pathey initiative were mindful of the
necessity to translate information into forms citizens could understand.
The impact of civic participation is enhanced if NGOs and state actors
deploy an array of mechanisms that reduce the risk of participation failing and
enhance the quality of the measures.DISHA deploys analysis of budget alloca-
tions together with tracking expenditures and surveying beneficiaries. The
TAO of Huai-Kapi uses household surveys to improve the quality of discussion
and decision making in civic forums. Naga City uses several mechanisms,
including referendums,committees,consultations,and information provision
to enhance participation.

Participatory Budgeting in Asia 187

Conclusions

TheAsian case studies suggest that civic participation mechanisms can improve
development outcomes while improving the quality of the citizen-state rela-
tionship.Whether initiatives are successful depends both on factors in the envi-
ronment in which an initiative develops and on the design and implementation
of the initiative itself. The maturity of the political system and the nature of
the political culture in a country or local area are a determining environmental
factor for the type of participation initiative that is likely to be effective.
In settings where public actors are willing to listen to citizen voice and
the local political culture is driven by public policy issues, well-designed
mechanisms that allow civil society direct access to and participation in pub-
lic decision making have the greatest impact on policy decisiveness, account-
ability, democratic practice, and trust in government. The case studies of
Suan Mon and Huai-Kapi TAOs in Thailand belong in this category. Pro-
gram initiators have more scope for selecting the type and level of partici-
pation than initiators who face different conditions.
Conditions of greatest risk in terms of participation occur where initia-
tives draw citizens into the state action space when the political culture is not
policy based and local officials and office holders have no real interest or
incentive to align policy and spending with citizen preferences. In these con-
texts such types of participation can be counterproductive. The Bangladeshi
and Indonesian case studies operate in this area. They manage these risks by
providing external funding and bypassing state structures where it mat-
ters--in managing the money.Village-level participation structures in both
cases have authority over project funds. While this may yield short-term
benefits, the sustainability of such initiatives is not certain. Effective long-
term engagement can occur only if sufficient local taste and capacity for par-
ticipation are built to change the overall environment so that the political
and governance context forces state actors to engage substantively.
Citizens' own initiatives to improve public transparency and the
accountability of state actors can yield successful results, even in environ-
ments in which citizens may not have immediate effect. The MKSS, CCAGG,
and DISHA/Pathey case studies illustrate how citizens who are thoroughly
prepared and work through coalitions can push their way into the public
space and demand a hearing. Such initiatives can also transform the partic-
ipatory environment from one in which state actors are unwilling to engage
with citizens to one in which they have little choice but to do so. Success
depends largely on selecting the correct entry point and carefully designing
and implementing projects in order to maximize citizen participation.

188 Alta F�lscher

Notes

1. Participatory budgeting in the broad sense refers to citizens'engagement with public
budgets, including such mechanisms as civil society analysis of spending policies (as
an input into public debate) and public audits. A narrower use of the term denotes
instances in which citizens have direct input into decisions about public resource use,
usually at the local level of government.
2. Reuben (2003) refers to this dimension of governance--the ability of governments
to fulfill citizen expectations--as decisiveness.
3. In Reuben's (2003) model of governance, this dimension of improved conditions is
referred to as accountability.

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Sub-Saharan Africa's
Experience with
Participatory Budgeting
a d r i e n n e s h a l l

his chapter reviews the experience of participatory budgeting by
T
subnational governments in Kenya,Mozambique,South Africa,
Tanzania, Uganda, Zambia, and Zimbabwe.1 It is based on a series of
case studies commissioned by the World Bank Institute on the expe-
rience of participatory budgeting in each of these countries.
The focus is on subnational governments because they are best
able to reach communities. These governments are diverse, each
facing a unique context in terms of settlement patterns,service needs,
revenue access, and capacities. Every local authority must approach
community participation in its own way, taking into account the
cultural backgrounds, capacities, and needs of its citizens.
The starting point for any participatory process is the legal
framework within which it is situated. The ability of subnational
governments to determine their own fiscal arrangements within the
legal framework also plays an important role in identifying how
civic participation is organized. Specific mechanisms have been
identified for encouraging participation in the budget process, and
in theory each country has allowed for participation that is accom-
modated in the budget cycle. In practice, the impact of participa-
tion on planning, budgeting, and implementing projects and
programs has not always been as great as intended.

191

192 Adrienne Shall

The first section of this chapter describes the legal and fiscal framework
for civic participation in policy making and budgeting at the subnational
level in each country. It outlines the mechanisms available for participation
in each country and how they operate in practice, examines how civic
participation is handled in the budget process, and assesses the impact
participation has had on policies and budgets in terms of meeting commu-
nity needs. The second section describes the challenges countries face in
implementing participatory budgeting and the lessons learned during this
process. The chapter concludes with recommendations relevant for Africa.

Legal Framework, Mechanisms for Participation, and
Impact of Participatory Budgeting

Every country examined in this chapter uses some form of citizen partici-
pation in the budgetary process. This section describes the different
approaches they have adopted and examines the impact participatory
processes are having on increasing the allocation of scarce resources where
they are needed most.

Legal Framework for Civic Participation in Policy-Making and
Budgeting Decisions

Specific legislation governs subnational governments in all of the countries
reviewed in this chapter. Except in Kenya and Zimbabwe, the constitution
recognizes local government and in some cases prescribes the need for civic
participation in local matters.

Kenya

Local authorities in Kenya are not enshrined in the current constitution. The
new draft constitution--which addresses the current constitution's short-
comings and allows for a more democratic and transparent state--sets out
the need to give powers of self-governance to the people at all levels and to
enhance public participation in the exercise of the powers of the state.
The Local Government Act sets out the requirements for the composi-
tion of local authorities, which consist of elected and appointed councillors.
There are three types of local authorities: municipal councils, county coun-
cils, and town councils. Each council exercises legal powers and duties; the
mayor plays a largely ceremonial role, with no executive powers. Most coun-
cil business is carried out through committees established under the Local
Government Act. However, the full council must approve all recommenda-
tions made by committees.

Sub-Saharan Africa's Experience with Participatory Budgeting 193

The Local Authorities Transfer Fund Act,implemented in 1999,provides
the mechanism for transferring funds from the central government to local
authorities. The act provides some certainty about the level of funding,
enhancing the predictability of intergovernmental fiscal transfers.

Mozambique

The Constitution of Mozambique defines the legal framework for decen-
tralization and the ways in which municipalities are set up. It enshrines civic
participation as one of the national values for local development.
The legal and institutional framework for local authorities is set out in
the Municipal Law.According to this law, municipal assemblies are to estab-
lish civic participation, promote accountability, and improve coordination
between the central and local governments. The participatory development
approach is not mandatory.

South Africa

Local government in South Africa is to a large extent governed by the
Constitution of South Africa and four national acts related to local
government. The constitution promotes the idea of developmental local
government, with each municipality giving priority to the basic needs of
the community and promoting its socioeconomic development. It encour-
ages the involvement of communities and community organizations in
local government.
The Municipal Structures Act of 1998 entrenches community partici-
pation by stating that the executive committee must report on the involve-
ment of communities in municipal affairs, ensure public participation and
consultation, and report the effects of such participation and consultation
on decisions made by local councils. Chapter IV of the Municipal Systems
Act of 2000 deals with community participation. Municipalities are required
to develop a culture of municipal governance that complements formal rep-
resentative government with a system of participatory governance. Com-
munity participation is required in the integrated development planning
process, the performance management system, the budget process, and
strategic decisions around service delivery.

Tanzania

The Constitution of Tanzania establishes local authorities in every region,
district, urban area, and village of the country. It states that the purpose of
these local authorities is to transfer authority to the people, and it gives local
authorities the power to involve citizens in the planning and implementation
of development programs within their areas. Local Government Acts 7 and 8

194 Adrienne Shall

require local authorities to foster cooperation with civil society, promoting
and ensuring democratic participation and control of decision making by the
people. Local authorities are required to consult with local communities as
part of their planning processes.

Uganda

The Ugandan Constitution and the Local Government Act of 1997 outline
the principles, structures, and functions of the local government system.
Local government in Uganda consists of a five-tier hierarchical structure,
with specific legislative, financial, and administrative roles assigned to each
tier. The constitution guarantees civic participation in the budget process by
requiring government to take the necessary steps to involve citizens in for-
mulating and implementing development plans and programs that affect
them. The Local Government Act also provides for popular participation as
a policy objective. The act requires district councils to prepare comprehen-
sive and integrated development plans that incorporate the plans of lower-
level local governments for submission to the National Planning Authority.
It also requires lower-level local governments to prepare plans that incor-
porate the plans of lower-level councils in their areas of jurisdiction.
Although local authorities can formulate bylaws, they appear reluctant to do
so, especially with regard to civic participation.

Zambia

The Local Government Act of 1991 establishes local authorities in Zambia
and sets out their functions and responsibilities. The mayor of a local
authority has no executive powers; all decisions are made by the full coun-
cil, unless such authority is delegated to a committee. The Local Government
Act allows local governments to formulate their own bylaws as long as they
adhere to certain prerequisites set out by the central government.
The act contains some provisions that promote civic participation
and others that deny participation. It states, for example, that all council
meetings shall be open to the public, but the council may, by resolution,
exclude the public from a meeting whenever confidential matters are to
be discussed and publicity may be prejudicial to the matter. A copy of any
bylaw must be deposited at the offices of the council and be open to
inspection. The fact that anyone may lodge a written objection to the
bylaw allows for a degree of community participation in decision mak-
ing. In practice, however, participation is limited, as viewing the bylaw
requires citizens to travel to the council offices, which is costly and in
some cases unaffordable.

Sub-Saharan Africa's Experience with Participatory Budgeting 195

Zimbabwe

Local government in Zimbabwe is governed by the Rural District Councils
Act and the Urban Council Act. In addition to carrying out the functions
and powers detailed in these acts, local authorities can make policy through
bylaws, regulations, and resolutions dealing with local planning and develop-
ment. Bylaws of councils cannot, however, become law unless the minister
of local government approves them.
The Constitution of Zimbabwe does not recognize local government.
The enabling legislation in Zimbabwe advocates for consultation rather than
participation. Citizens are not included in the decision-making process but
are permitted to make public objections after decisions have been made.

The Subnational Government Fiscal Framework

In all seven countries, local government has the power to manage its own
fiscal revenues and expenditures, subject to national framework conditions.
In Mozambique and South Africa, specific acts spell out how local finances
are organized. In the other countries, financial arrangements form part of
the general local government legislation.

Kenya

The financial arrangements for local authorities in Kenya are specified in
the Local Government Act. These include the need to prepare annual
budgets, raise revenues, and incur expenditures according to the approved
estimates. The budget is produced under the guidance of the minister of
local government. Revenue sources include user fees and charges, income
from trading activities, rents, permits, and property taxes. Local authorities
may also borrow and issue bonds or stock, subject to conditions laid out by
the minister of local government. Local authorities also receive grants from
the central government.

Mozambique

The Municipal Finance Act specifies how local finances are organized in
Mozambique.Subnational governments are expected to prepare,approve,and
control their own budgets, observing the general rules and principles of the
national budgeting system.Revenue sources include taxes,levies,user charges,
and transfers from the central government. Transfers from central govern-
ment are calculated according to a formula based on population size, area,
revenues collected by the local authority from the community, and level of
development. These transfers are unconditional. The Municipal Finance Act

196 Adrienne Shall

allows subnational governments to borrow from banks and other financial
institutions to finance capital expenditure. In practice this has not happened;
instead the central government has borrowed on behalf of local governments.

South Africa

The Municipal Finance Management Act of 2003 determines the manage-
ment of fiscal and financial affairs of municipalities and municipal entities
in South Africa. The act extends community participation by requiring that
the accounting officer of the municipality make public the budget and all
supporting documentation and invite the local community to submit
comments on the budget. The municipal council is obliged to consider the
views of the local community regarding the budget.
Municipalities have the ability to raise their own revenue through taxes
and user charges. The Municipal Property Rates Act of 2004 regulates the
power of a municipality to set rates on property. The act has a direct impact
on communities and allows for community participation.Funds are allocated
to local governments from both the national and provincial governments
through three major funding sources: an unconditional equitable share, condi-
tional grants, and grants-in-kind. Municipalities may also raise debt, within
strict guidelines set out in the Municipal Finance Management Act.

Tanzania

The Local Government Finance Act defines financial arrangements for local
authorities in Tanzania. It allows local authorities to incur expenditures nec-
essary for functioning and gives authorities the power to raise their own rev-
enue by imposing taxes. Other revenue sources include conditional central
government transfers for education, health, water, roads, and agriculture.
The current allocation system is inefficient, cumbersome, and non-
transparent. Allocations are not based on objective criteria or formulae but
on the lobbying ability of local authorities. The system thus perpetuates
existing inequalities and inhibits civil society from participating in the
prioritization, planning, and budgeting processes.

Uganda

Local authorities in Uganda have three sources of revenue: government
grants, locally generated revenue, and donor funds. The vast majority of
grants from the central government are conditional grants earmarked for
primary service delivery. These grants account for as much as 80 percent of
local revenue. Other grants include unconditional or block grants, mainly to
fund administrative costs, and equalization grants for local authorities

Sub-Saharan Africa's Experience with Participatory Budgeting 197

whose service delivery is below the national average standard for particular
services. A Local Government Finance Commission recommends the
amounts for the various grants to be allocated to each local authority. It also
advises local government on appropriate tax levels.

Zambia

The Local Government Act gives local authorities in Zambia the power to
define, collect, and manage their own fiscal revenue from own local sources
and spend it in the best possible manner. Revenue comes from local taxes,
including property taxes, personal tax (levies), and licenses; fees and charges,
including fees for meat inspections, permits, and building plans; and specific
and general grants from the central government. Local governments may
also borrow from the central government or from private sector institutions.

Zimbabwe

Local governments in Zimbabwe determine their own operating and capi-
tal budgets. They also have the power to raise revenue by means of property
taxes, permits, levies, license fees, and user charges. Local authorities may
also borrow, subject to certain conditions. Long-term borrowing is permit-
ted only for capital expenditure or for eliminating outstanding long-term
debt. A ministerial directive requires that local authorities prove that resi-
dents were consulted in the formulation of annual budgets.

Mechanisms for Participation

In all countries except Mozambique and Zambia, participation is mandatory
and the mechanisms for participation are spelled out in national legislation
governing the local sphere.Most countries use a participatory planning process
to prioritize community needs and feed those needs into the budget process.
Although each country has its own mechanisms for participation, all
divide the local authority into wards. Each ward has a ward committee,
consisting of an elected councillor and community representatives.

Kenya

Under the Local Government Act, citizens in Kenya cannot attend council
committee meetings at which important issues are discussed; they are
permitted to attend only full council meetings, where proceedings are largely
a formality. Citizens can participate in local government decision making
only if the mayor calls a public meeting of the residents of an area to solicit
their input--something that few mayors have done.

198 Adrienne Shall

The Local Authority Transfer Fund (LATF) provides funds and incentives
to local authorities to improve service delivery and strengthen financial man-
agement. One of the conditions for receiving funding is that local authorities
submit a Local Authority Service Delivery Action Plan (LASDAP) document-
ing that the local authority conducted a participatory planning process and
identified a three-year rolling program of projects and activities linked to the
budget. Before the LASDAP process was established, no forum existed for citi-
zens to voice their demands. The LASDAP affords citizens the opportunity to
make proposals on the basis of their local priorities. All stakeholders--includ-
ing formal and informal community-based groups, religious, women's, non-
governmental organizations (NGOs), citizens, and any other groups registered
for participating in the process--are encouraged to participate in the process by
identifying their priority needs and participating in implementing and moni-
toring the projects. As part of the LASDAP process, ward representatives are
elected to follow up on project matters on behalf of all stakeholders. Evidence
from the case studies suggests that citizen participation has been more exten-
sive than originally expected and has come from a wide cross-section of society.
Ministerial circulars from the Ministry of Local Government describe
elaborate procedures for convening LASDAP consultative meetings. In
Nairobi consultative meetings are first held in each of the city's eight
constituencies. At these meetings ward representatives are invited to make
presentations. All people attending the meetings together decide on priori-
ties. The priorities from all constituencies are then harmonized in a citywide
consultative forum attended by three representatives from each ward, the
ward councillor, and city officials. The citywide meeting is not always
harmonious, with disagreements sometimes arising between the ward
representatives and the ward councillors.
The resource envelope for the capital budget (which constitutes 10�15
percent of the entire budget) must be publicized before the meeting. The
LATF also prescribes strict criteria for disseminating information, including
legal notices, newspaper advertisements, and government circulars detailing
the allocation of funds and criteria for these allocations. Citizens are encour-
aged to demand regular process reports from councils to determine and
monitor the use of funding.
Other participation mechanisms in Kenya include barazas and harambee
meetings. Barazas are public meetings called by traditional chiefs to educate
citizens about government policies and mobilize them for development.
Ward councillors use these meetings to reach out to constituents. Harambee
committees are self-help groups that identify priority projects and then raise
funds to finance them through personal and well-wishers' contributions.

Sub-Saharan Africa's Experience with Participatory Budgeting 199

Mozambique

Participatory budgeting is not mandatory in Mozambique, although local
authorities are free to embrace this approach if they wish. Dynamic mayors
who appreciate the value of citizen participation have done so; others have not.
Community participation in Mozambique originates through bairro
(ward) development committees made up of residents from each ward. The
committee convenes meetings to discuss communal needs, forwarding a list
of needs to the municipality. The bairro development committees agree on a
program and its budget,which are then incorporated into the local authority's
plans. The local authority then budgets for the community financial shortfall.
In Dondo municipality the local authority mobilizes the community
through civic groups.Working together, municipal officials and civic groups
identify areas of need and agree on the interventions required. The local
authority calls the civic groups to meetings and determines the agenda.
Together the authority and civic groups then determine the budget require-
ments and find funding, which is usually external if it is for capital projects.
The local authority begins the civic participation program by conduct-
ing research and consulting communities on demographic and infrastruc-
tural issues. It also administers a survey on civil society organizations
(CSOs). With the assistance of the municipality, the bairro development
committee identifies three priority projects. A two-day participatory work-
shop attended by community representatives is then held, at which partici-
pants agree on the top three priority projects, which are subsequently
integrated into the municipal budget.
In Manhica municipality the community did not understand the role of
the newly formed municipal council or their role in community participation.
To increase their capacity, civic awareness meetings were established for 100
people from each bairro. The meetings covered the role of municipalities in
local development, civic participation in municipal issues, democracy, and
the effect of floods (the major problem in the area) on the community. The
municipality provided a transport allowance and snacks for meeting partici-
pants as well as technical input. Twenty meetings were held, covering
29 bairros, with a 90 percent turnout of invitees. One of the main outputs of
this process was a shared vision of how the municipality should cooperate
with its community.

South Africa

Civic participation in South Africa takes place mainly through a ward
committee system or a subcouncil participatory system for large cities.Ward

200 Adrienne Shall

committees consist of a ward councillor and 10 members elected by the
community. Participation of ward committee members is voluntary, and
they receive no remuneration. Ward committees remain largely advisory
committees, making recommendations on any matter affecting the ward to
the ward councillor, who takes them to the council. Subcouncils consist of
councillors representing each ward as well as other councillors, to ensure
that each political party is represented according to the proportion of votes
received in a ward.Other mechanisms for enhancing community participation
include public meetings, public hearings, consultative sessions, report-back
meetings, advisory committees, focus or interest groups, announcements in
the newspaper, community radio, and e-government.
In Mangaung municipality the major mechanism for participation in
policy-making and budgetary processes is the ward committee system. The
ward committees use a community-based planning approach that aims to
empower local communities to play a role in the planning process. This
approach allows the ward committee to identify and meet with different
social groups separately. Each group identifies its priority outcomes and
main vulnerabilities.
Ward committees focus on "on the ground" participation. In contrast,
the Integrated Development Planning Representative Forum allows broader
participation in the discussion of municipal issues.2 The Forum includes
government, civil society, the private sector, and academic institutions. In
2004 a budget conference was held for the first time in order to deepen
democracy by involving stakeholders in the process of defining the develop-
ment priorities, programs, and projects of the municipality and aligning
Integrated Development Planning priorities with the budget.
The Ekurhuleni municipality uses the ward committee system as well as
other participation mechanisms. These include:

an Integrated Development Planning campaign targeting the broader
community in order to strengthen participation in the Integrated Develop-
ment Planning process. Mass meetings have been held using theatrical
performances explaining the planning process and describing the various
actors and their responsibilities;
a "Budget Tips" campaign encouraging the public to provide feedback
and suggestions on priorities for the budget by means of e-mail, notes
deposited in boxes at libraries, and letters to the mayor;
a mayoral road show at which the mayor and members of the mayoral
committee travel to the three regions, inviting citizens to attend meetings
where questions from the community are answered;

Sub-Saharan Africa's Experience with Participatory Budgeting 201

the Mayoral Business Initiative, which invites selected groups, such as
labor movements, the business community, and the mining sector, to ask
questions and contribute to discussions;
a monthly newsletter produced by the municipality, which is distributed
to the community.

Tanzania

The Local Government Reform Project was initiated to build the capacity
of local authorities, increase their financial autonomy and decision-
making authority, foster good governance, and improve access to and the
quality of service delivery. One of the objectives of the project is to ensure
democratic and participatory decision making, transparency, and
accountability. The reform manual that guides local authorities in the
implementation of the project mandates stakeholder consultations at
various stages of the reform process. All local authorities have formed
council reform teams, consisting of councillors, management staff, and
civil society, to supervise the reform process and advise the local authority
on various issues.
Consultation is required for the annual budget and development plan-
ning processes. Guidelines have been issued that require local government
authorities to use the Obstacles and Opportunities to Development plan-
ning tool for participatory budgeting. The tool is a simplified model for a
SWOT (identifying Strengths, Weaknesses, Opportunities, and Threats)
analysis that identifies ways in which a community can overcome major
constraints to local development in service delivery, infrastructure, or
economic development deficiencies. Using the tool, communities prioritize
their problems for budget allocation by the local authority and identify
resources that can contribute to the solutions. Only a few local authorities
have fully implemented these consultations, as the guidelines have only
recently been issued.
In the Singida District Council, many institutions--including com-
munity-based organizations at the ward and village levels, theme- and sector-
based CSOs, political parties, and the private sector--play important roles
in the participatory development process. These institutions help create
public awareness, mobilize citizens, develop training in participatory and
technical skills for planning and budgeting, and provide administrative
and financial support to the process. The annual participatory planning and
budgeting process involves direct participation of citizens in grassroots
meetings of the village assembly. Communities rank and prioritize their

202 Adrienne Shall

problems and submit project proposals for discussion and approval of the
ward development committee. The proposals are forwarded to the Singida
District Council, which consolidates them into the district annual budget
and development plan.
Medium-term decisions at the district level are developed from two
stakeholder consultations. Participants to these consultations are carefully
selected from the institutions mentioned above. Medium-term decisions
at the village level are reached through participatory rural appraisal
processes that allow all residents to participate directly in approving vil-
lage plans and budgets.
The Ilala Municipal Council developed a tailored training program on
urban participatory planning and budgeting, in collaboration with the
Institute of Regional Development Planning. In 2002 residential and field
training sessions were conducted for council staff, ward councillors, and
representatives of NGOs and community-based organizations (CBOs)
from each ward. The training focused on planning, budgeting, advocacy
skills, and roles and responsibilities of all stakeholders. In 2003 the Ilala
Municipal Council established 22 community-level planning and budget-
ing support teams in each ward to empower communities with participa-
tory planning and budgeting skills. Each team consists of 10 members. An
effort was made to ensure that teams were apolitical, gender balanced, and
inclusive of vulnerable groups. Team members were trained in participa-
tory mechanisms, technical planning, and budgeting, skills that they could
then pass on to communities.

Uganda

Several mechanisms are in place to involve citizens in the budgetary process
in Uganda. The budget conference allows key stakeholders to reach con-
sensus. According to Ministry of Local Government guidelines on partici-
patory planning by lower councils, annual planning and budget conferences
to review performance and agree on priorities should be held by November 15.
A wide spectrum of stakeholders agrees on local government priorities at
these conferences. Citizens submit their needs and priorities through
elected councillors. Citizens and representatives of CSOs may also attend
the budget conference.
Community needs are raised at village- and ward-level planning meet-
ings in Soroti municipality. In Entebbe municipality the council has run out-
reach programs to educate and inform citizens about budget processes
(although some citizens complain that the dates for the budget conference
are not communicated in time). Once the draft budget has been finalized,

Sub-Saharan Africa's Experience with Participatory Budgeting 203

citizens may obtain copies from the council, although their inputs are rarely
considered at this stage.
Another mechanism for participation is the Participatory Poverty
Assessment Project, established in Uganda in 1997. A Participatory Poverty
Assessment aims to solicit the views of poor people and incorporate them
into policy planning and the allocation of resources.The information derived
from the project has been incorporated into the Poverty Eradication Action
Plan, the framework for Uganda's budgetary policy formulation. Budget
reference groups were established in 2000, with the mandate to simplify the
language of budget documents and demystify budget figures in order to make
them more accessible to the general public.
The media play an important role in enhancing civic participation in the
planning and budgeting processes in Soroti municipality.Announcements to
attend the budgetary conference are made on the radio and in the newspaper,
creating awareness and educating citizens on municipal affairs. Local radio
stations host phone-in talk shows where citizens may ask questions and
comment on municipal procedures.The council also maintains a database of
all registered NGOs and CBOs based in its jurisdiction. The leaders of these
organizations play an influential role during the budget conference, as they
represent the needs of their community.
In contrast, the media do not play an important role in the participa-
tory process in Entebbe municipality. As a result, communication between
the council and citizens is not very effective. To improve communication, in
2000 the mayor, his technical team, and civic leaders launched an outreach
program, during which members of the community were informed of and
educated about the budget process and consulted on their priorities. The
program gave councillors and council officials an opportunity to become
acquainted with the situation on the ground. It also gave citizens the oppor-
tunity to question councillors and officials about various aspects of the
council's functions. Although the outreach program was successful, it was
very expensive and could not be repeated.

Zambia

Zambia has no formalized participation mechanisms, no local structures
for raising awareness and educating citizens about council business, and
no mechanisms for sharing information or building consensus. Council-
lors do not appear to consult members of their constituency, and members
of the public are not aware of their rights to attend council meetings or to
inspect council accounts or proposed bylaws. As a result there is no civic
participation in policy and budget decision-making processes.

204 Adrienne Shall

On its own initiative, the Kabwe Municipal Council has embarked
on a program to involve its residents in decision making, planning, and
implementation of developmental projects to improve living conditions. It
created subdistrict structures called residents development committees,
made up of a group of residents living in an area or ward. Through the
committees, citizens have the opportunity to provide input regarding
desirable improvements, set and prioritize goals, evaluate work done by the
local authority, redefine needs, and lobby and negotiate with the council
and the Ministry of Local Government. Recommendations from the
committees are passed on to the ward councillor and the council's depart-
mental heads, who together present them to the full council. To establish a
link between the council, the residents development committees, and other
stakeholders, the Kabwe Municipal Council created a Settlement Improve-
ment Unit in the Public Health and Social Service Department, charged
with promoting civic participation. The local Chamber of Commerce is
supportive of increasing civic participation and is campaigning for a more
formalized participatory process. The Municipal Development Partnership
for Eastern and Southern Africa together with the Kabwe Municipal Coun-
cil initiated a pilot project to strengthen civic participation in municipal
governance by mainstreaming civic input into the strategic planning
process in Kabwe.

Zimbabwe

Subnational governments in Zimbabwe use a variety of instruments for
public consultation. They include the government gazette; notices calling
for objections in more than one issue of the newspaper; public notices at
the subnational government office; ministerial commissions; ministerial
investigations; consultation with the local authority; councillor input;
ward development committees; the right of the community to attend
council meetings; the right of citizens to make copies of bylaws, budgets,
resolutions, and voter rolls; and council subcommittees. These mechanisms
assume a high degree of literacy and interest in civic matters and are
consistent with a top-down approach. Although Zimbabwe has a high
literacy rate, it appears that these mechanisms are not as widely used as
initially envisaged.
With the introduction of the 1984 Rural District Act, a more grassroots
approach to civic participation emerged.Participation is now based on a bot-
tom-up approach, beginning with development committees at the village,
ward, district, and provincial levels. Each ward development committee is

Sub-Saharan Africa's Experience with Participatory Budgeting 205

chaired by the ward councillor and consists of chairs and secretaries of
village development committees,neighborhood development committees,or
both. The main function of the ward development committees is to prepare
and submit an annual ward development plan to the district development
committees, which then recommend to the council matters to be included in
annual and long-term development plans.
In the city of Gweru, civic participation occurs through ward commit-
tees. Partisan cells (political structures) and village committees contribute
issues to the ward development committee meeting agenda, setting out and
prioritizing needs. Councillors bring the minutes of these meetings to the
town clerk, who puts the issues raised on the council agenda for discussion.
The ward development committee meeting is also used by councillors to give
feedback to ward members. Through representative attendance in budget
formulation workshops, civic groups in Gweru have played a role in identi-
fying needs, participating in strategic planning, and formulating budgets.
They have also helped determine tariff levels and capital expenditure prior-
ities through budget formulating committees.
The Mutoko Rural District Council encourages civic participation
through workshops, ward meetings, village development committee meet-
ings, joint meetings with traditional leaders, and meetings with political
bodies in the community. Civic society organizations hold workshops every
quarter at which they review the local authority budget performance and
agree on modifications and actions required to keep plans on course. After
these quarterly reviews, feedback meetings are organized at the ward and
village levels to disseminate information and generate debate.

Civic Participation and the Budget Process

In theory all countries provide for some form of consultation or participa-
tion during the budget process. This occurs mainly at the beginning of the
process. In only a few countries is public input solicited after the final budget
is put together.
Although the budget process allows for participation, it is not always
clear that input from citizens is taken seriously. In many cases the budget still
appears to be driven by officials and to a lesser extent councillors.

Kenya

Participation in the budget process started with the preparation of the
2001/02 budget. Local authorities are required to prepare a Local Authority

206 Adrienne Shall

T A B L E 6 . 1 Budget Cycle for Subnational Governments in Kenya

Month Activity

September Ministerial circular is issued explaining procedures for preparing
the budget for the LASDP.
December Appointed council representatives analyze performance of current
budget.
January Appointed council representatives prepare the LASDP envelop,
based on previous performance plus 10 percent.
Information is published in local newspapers and posted on local
notice boards in all wards.
Stakeholders are invited to attend ward-level participatory budget
meetings at which capital projects are prioritized.
Stakeholders suggest projects and agree on priority lists.
February Citywide consultative meeting is held at city hall. Wards negotiate on
projects with cross-border implications and agree on citywide projects.
Council meets to adopt recommendations from citywide meeting.
Budget is submitted to Ministry of Local Government and Finance
Ministry.
March Appointed council representatives prepare departmental budgets
(capital and recurrent).
April Departmental budgets are submitted to relevant committees for
discussion and recommendations.
May Finance Committee considers consolidated budget (LASDP and
departmental budgets).
June Special full council adopts budget submitted by Finance Committee.
Council submits budget to Ministry of Local Government, with copy
sent to Finance Ministry for approval.

Source: Adapted from Wamwangi 2004c.
Note: LASDP = Local Authority Service Delivery Plan.

Service Delivery Plan using a participatory process that includes local resi-
dents and stakeholder groups (table 6.1).
Although citizens participate in the process, the budget is still driven by
municipal officials. Citizens participate only in the prioritization of capital
projects; they have no opportunity to provide input once the consolidated
budget is produced. Furthermore, the consolidated budget presented to the
council is a technical document that councillors find difficult to understand.
Councillors' intervention is thus limited and generally occurs only in cases
where they may derive personal benefits or political mileage.

Mozambique

Participation in the budget process occurs at the bairro level in Mozam-
bique, where citizens are given an opportunity to prioritize needs within

Sub-Saharan Africa's Experience with Participatory Budgeting 207

their communities. Preparatory research into community needs is done
through a participatory planning approach. Councillors then meet with
bairro development committees to set priorities. Stakeholder meetings are
held to set global priorities. Community priorities are incorporated into
council budgets and plans and approved by the council before the budget is
sent to the Ministry of State Administration for approval. The budget is then
implemented and monitored. It is not clear from the case studies whether
citizens have the opportunity to provide input into both the capital and
recurrent budgets.

South Africa

Mayors in South Africa are responsible for coordinating the processes for
preparing the budget and for reviewing the municipality's integrated devel-
opment plan and budget-related policies.At least 10 months before the start
of the financial year, the mayor must table in council a time schedule out-
lining key deadlines, including deadlines for consultative or participatory
processes. Immediately after the annual budget is tabled at a municipal
council meeting (at least 90 days before the start of the financial year), the
municipality must make public the annual budget together with any sup-
porting documentation and invite submissions to the council on the budget
from the community. The council must then consider any views put forward
by community representatives or any other organs of state and, if necessary,
revise the budget and table amendments for consideration by the coun-
cil. Each municipality may prepare its own budget process within this
framework. The budget preparation process for Mangaung municipality is
typical (table 6.2).
For the 2004/05 budget cycle in Mangaung, communities were asked to
comment and provide input only on the capital budget. The city manager
has acknowledged the need to strengthen participation and expressed his
intention to solicit input on the operational as well as the capital budget. He
has also agreed to provide the clusters with more information on project
backlogs, service levels in different areas, trends and patterns of expenditure,
and growth projections.

Tanzania

Tanzania's annual planning and budgeting process involves direct participa-
tion of citizens in grassroots meetings of subward and village governing
councils (table 6.3). Communities rank their problems and submit project
proposals to the ward development committee for discussion and approval.

208 Adrienne Shall

T A B L E 6 . 2 Budget Process in Mangaung, South Africa

Stage Activity

1: External and internal Budget parameters are established to make revenue
environment consultation projections.
Municipality is divided into clusters of wards. Wards
are notified of the dates of cluster meetings well in
advance of the meetings.
Cluster meetings are held, at which development
priorities and projects are discussed and prioritized
for each cluster.
Refined community proposals are presented to the
broader stakeholder forum to solicit additional input.
2: Screening of projects All submissions from the clusters and stakeholder
and programs forums are submitted to the mayor, the mayoral
committee, and the executive management team,
which discusses them and prepares the budget bill.
Budget bill is publicized, so that stakeholders and the
public can prepare for the budget conference,
which provides another opportunity to provide
input into the budget.
After the budget conference, the draft budget is submited
to the National Treasury for input and comments.
Budget committee finalizes the budget.
3: Approval and reporting Final budget is tabled and approved by the council.
Final budget is submitted to the auditor-general and
the national and provincial governments.
Stakeholders are informed of the budget cycle for the
forthcoming budget year.

Source: Adapted from Mangaung Local Municipality 2004.

Uganda

The budgetary process for local authorities in Uganda consists of seven
steps (table 6.4).
Citizen participation is limited to identifying needs and priorities for
submission to the budget conference. Citizens may obtain copies of the draft
budget once it has been finalized, but at this stage it is too late to consider
any changes that citizens may suggest.

Zambia

Citizen participation is not mandatory in Zambia, but some municipalities,
such as Kabwe, have nevertheless accommodated it in the budget cycle

Sub-Saharan Africa's Experience with Participatory Budgeting 209

T A B L E 6 . 3 Budget Process for Subnational Governments
in Tanzania

Stage Activity

1: Preparation of The President's Office, the regional administration,
budget guidelines and the local government issue budget policies,
guidelines, and ceilings.
The regional secretariat advises the municipal council
on policy, guidelines, and instructions.
The municipal council prepares local guidelines and
policies for wards.
2: Public consultation and Ward extension staff are trained, and the ward
identification of priorities development committees issue guidelines to
community-level planning and budgeting support
teams.
Community-level planning and budgeting support
teams conduct participatory poverty assessment
budgeting.
Public meetings are held to rank priorities.
Ward development committees approve priorities.
3: Compilation of draft The council management team compiles and
budget synthesizes budget proposals.
The council management team consults with CSOs.
The council management team compiles the final
draft budget, which is then discussed by council
committees.
4: Approval and adoption The full council approves and adopts the budget.
of budget Citizens have the opportunity to provide input both
during the initial discussion of priorities and after
the draft budget has been put together.

Source: Adapted from Lubuva 2004b.

(table 6.5). Citizens in Kabwe participate through ward-level residents
development committees.
Recommendations by the committees are passed on to the ward coun-
cillor and to council department heads. Participation occurs only in the first
stage of the process and is limited to identifying needs and priorities.

Zimbabwe

Formal budget cycle processes in Zimbabwe are established by law and by
informal processes adopted by local authorities that build on experience
developed from wider participatory practices. An example is the budget

210 Adrienne Shall

T A B L E 6 . 4 Budget Process for Subnational Governments in Uganda

Stage Activity

1: Budget conference held Citizens' needs and priorities are raised at village- and
(January�February) ward-level planning meetings. Needs and priorities
are submitted through elected councillors to the
budget conference. During the conference, which
citizens and representatives of CSOs can attend, the
council agrees on a list of priorities and on guide-
lines for sectoral allocation.
2: Sectoral priorities The chief executive as well as members of the standing
identified (March�April) committees (including heads of departments) set
sectoral policy guidelines and agree on costed
sectoral priorities. Citizens are not directly involved
in this stage, but the needs they raised at the budget
conference are considered.
3: Costed sectoral priorities Members of the standing committee for finance,
reviewed (April�May) together with heads of department, review the
proposals made and try to establish sectoral link-
ages. The output of this stage is a draft budget pro-
posal for the council.
4: Final draft budget The standing committee for finance, the technical
considered (May) planning committee, and the chairs of the standing
committees meet to consider the draft budget. The
financial allocations and prioritization are reviewed
and the draft is taken to the local council executive.
5: Draft budget finalized The executive meets to consider the draft budget as
(June) well as comments from the previous stage. He or she
makes final changes and approves the final draft.
Citizens may obtain copies of the final budget from
the council, but their input at this stage is rarely
considered.
6: Council hearing held The chief executive, through the secretary for finance,
(by June15) tables the budget and seeks council approval.
7: Budget implemented and The chief executive, cabinet, standing committees,
monitored and heads of departments develop detailed
implementation plans and performance reports.
Monitoring is done by council officials, councillors,
and civil society representatives.

Source: Adapted from Kundishora 2004d.

cycle in Gweru City, which includes both formal and informal approaches
(see table 6.6).

Sub-Saharan Africa's Experience with Participatory Budgeting 211

T A B L E 6 . 5 Budget Process in Kabwe, Zambia

Stage Activity

1: Consultation with Consultation with residents through residents development
residents committees. Field teams, consisting of representa-
tives of the four departmental heads, meet with
residents to solicit suggestions, ideas, and opinions
and learn of problems and needs. Residents
development committees, with the assistance of field
teams, list and prioritize their needs and draw up
annual work plans based on an agreed set of priori-
ties. The field teams then prepare their annual
departmental budget estimates and submit them to
the council.
2: Preparation of Departmental budgets are prepared and consolidated.
departmental budgets Each departmental budget estimate should be able to
fund priority activities for the coming year.
3: Consolidation of Departmental budget estimates are submitted to
the budget standing committees for debate and necessary
changes. The finance department then consolidates
the departmental budgets into the council's annual
budget.
4: Submission of the The director of finance submits the proposed annual
budget to the council budget to the council for adoption. During this meeting
for adoption councillors and other interested parties, including
department heads, can bring in more project proposals
and resident needs, which may be incorporated into
the budget if they are deemed important and resources
are available.
5: Final approval Once the full council meeting approves the consolidated
annual budget, it is submitted to the Ministry of Local
Government and Housing for final approval.
6: Budget The budget is implemented, and prioritized projects are
implementation monitored and evaluated.

Source: Adapted from Mumvuma 2004.

Stakeholder participation occurs informally at three stages in the
process. First, citizens are involved in identifying needs and priorities, which
feed into the strategic development plan. Second, consultations with stake-
holders are held to discuss the implications of their input on the budget and
to vote on the preferred scenarios. Third, citizens are involved in monitor-
ing and evaluating implementation of the budget.

212 Adrienne Shall

T A B L E 6 . 6 Budget Process in Gweru, Zimbabwe

Stage Formal activity Informal participation

1: Identification Five-year strategic Stakeholders review
of needs and development plan with guidelines with SNG
priorities annual priorities used to and agree on impacts
determine and adjust year's to be incorporated
priorities. into SNG budget.
National guidelines received
and incorporated into local
budget.
Executive committee issues
budget guidelines for Coun-
cil adoption.
2: Costing and Manpower committee
determination of negotiates with labor
global funding unions on level of wages
requirements and salaries.
Finance committee meetings Broad stakeholder
held to determine global committee delegates
funding requirements and detailed budgeting to a
set level of charges as well stakeholder budget
as capital programs and committee it elects.
their financing. Committee works
closely with treasurer
and finance committee.
3: Budget Council meeting adopts
finalization recommendations of
finance committee, adver-
tises budget in two issues of
the newspaper in order to
allow for public objections.
Council considers objections
before finalizing budget.
Budget sent to Ministry of
Local Government for
approval of high-density
area charges (poor areas).
4: Budget Budget is implemented, Councillors hold regular
implementation monitored, and evaluated. ward meetings to
consult on budget
with stakeholder
budget committee.

Source: Adapted from Mika 2004.
Note: SNG = subnational government.

Sub-Saharan Africa's Experience with Participatory Budgeting 213

The Impact of Participation

Participation in budgetary processes is still relatively new in most of the
countries reviewed here. Already, however, it has increased the number of
projects that directly benefit communities and correspond to the priorities
identified through the participation process. Relationships between citizens
and local authorities have improved, and citizens have a more positive atti-
tude toward and better understanding of the local authority.

Kenya

Citizens have participated in the budget process in Nairobi since 2003. The
result has been a large increase in the number of projects suggested and
implemented. Project ideas originate with residents, based on their per-
ceived needs. As a result of resident involvement, there is a strong sense of
ownership. Through improved dialogue, good rapport has developed
between the council and residents, which did not exist in the past. The Local
Authority Service Delivery Action Plan process provides a good opportunity
for meaningful dialogue and the identification of service delivery activities
that respond directly to the needs of local residents. Of 154 projects identi-
fied in 2002/03, 106 were shortlisted for funding and implementation.
Council staff have also made themselves more accessible to all stakeholders.

Mozambique

Civic participation is still in its infancy in Mozambique. However, in both
Manhica and Dondo municipalities, interaction between the local authority
and civic groups has increased and relations have improved.The local author-
ities have a better idea of the composition of society. Community members
now participate jointly with the local authority in planning, programming,
implementing, and monitoring and evaluating local projects. In Manhica a
multistakeholder management committee was established in 2000 that raises
funds and deals with a local flooding problem. Civic awareness meetings were
held in 29 bairros,resulting in cleaning and reconstruction campaigns and the
building of two boats to overcome flooding problems. Village committees in
Dondo are active in local economic development, with local women main-
taining community facilities such as water pumps and refuse removal.

South Africa

In Mangaung municipality the use of community-based planning in ward
committees has seen the focus of budget funding shift from infrastructure
development to local economic development, a higher priority for citizens.

214 Adrienne Shall

The community also perceives the municipality as being more transparent.
More people are informed about what is happening in the municipality and
can now demand accountability by regularly asking questions regarding
issues raised at meetings. There is constant participation through the ward
committees, which provide the municipality with regular feedback and
input. Submissions received from the budget conference on various budget-
ary issues are seriously considered and taken into account when finalizing
the budget.
In Ekurhuleni municipality the major impact from the participation
process has been a change in funding priorities rather than an increase in
spending. Through the participation process, the municipality has taken a
closer look at the lives of pensioners and increased the concessions given to
them. There has also been an influence on the indigent policy and the allo-
cation to free basic services. Policies have been modified in ways that bene-
fit the poor, and budget allocations to free basic services have increased.

Tanzania

Civic participation has had a positive impact on the structure and effective-
ness of budget and development plans in Tanzania. Staff of the Singida Dis-
trict Council solicited community participation in preparing and approving
village budgets for 2004/05. The logical framework approach was applied to
medium-term plans and budgets in four villages for the rehabilitation of the
water scheme, the rehabilitation and construction of shallow wells, and the
construction of a cattle dam.3 The Ilala Municipal Council now directly
involves citizens in meetings to discuss and prioritize community problems
and propose projects for budgetary resource allocation. In both councils the
number of projects implemented jointly by the council and communities has
increased. Participation has fostered a more positive attitude among citizens,
resulting in greater acceptability of cost-sharing,user charges,and other cost-
recovery mechanisms. The effectiveness of budgets and development plans
in addressing community concerns has improved. Equity and transparency
in the allocation of resources across communities have increased, especially
with regard to resources allocated to the previously neglected inner city and
periphery. Relations between the council and citizens have improved, as has
the ability to analyze and prioritize problems and issues. The level of com-
munity involvement in designing, executing, and monitoring and evaluating
projects has increased. Official recognition of private and public contribu-
tions from the center to community projects, which are now incorporated
into plans and budgets, has encouraged nonpublic contributions and given
hope to citizens for improved service delivery.

Sub-Saharan Africa's Experience with Participatory Budgeting 215

Uganda

Through the participatory process, citizens in Entebbe municipality are now
involved in drafting the city's three-year strategic plan, which guides develop-
ment activities in the municipality. An attempt has been made to establish a
good working relationship between councillors, officials, and citizens. The
council has a list of all registered civic organizations and invites at least some
of their leaders to attend its meetings.
Civic organizations and NGOs in Soroti municipality have a positive
attitude toward attending council meetings, where they present the priori-
ties and interests of the community. Through the participatory process, a
network of NGOs and civic groups has been formed to ensure that the inter-
ests of citizens are articulated before the council. Civic groups have learned
and internalized the procedures of the council in preparing the budget. The
resource base of the municipality has increased as people who previously
refused to pay taxes now do so, because they have a better understanding of
the use to which council resources are put.

Zambia

Thirty-six residents development committees have been established in
Kabwe municipality. Three health centers have been established, and piped
water has been provided for two of the centers. New markets have been con-
structed and improvements made to existing markets.
To ensure that cross-cutting issues are mainstreamed in community
projects, members of residents development committees have been trained
to deal with problems of HIV/AIDS, gender mainstreaming, the environ-
ment, and infrastructure maintenance. District officials, residents develop-
ment committees, and neighborhood committees formed a task force to deal
with these issues. As a result, funding was allocated to a home-based care
project in Chowa; a project for the care of terminally ill people with
HIV/AIDS; expansion of the Ngungu health center, which cares for the
chronically ill; and expansion of a school, the clearing of its storm drains,
and the planting of trees around the school.

Zimbabwe

Civic participation in the Mutoko Rural District Council has given residents
there a new sense of belonging and ownership. Linkages have been strength-
ened between the local authority and stakeholders, and cooperation between
government departments, traditional leaders, and civic society organiza-
tions has increased. A common and shared vision has developed to guide
future community development and annual budgets.

216 Adrienne Shall

The result has been less conflict and more eagerness to use dialogue to
solve differences. Marches have not occurred protesting local budgets (as
they did in the past), suggesting that citizens now accept and feel ownership
of funding. This has allowed speedier approval of the budget and more
timely implementation. Citizens have a better appreciation of what the
council does and how services are costed. As a result, they are more willing
to pay for services.
In Gweru participatory processes have resulted in a more simplified
budget format that is easier for citizens to understand. Citizens have been
involved in developing a strategic plan that shapes the city's future and
guides the budget process. There is also an increased sense of ownership and
belonging regarding the budget process and a reduction in suspicions of
abuse of funds and lack of transparency. As citizens are more involved,
budgets are produced more quickly and implemented on time.

Challenges and Lessons Learned

Participatory budgeting has already met with successes in Africa, but chal-
lenges remain. Important lessons have been learned as subnational govern-
ments try to deal with these challenges.

Challenges

Many of the countries reviewed face similar challenges, including a lack of
capacity, a limited understanding of the roles and responsibilities of all
actors, the limited scope of participation, legislative constraints, inadequate
monitoring and evaluation systems, a lack of transparency and trust, a
breakdown in communication, insufficient resources, and political and
social differences. Not all the countries reviewed have experienced all of
these challenges, but many are common to all.
Every country reviewed cited the lack of capacity of councillors, munici-
pal officials, and citizens as the most serious impediment to civic participa-
tion in planning and budgetary processes. Citizens are often not aware of
their right to participate, and they lack an understanding and awareness of
policy-making and budgetary processes. The low level of literacy hampers
participation. Citizens with very low levels of education tend to participate
less, because they lack access to information and do not understand munici-
pal procedures. As a result, the budget-making process involves mainly the
elite. The language used in discussing policy and budgets is often technical
and introduces unfamiliar concepts. The discussion is therefore beyond

Sub-Saharan Africa's Experience with Participatory Budgeting 217

the comprehension of both councillors and the people they represent. This
means that residents and councillors are often excluded from participating
effectively in the policy and budgetary decision-making processes. In some
countries, residents in a given area may speak different languages, making it
difficult for them to fully participate in discussions.
Some councillors, especially those from rural areas, have not had ade-
quate training and are therefore unable to impart the relevant information
and inform their constituents on council activities. This makes it difficulty
for them to articulate the problems and needs of their constituencies during
council debates. Municipal officials themselves may lack the necessary tech-
nical capacity.
In most of the countries under review, the roles and responsibilities of
the different actors were not clearly understood. This resulted in certain
actors assuming responsibilities that were inappropriate. In particular, the
distinction between the roles of officials and the roles of councillors was not
always clearly defined. In some instances, officials made decisions that
should have been made by the political body. In doing so, they manipulated
the budgeting and planning processes, using councillors as rubber stamps.
Some countries also experienced misunderstandings over state departments'
role in the budgeting process.
In some countries citizens participate in decision making only with
regard to the capital budget, which represents a small part of the entire
budget. They are not included in discussions of revenue sources or the
setting of rates and tariffs.
The monitoring and evaluation of projects is weak, and the process does
not involve citizen participation. Improving the monitoring and evaluation
process would enhance the accountability of councillors and the adminis-
tration to the community.
In Mozambique, Uganda, Zambia, and Zimbabwe, legislative con-
straints limit civic participation. There are no specific provisions for direct
public participation in decision making at the municipal level. Instead, it is
assumed that participation will happen indirectly.
Civic participation is also hampered by a lack of transparency in the use
of public funds. In Uganda, for example, provisions in the law ensure trans-
parent and accountable use of financial resources at the local level, but many
of these provisions have not been acted on because of lack of capacity.
Subnational governments lack the capacity to prepare the necessary books
of accounts and enforce strict financial discipline; central government insti-
tutions lack the capacity to follow up on audit recommendations in a timely
and comprehensive manner.

218 Adrienne Shall

In Zambia fiscal transfers from the central government are unpre-
dictable. Councils do not have information about funding policies, the
amounts available for distribution from various sources, the criteria or for-
mula adopted in disbursing grants, or the reasons for delays in releasing
funds. This uncertainty makes it difficult if not impossible to plan for and
use resources effectively.
Lack of resources, both financial and physical, has had a negative impact
on citizen participation. In some instances, dependence on donor funding to
run participatory processes makes the participation process tenuous.The large
size of the population in some towns and cities puts pressure on the resources
available for participatory activities,as more meetings need to be held and more
people require transport.In rural areas,where large distances must be covered,
the council has to pay transport and subsistence costs in order to make it
possible for citizens to attend meetings and participate in decision making.
Councillors often lack institutional and resource bases to meaningfully
consult with the people they represent. They lack the physical infrastructure,
such as information management systems, as well as the human resource
capacity necessary for encouraging participation among their constituencies.
Participation is still viewed with suspicion in some of the countries under
review,sometimes with reason.Some councillors have ignored what has come
up through the participatory process, instead putting forward issues that suit
them. Issues raised by individuals or groups have sometimes been lost in the
communication process from village to ward to municipal council.
In Uganda the relationship between the council and citizens has
improved greatly, but suspicion between the two still exists. Invitation let-
ters are reportedly sent to some civic groups after meetings have been held.
Some councils still deliberately exclude civic groups from council meetings.
In Zambia even where citizens are aware of their right to attend council
meetings and are informed about the schedules of these meetings, most will
not attend, mainly because they have lost confidence in local authorities. In
Zimbabwe elected officials view civic groups with suspicion.
In all the countries reviewed,ineffective communication between the sub-
national government and citizens has a negative impact on civic participation.
In South Africa communication among councillors, ward committees, and
departments within the administration is not as good as it should be. There
is also a lack of communication between the representatives of organizations
who attend the major stakeholder meetings and their constituencies. Mem-
bers of the community often complain that their representatives do not
provide feedback from the meetings they attend. In Uganda logistical
and financial limitations hamper council efforts to inform citizens about

Sub-Saharan Africa's Experience with Participatory Budgeting 219

procedures and policies. Most poor people also lack resources to buy news-
papers and radios, which provide information about council procedures.
In many countries the budgetary participation process does not start
early enough, limiting the amount of time available for consultation. In
some cases people feel that meetings are merely informational rather than
participatory. Often these meetings are held at times when people are at
work or at venues that require them to travel long distances.
Political and social differences also affect participation.Political differences
in Tanzania diminished the solidarity and cohesiveness of communities,
reducing the level of participation in planning and budgeting or stalling the
process in affected areas. In the Kabwe Municipal Council in Zambia, inclu-
sion of political appointees in the form of a deputy minister and permanent
secretary in the governance structure of the council reduced the level of civic
participation.Local stakeholders pull in different directions due to conflicting
instructions from the provincial political leadership on the one hand and the
principal officers of the council on the other hand.
In South Africa social and cultural differences between areas that were
once all white and areas that were once all black remain. The participation
process must be able to meet the needs of the diverse communities that
municipalities in SouthAfrica serve.In Zimbabwe populations in cities tend to
be more diverse. Reconciling different cultures poses tremendous challenges,
because different needs surface as priorities.

Lessons Learned

Important lessons have been learned in implementing participatory mecha-
nisms. The main lessons learned from the experiences of the countries
reviewed are described below.

Garner political will and create an appropriate legislative framework

Successful civic participation requires the political will to engage with citizens:
in countries in which participatory processes have been successful, political
support for civic involvement has been consistent. Such support creates an
atmosphere of trust and allows citizens to feel that they are playing a role in
determining how local government structures spend their resources and
how such spending will affect their lives.
The constitution as well as all legislation relating to local government
should recognize autonomous local government and enshrine the value of
participation. Countries in which participatory budgeting has been successful
have put in place an institutional and regulatory environment that allows for

220 Adrienne Shall

local autonomy and direct participation of citizens in decision making that has
an impact on local communities.

Build the capacity of local actors

Extensive and continuous capacity building of councillors, officials, and
citizens is key to successful budgetary participation.In every country reviewed,
empowering communities with knowledge of the budget process and techni-
cal skills to analyze budgets enabled more direct participation. Capacity build-
ing increases understanding of the municipal planning and budget cycle and
how resource allocation occurs,allowing communities to provide more mean-
ingful input into the process. Experience shows that councillors and local offi-
cials who have received training are better able to engage with citizens and
encourage them to participate in planning and budgeting processes.
Continuing civic education and capacity building is a top priority in
dealing with the challenges of participatory budgeting. Communities that
have provided ongoing training workshops have seen significant improve-
ment in the quality and quantity of the input received by citizens. For exam-
ple, in Ilala municipality, Tanzania, where training was provided to all
stakeholders, the participatory budget became more realistic and priorities
were much more clearly identified.In Singida district municipality,Tanzania,
extensive and continuous awareness building and public education
improved the effectiveness of participation, allowing specific problems to be
addressed through the budget process.
Training of officials and councillors also improves interaction and
understanding among all actors. The training workshops should have a
strong practical component and cover issues such as the following:

Why do tradeoffs need to be made in using scarce resources to address
unlimited needs?
How do local authorities function?
What is the relationship between strategic planning and budgeting?
What is the difference between a capital and an operating budget? Is the pro-
portion of capital to current spending appropriate? Within current spend-
ing, is the proportion of salaries to maintenance spending appropriate?

Where communication between the local authority and citizens is an
issue, it is also important to include the development of a communication
strategy in any capacity-building program. It may also be useful to form
learning networks so that groups can learn from the experiences of others.
These networks could include local authorities within a country or local
authorities from different countries.

Sub-Saharan Africa's Experience with Participatory Budgeting 221

Ensure commitment by local authorities

Commitment by both elected and appointed officials of the local authority
is vital to the success of participatory practices. In countries in which both
councillors and officials are committed to involving all stakeholders in the
decision-making processes of the local authority (Mozambique, Tanzania,
and Uganda), citizen participation in municipal governance issues has been
enhanced and the participation process is more sustainable and meaning-
ful. Traditional leaders, as custodians of community values, also need to be
taken on board and factored into participatory processes.
Central government support for participatory approaches is also
necessary, as it lends legitimacy to the process. Its support is manifested in
legal provisions for participation, government policies, and facilita-tive
institutions.

Include all stakeholders and accommodate diversity

Careful identification of all key stakeholders to ensure broad-based repre-
sentation of all segments of society, including disadvantaged and vulnerable
groups, is essential in facilitating the participatory process. Countries that
have adopted a systematic approach that includes all sectors of the com-
munity have enhanced ownership of the process by the community. The
community must be part of driving the process if it is to be sustainable. In
order to accommodate diversity, it may be necessary to adopt different
strategies for the various groupings so that each may participate in the way
that is most appropriate.

Give citizens plenty of time to prepare

Consultation with civil society must occur well in advance of meetings, so
that citizens have the opportunity to discuss their needs and priorities.
Citizens need time to be able to provide meaningful input into the budget.
Citizens need to be notified of meetings well in advance, so that they
have plenty of time to make their travel plans. Meetings should be scheduled
at times that are convenient for people who work during the day.

Conclusions

In all the countries reviewed here, local government is recognized as a sphere
of government in its own right,with powers to manage its own fiscal revenues
and expenditures. Each country has legislation governing the local sphere.
Some have made civic participation mandatory,requiring local authorities to
cooperate with citizens and give them the opportunity to be part of decision-
making processes.

222 Adrienne Shall

Even in countries that have not legislated participatory processes, par-
ticipation is recognized as an important tool for improving service delivery
to communities. Countries have therefore put in place mechanisms to allow
for more inclusiveness in the planning and budgetary processes. These
mechanisms include ward committee structures, participatory planning
processes, public meetings, budget conferences, consultative sessions, budget
campaigns, monthly newsletters, a participatory poverty assessment project,
and various forms of media intervention.
In each country the budget preparation process includes a stage that
allows for civic participation in identifying needs and priorities. In some
cases participation occurs only at the beginning of the process; in others
citizens are given another opportunity to provide input regarding the
allocation of resources once the draft budget is finalized.
Citizens have opportunities to provide input, but in many instances
their input is limited and the allocation of resources is still determined
largely by local officials and councillors. In many cases citizens are not given
adequate time to analyze and discuss their input. Moreover, citizen input is
solicited only with regard to the capital budget, which represents only a small
proportion of the total budget.
Despite these problems, civic participation has increased the number
and range of projects implemented by local authorities that have a direct
impact on communities involved in the participation process. Participation
has also improved relations between citizens and local authorities, as citizens
feel that local authorities have become more transparent and trustworthy.

Notes

1. Subnational government, local government, local authority, and municipality are used
interchangeably in this chapter. All refer to governance at the local level.
2. Integrated Development Planning is the planning methodology that identifies
priorities and plans.
3. The logical framework approach is a management tool used mainly in the design,
monitoring, and evaluation of development projects.

References

Kundishora, P. 2004a. "Capacity Building Needs to Support Civic Participation in Sub-
national Budgeting in Uganda."World Bank Institute, Washington, DC.
------. 2004b. "Civic Participation in Subnational Budgeting: The Case of Entebbe
Municipality, Uganda." World Bank Institute, Washington, DC.
------.2004c."Civic Participation in Subnational Budgeting: The Case of Soroti Munici-
pality, Uganda." World Bank Institute, Washington, DC.

Sub-Saharan Africa's Experience with Participatory Budgeting 223

------. 2004d. "Civic Participation in Subnational Budgeting: Ugandan National
Framework Condition." World Bank Institute, Washington, DC.
Lubuva, J. 2004a."Capacity Building Needs to Support Civic Participation in Subnational
Budgeting in Tanzania." World Bank Institute, Washington, DC.
------. 2004b."Civic Participation in Subnational Budgeting: The Case of Ilala Municipal
Council in Dar Es Salaam, Tanzania." World Bank Institute, Washington, DC.
------. 2004c. "Civic Participation in Subnational Budgeting: The Case of Singida
District Council, Tanzania." World Bank Institute, Washington, DC.
------. 2004d. "Civic Participation in Subnational Budgeting: Tanzanian National
Framework Condition." World Bank Institute, Washington, DC.
Mangaung Local Municipality. 2004. "Mangaung Budget Cycle 2004/05." Mangaung,
South Africa.
Mika, J. 2004. "Civic Participation in Subnational Budgeting: The Case of the City of
Gweru, Zimbabwe." World Bank Institute, Washington, DC.
Mumvuma, T. 2004. "Civic Participation in Subnational Budgeting: The Case of Kabwe
Municipality, Zambia." World Bank Institute, Washington, DC.
Shall, A. 2004. "Civic Participation in Subnational Budgeting in South Africa." World
Bank Institute, Washington, DC.
Wamwangi, K. 2004a. "Capacity Building Needs to Support Civic Participation in Sub-
national Budgeting in Kenya." World Bank Institute, Washington, DC.
------. 2004b."Civic Participation in Subnational Budgeting: Kenyan National Frame-
work Conditions." World Bank Institute, Washington, DC.
------. 2004c. "Civic Participation in Subnational Budgeting: The Nairobi Case Study,
Kenya." World Bank Institute, Washington, DC.

Participatory Budgeting in
the Middle East and
North Africa
a l t a f � l s c h e r

P articipatory budgeting does not occur in a vacuum: environ-
mental and design factors facilitate citizen engagement in public
affairs. This chapter discusses necessary and enabling factors that
help participatory mechanisms take root, assesses whether they are
present in the Middle East and North Africa, and examines whether
participatory mechanisms can catalyze or contribute to societal
changes in terms of governance, development, and democracy in
the region. It also explores whether participatory processes are
consistent with Islamic rules and values.

Potential for Participatory Budgeting

An extensive body of literature associates participatory budgeting
with good governance outcomes (McGee 2003; Reuben 2003;
Wampler 2000). Civic engagement in public affairs is seen as instru-
mental to state effectiveness. It also leads to better public decisions
by increasing vertical, or social, accountability. When citizens are
engaged in processes of planning, funding, delivering, and moni-
toring public goods and services, the incentives of public officials
and office holders change.

225

226 Alta F�lscher

In addition to improving state effectiveness, participatory approaches
promise two additional benefits that are relevant to the Middle East and
North Africa. First, institutions supporting wider citizen involvement are
instrumental to human development--the continuous expansion of human
capabilities,opportunities,and freedoms.Second,participation offers oppor-
tunities for meaningful participation, an end (or a human right) in itself.
Recent work by the United Nations Economic and Social Commission for
Western Asia (ESCWA) (Fawaz 2002),the World Bank (2003),and the United
Nations Development Programme (2005) has identified poor governance as
a significant contributing factor to poor growth and underdevelopment in
the Middle East and North Africa. Could partipatory processes help improve
governance in the region?
The political, governance, and social conditions in the region appear to
limit the scope for participatory budgeting initiatives. The 2004 Arab Human
Development Report (UNDP 2005, p. 9) notes that despite several recent
regional and country-specific reform initiatives, reforms have been
"embryonic and fragmentary."Although the gains are"undoubtedly real and
promising . . . they do not add up to a serious effort to dispel the prevailing
environment of oppression." The report identifies the prevalence of
autocratic regimes combined with traditionalism and tribalism as major
impediments to such political and civil liberties as the right to information,
participation, growth, and human development. Other reports, including
Abootalebi (1999),Al-Masmoudi (2004),Fawaz (2002),Gilbraith (1996),and
World Bank (2003), mirror these findings.

Citizen Budget Initiatives

State exercise of power in the region does not bode well for the successful
implementation of citizen budget initiatives. Autocratic rule combined
with restrictions on freedom of speech, media, and association and politi-
cal practices that pay little heed to principles of contestability, equality, and
accountability may impede the robust growth of such initiatives. A World
Bank review of governance and development in the region (World Bank
2003, p. 4) noted that"nepotism, tribal affinity, patronage, or money deter-
mines who gets public services and who does not."
Contestability and representivity are largely absent in the region. Even
when the formal system of government includes procedural democracy,
these features are lacking in the informal system. Instead, without the major-
ity of people behind them, most regimes have resorted to other sources of
legitimacy, including religion, tribal affiliation, and an emphasis on the

Participatory Budgeting in the Middle East and North Africa 227

authority of powerful elites--often family based--to rule (Abootalebi 1999,
2004; UNDP 2005; World Bank 2003). The survival of these regimes "has
become more dependent on control and propaganda; on marginalizing the
elites through scare-and-promise tactics,on striking bargains with dominant
global or regional powers; and on mutually supportive regional blocs"
(UNDP 2005, p. 16).
This lack of contestability in the political culture--a problematic
environment for citizen budget initiatives--manifests itself at many levels
in the formal system. Within the region, only Algeria, Egypt, the Palestinian
Authority, Sudan, and Yemen elect their president through direct elections
in which more than one candidate runs. Presidential term limits are not
imposed (UNDP 2005). While totally or partially elected parliaments now
exist in all countries in the region except Saudi Arabia and the United Arab
Emirates, political participation through parliamentary representation is
often little more than a ritual: parliaments are largely without power, and
elections have not taken power out of the hands of ruling elites (UNDP
2005). In fact, elections are often designed or executed to limit parliamen-
tary power. In Iran, for example, where the election of a reformist president
brought hope for further democratic reforms, reformist-minded candidates
were disqualified from standing for the February 2004 parliamentary elections,
leaving power in the hands of the ruling elite (Abootalebi 2004). According to
a World Bank report on governance in the region,"the independence of . . .
parliaments is generally limited, as is their constitutional or actual power to
hold the typically strong executive accountable"(2003, p. 46). In most coun-
tries in the region, parliaments lack oversight over the head of state and
cannot initiate or control legislation or the budget.
Several authors point to a long-term trend of democratization (Abootalebi
2004; Ibrahim 2004) that reflects both pressure from within countries in the
region and gradual social,economic,and political liberalization.There are also
significant signs of recent reform. In May 2004 an Arab summit issued a Dec-
laration on the Process of Reform and Modernization, calling for the contin-
uation and intensification of political, economic, social, and educational
change initiatives that reflect the will and aspirations of Arabs. It called for a
deepening of the foundations of democracy and consultation and a broad-
ening of participation in political life and decision making,in tandem with the
rule of law,equality among citizens,and freedom of expression (UNDP 2005).
The elections in Iraq and the Palestinian Authority, domestic political mobil-
ization in Lebanon, municipal elections in Saudi Arabia, and presidential
election reforms in Egypt are all recent indicators of a shift in response to
mounting internal pressure for more freedoms and increased democracy.

228 Alta F�lscher

Abootalebi (1999) does not view these changes as indicative of a funda-
mental move toward democracy by state or society. Greater space for and
growth of political parties may be signs of a minimum adjustment to pres-
sure from reformist groups rather than a genuine political groundshift.
He argues that political parties in the region play a largely ceremonial role
that serves to legitimate the state and its policies. "Although the formalities
of a democratic state are in place (for example, elections and debates), the
people remain politically and economically without much functional
power." The real basis of state power in Middle Eastern countries is largely
informal, not institutional, for it is personal, family, and group ties that help
sustain the executive power of the ruling elites.
This is not equally true for all countries in the region; the extent of the
ruling elites'autocratic power varies.Kuwait and the Persian Gulf sheikdoms,
alongwithOmanandSaudiArabia,arehighlyautocratic.Inothercountries,such
as Egypt, Lebanon, and Morocco, there are stronger grounds for arguing that a
shift in the balance of state-society relations in favor of society is occurring.
In some countries, the slow gains achieved in the 20th century were
rolled back in the aftermath of September 11,2001.Early in 2003,Arab interior
ministers agreed to an antiterrorism strategy that led to further restrictions
on personal freedoms. Unprecedented numbers of arrests have occurred,
according to UNDP (2005), and legal safeguards against mistreatment in
prisons, camps, and detention centers have been violated. Citizens in some
Arab countries live under threat of having their citizenship withdrawn on
the basis of administrative decisions by lower-level government officials.
Journalists, political activists, and human rights advocates often face prose-
cution or outright attack (UNDP 2005). Freedom of opinion and expression
is curtailed through official censorship.
Basic civil and political liberties, such as freedom of thought, peaceful
association, belief, and opinion, are guaranteed by national constitutions.
However, under the banner of national security, either the constitutions
themselves or lower-order legislation restricts these freedoms, particularly
freedom of association (UNDP 2005).Political parties are permitted in 14Arab
countries; they are banned in Libya and the Gulf states. However, in many
countries where constitutions allow the formation of political parties,
legislative restrictions limit this right (by, for example, requiring prior
authorization from committees with heavy government representation,
restricting party activities, or assigning the right to dissolve a party to the
state). Other examples of restrictions on the right to associate include pro-
visions prohibiting or restricting the right to strike, demonstrate, hold mass
gatherings, or assemble peacefully.

Participatory Budgeting in the Middle East and North Africa 229

Most countries in the region place restrictions on the formation of civil
society organizations (CSOs), whose activities are highly constrained
(exceptions are Lebanon and Morocco). In some countries, organizations
are dissolved if found to be too critical of the state. Most restrictions have
been directed against grassroots human rights organizations (UNDP 2005),
typically those calling for higher levels of participation and transparency
within a human rights framework.
Despite the barriers, organized civil society is not absent from the
region. There are many voluntary organizations, trade unions, human rights
groups, women's associations, minority rights groups, and various other
social movements (Gilbraith 1996). Despite constraints on the media, inde-
pendent views are heard from growing numbers of independent research
organizations and think tanks. However, across the region civil society
remains constrained by the state; in some countries it is totally oppressed or
co-opted. In Egypt, for example, where civil society is relatively free and
vibrant, a 1964 law requires that CSOs refrain from "political" activity and
empowers the state to replace the governing councils of CSOs if they do.
Ibrahim (2004) provides evidence of how think tanks in Egypt and
elsewhere have succeeded in broadening the political, social, and economic
reform agenda in the Arab world despite these constraints.1 He emphasizes
their ability to provide timely information and change the way in which
leaders and intellectuals conceive of politics and policy making. These
groups have been particularly successful in introducing a new "discourse
that is more concerned with gathering facts and research than just with
abstract concepts of ideology, law and philosophy. This new discourse is
largely in line with the policy and financial analysis provided by successful
budget (or public policy and finance) nongovernmental organizations else-
where in the world" (Ibrahim 2004, p. 5).
The Al-Ahram Centre for Political and Strategic Studies in Egypt was the
first Arab-state think tank to be established. It"opened the door for individu-
als and groups to create new foundations for promoting democracy, fighting
illiteracy and poverty,projecting civil society advancements,and empowering
women" (p. 1). Its establishment, supported by gradual economic, political,
and social liberalization, led to a boom in think tanks (box 7.1).
A major impediment to broad-based participation initiatives is the high
level of illiteracy throughout the region. The ability of CSOs to get "people
power" behind their analyses and the potential for direct participation in
decisions about resource allocation and use may be circumscribed by citi-
zens' capacity to engage with technical issues. About one-third of Arab men
and half of Arab women are illiterate. Although there have been significant

230 Alta F�lscher

B O X 7 . 1 Think Tanks in the Arab World

The first think tank in an Arab country was established in Cairo in 1967. The
Al-Ahram Center, which was linked to the government, was designed to pro-
vide Egypt and the rest of the Arab world with information about Israel. Today
the center is the largest and most influential research institution in Egypt,
focusing on international politics and the political, economic, and social
aspects of Arab and Egyptian society. The center disseminates its analysis
through an array of publications, including a strategic report, weekly articles,
and discussion papers. The development of the center served as a blueprint
that has since been duplicated by many other institutions in the country.
Egypt's Ibn Khaldun Centre can be viewed as the first truly independent
think tank. Founded in 1988, this center has a more directly public policy�
oriented agenda: it applies contemporary social science research methodolo-
gies to serve the developmental goals of Egypt and the Arab world. It was
founded with private resources. In June 2000 the Egyptian government closed
down the center, arresting its founder and 27 center associates. Since then the
center has reopened, and its founder has been released. The center publishes
and organizes seminars on a wide range of political and socioeconomic issues,
including religion and politics, history, civil society, and democratic transfor-
mation and development.
Egypt's first independent nonprofit economic-oriented research institute,
the Egyptian Centre for Economic Studies (ECES), was established in 1992. It
conducts economic research in support of an open market system and a larger
role for the private sector. The center was initially funded by Egypt's private
sector and the U.S. Agency for International Development (USAID), together
with other development partners. It conducts research on topics such as trade
liberalization, the role of the state, and deregulation.
Since its founding, several other think tanks have been established.
Ibrahim (2004) identifies two trends. First, think tanks make increasing use of
information and communication technology to disseminate their own infor-
mation. Some are virtual research centers only, with no brick and mortar
infrastructure. Second, many think tanks are affiliated with universities. Many
of the university-based centers are staffed with scholars who have studied
abroad. Cairo University and the American University in Cairo recruit talented
young scholars who use their expertise to develop Western-style research
centers. These trends are reflected elsewhere in the region.
Three constraints face think tanks. The first is their control by the state.
Regimes often frame think tank agendas or define the institutions from their
founding. In Egypt, Jordan, Lebanon, and Morocco, conditions are more hos-
pitable for establishing semi- or fully independent research centers, although
their agenda is still influenced by their relationship with the government.
Other countries, such as Libya, Syria, and many of the Gulf states, provide very
little opportunity for the creation of independent think tanks.

(Box continues on the following page.)

Participatory Budgeting in the Middle East and North Africa 231

The second challenge is the lack of financial and human resources. The
"overall weak state of the social sciences in the Arab world has hindered the
development of qualified indigenous researchers to staff the region's think
tanks" (Ibrahim 2004, p. 11). According to Ibrahim, just 5,000 Arab researchers
are working on social and political trends in the Middle East. This shortage is
exacerbated by a severe lack of funding; most funding for CSOs in the region
goes to radical organizations. The largest financial support come from Western
(or Northern) development partners.
The third challenge is the lack of credibility. Liberal-oriented think tanks
face enormous difficulties in translating their messages in such a way that
the wider--often illiterate--public can connect to them. Think tanks are
often discredited for their "foreign style, outside connections and lack of
authenticity" (Ibrahim 2004, p. 12).
Despite these limitations and challenges, Ibrahim points to the success of
think tanks in introducing new ideas into public debates and introducing new,
more rational, forms of research on policy issues. He cautions against overem-
phasizing the role of Arab civil society as a force for change, however: the role
of traditional forces and the dismissal of independent think tanks as puppets
of the West, together with the co-opting of other institutions by power struc-
tures, hamper their capacity to take this role forward.

Source: Ibrahim 2004.

recent gains in access to education across the region, the quality of educa-
tion remains low (UNDP 2005).
Low literacy levels in themselves do not necessarily impede participation.
The peasant- and worker-based initiatives of the Development Initiative for
Social and Human Action (DISHA) and Mazdoor Kisan Shakti Sangathan in
India illustrate how ordinary and often illiterate citizens make significant
contributions to public resource management once public budgets and
public service delivery are made relevant to their lives (see chapter 5 in this
volume).However,in both cases,as in almost all initiatives in Eastern Europe
(see chapter 4 in this volume), popular citizen participation in the programs
was predicated on educating citizens about their rights. These activities have
occurred in environments in which threats against rights-based activities and
activists did not exist or were far less pronounced than they are in the Middle
East and North Africa, however.
Low levels of knowledge about citizen-state relationships also impede
active participation by citizens. Like citizens in Eastern Europe, citizens in
this region perceive themselves as passive recipients of government services,

232 Alta F�lscher

as fortunate beneficiaries of resources that belong to the state. The large
contribution of oil revenues to public coffers and the relatively low levels
of taxation contribute to this perception. Citizens are unlikely to perceive
themselves as clients of government or as the principal holders of power
in the relationship.
Citizens' lack of knowledge of their rights and their perception of the
state as all powerful may limit the likelihood that participatory budgeting
will take root in the Middle East and North Africa in the short to medium
term. Given the political, social, and cultural norms in the region, more
limited forms of citizen participation--by think tanks, for example--may
be more plausible. Of course, this type of participation would be open to the
criticism that participation continues to involve the elite rather than a
broader group of citizens. Such a criticism is particularly relevant in this
region, where poverty levels in some countries are high despite high per
capita income rates and women and minority groups are excluded from
political processes.
Even initiatives aimed at influencing the intellectual and policy-making
elite remain dependent on a free media to disseminate their findings.
According to the World Bank governance study (2003), countries in the
region have "limited and reluctant" transparency. In no country is the right
to information guaranteed. In Egypt, despite a vibrant civil society, the
budget is not published outside of parliament, limiting public discussion of
it. In contrast, in Iran the national budget is published and parliamentary
debates are televised. In Algeria, Iran, and Lebanon the media participate in
public debates on government.
Kadhim (2004) believes that traditional or nontraditional social forces
block transparency. There is a "deliberate absence of knowledge and an
attempt to intervene in the details of knowledge."The lack of access to infor-
mation and communication technology is the most obvious example. It
"stems from a fear of the spread of knowledge and of the raising of aware-
ness" (Kadhim, 2004, p. 1). Regulations in 11 countries in the region allow
ex ante or ex post (after printing) censorship of the press, severely truncating
press freedom. Laws are also in place that require publishers to have a license,
leaving the media under constant threat and leading to self-censorship. Only
five countries--Algeria, Egypt, Jordan, Sudan, and Yemen--ensure jour-
nalists the legal right to obtain information (UNDP 2005).
Despite these restrictions,media freedom has made its appearance in the
Arab world through satellite television and the Internet. Governments still
impose their control on written media (books, textbooks, newspapers, and
magazines), however (Al-Masmoudi 2004). In some countries--notably

Participatory Budgeting in the Middle East and North Africa 233

Algeria, Egypt, Lebanon, and Morocco--journalists have freedom on paper.
However, "even in these countries, the media know that there are `red lines'
that they cannot cross" (p. 3). In particular, they cannot explore corruption,
transparency, nepotism, or favoritism.
The overall picture of an enabling environment for civil society budget
initiatives in the region is mixed, but on balance it is not encouraging.
On the positive side, there are signs that societies in the region are under-
going systemic change--albeit uneven and halting--toward an underlying
political culture that is more conducive to participation. This change often
triggers backlashes that close down political space for participation. The
outcome of this process is thus not at all certain.

Participation in Resource Decisions

Many countries in the region have committed themselves to decentralizing
power and empowering local authorities. Some have also put on the agenda
partnerships with CSOs and the private sector at the local level as a means
of empowering local governance. In Iran, Jordan, Lebanon, and Syria, local
elections have taken place, local authority legislation has been reviewed, or
new regulations have been adopted. In some cases central governments have
also invested in strengthening local government capacity, in terms of both
human resources and technical systems. These steps have not been accom-
panied by the devolution of real decision-making power, however, or the
decentralization of resources. According to Fawaz (2002, p. 3), Arab states
are going through a "mixed de-concentration/delegation process in which
most administrative, financial and political decisions still happen at the top."
Overall, while responsibilities have often been shifted downward, the shift
has not been accompanied by the necessary changes in power. This has
caused municipalities to be overwhelmed by their daily responsibilities with-
out the necessary capacity or resources to act on them (Fawaz 2002).
Fawaz (2002) is skeptical that local governments will be able to change
the underlying power structures prevalent in many of the countries. She
notes that municipal boards of elected local governments have rallied
constituencies largely on a sectarian, tribal, regional, or religious basis, and
they have depended on their political and social networks to survive. The
ability of local authorities to enable better representation, participation,
and empowerment is therefore contentious. The World Bank governance
study (2003) contends that local elections have improved local governance
and created a proving ground for future national political leaders, but it
concedes that power in the region is still highly centralized, not only toward

234 Alta F�lscher

the central level of government but also within the executive. This weakens
checks and balances and limits the opportunities for participation.
Sarrouh (2003) identifies the "militarization of administrative func-
tions" at the local level (the appointment of former military personnel
to decision-making and leadership positions) as a challenge to effective local
government. This practice deters public participation, delegation of
authorities to local actors, and responsiveness to local needs. Resistance to
change or devolution of powers is a serious challenge. Without the support
of top leadership and the involvement of elected members, reforms will
not occur.
Inequality between individuals and groups is great in the Middle East
and North Africa. Given that trust seems to act as an enabler of meaningful
and broad-based direct participation in decision making, this is likely to act
as a silent barrier to such participation. Experience elsewhere where deep
divisions exist--in Bangladesh, for example, where women's issues remained
excluded from a community-driven development program despite specific
design interventions--shows that an uneven distribution of power is very
difficult to overcome.
Alvi (2005) draws attention to the urgency of addressing the barriers
faced by women, particularly given trends of "regressive social transforma-
tion." She notes two reinforcing factors that contribute to these trends. The
first is the strengthening of attitudes and social policies in some countries
that deny women their fundamental rights and freedoms. The second is
weaker social indicators--such as educational level and social status--which
make it difficult for women to challenge these attitudes. If local governments
are not operating on principles of inclusivity and equality, it is unlikely
that mechanisms allowing direct participation by citizens will overcome the
governance gap affecting women.
Despite these challenges, some communities have participated success-
fully in decision-making processes that have had a real impact on their lives.
Fawaz (2002) points out that local government initiatives often succeed in
states that are in or have recently emerged from conflict, citing several
examples that are included in the UN-Habitat good practice database.
According to her, the weakening of the central state that occurs in these
conditions allows space for local governments to assume their mandates.
Participation has also occurred in states where the balance of power has
shifted away from totalitarian regimes toward society. External funders have
played an important role in some countries in the region, as they have in
Eastern Europe (see chapter 4).

Participatory Budgeting in the Middle East and North Africa 235

Rehabilitating and upgrading the Manshiet Nasser informal
settlement in Cairo

In 1997 more than 500,000 inhabitants of an informal settlement in Cairo,
Egypt, were relocated to a nearby planned settlement equipped with all serv-
ices (UN-Habitat 2001). The new settlement is equipped with piped water
and sanitation, a road network, open space, training and health care centers,
libraries, schools, telecommunications, and artisan workshops. In short, it
has the infrastructure to be a human settlement rather than a housing project.
The site of the old slum was redeveloped and renewed.
Infrastructure is necessary but not sufficient for turning housing projects
into human settlements. The participation of those affected is required, too.
The project was therefore based on a participatory socioeconomic survey
and supported by mechanisms of transparent dialogue. The poor were
provided with affordable housing options, financed by soft loans to the
inhabitants of the new housing units. The project empowered civic engage-
ment at the early stages of decision making, reducing the scope for conflict
and aiding the mobilization of citizens' own resources for effective imple-
mentation. The success of this project suggests that coordination among
government agencies, CSOs, and development partners, though challenging,
is necessary for effective and sustainable urban development.

Effecting change through quartier associations in Tunisia

Quartier (neighborhood) associations and committees--local nongovern-
mental groups that can mobilize the population in support of particular
issues, such as combating environmental degradation--are a relatively new
feature of decentralization in Tunisia (Ben Salem and Vengroff 1992). The
associations operate at the lowest level of government, that of the municipal
councils. These unelected councils are charged with certain key functions,
mainly in the area of service delivery, especially at the municipal level. They
also levy and collect a variety of local taxes. The mayor (the president of
the council) is selected by members of the council from among themselves.
Decision making in the municipal councils is relatively open. Committee
hearings and council meetings are open to the public. The potential for
access by nongovernmental organizations (NGOs) and association groups
is relatively high. The quartier associations are especially important in
this regard.
A typical quartier association is structured around a 10-member bureau,
which has a diverse, highly motivated, and potentially very powerful set of

236 Alta F�lscher

members. The leaders are relatively mature in age and are drawn from the
upper economic class of society.Their function is similar to that of local inter-
est groups that build and create alliances with other groups, such as the local
mosque, political party cells, local officials, and environmental groups. Mem-
bers also use their connections at the central level to gain some advantages. In
some cases, quartiers mobilize modest amounts of resources to support local
projects and engage in neighborhood clean-up and self-help programs.
The quartiers concentrate mainly on environmental and community
issues. Their status as local and community-based organizations is key for
attracting popular support and participation. If these groups prove to be
successful, it is likely that their impact will expand to the municipal, regional,
and even central levels. Despite limitations, the quartier associations increase
opportunities for citizens to provide input into policy-making processes at
the municipal and regional levels.

Rehabilitating a neighborhood in Baghdad

The Neighborhood Rehabilitation Project was initiated in 1999 in response to
the appalling living conditions of families in areas where public services had
collapsed, leading to sewage overflows, disruption of health services, inade-
quate garbage collection, and scarcity of drinking water (UN-Habitat 2006a).
The project was implemented with the participation of the beneficiary low-
income families. For the first time in Iraq, a community-based approach to
public management was used to ensure that the services would be sustainable.
The project was first piloted in two neighborhoods and then extended in 2000
to two more areas. It was implemented by UN-Habitat, in partnership with
the municipality of Baghdad, NGOs, and other UN agencies. In 2002 the
project was selected as an example of best practice by the Dubai International
Awards for Best Practices in Improving the Environment. The lessons from
this program are being applied in the postwar UN-Habitat Urban Develop-
ment and Housing Programme, where large-scale rehabilitation of urban
areas is being undertaken with a commitment to participation.

Reducing urban poverty in Lebanon

In 1998 the city of Ghobeiri,Lebanon (population 200,000),held its first local
elections in 35 years (UN-Habitat 2006b). Most of the elected council mem-
bers had backgrounds in the private or nonprofit sector.Managing the city was
subsequently undertaken through partnership with all actors--citizen groups,
NGOs, the private sector, the central government, and international agencies.
The Ghobeiri municipal council coordinates directly with 16 social
NGOs and community-based organizations and indirectly with another 10.

Participatory Budgeting in the Middle East and North Africa 237

The city has connected 18,000 households to the sewerage system, put up
lights and signs on all city streets, and planted more than 4,000 trees. It has
expanded a social service network, offering vocational training to more than
100 children and social assistance to more than 30,000 orphans, widows,
people with disabilities, and other vulnerable groups through local NGOs.
It also offers literacy and skill training to vulnerable women. The munici-
pality receives support from the United Nations Development Programme's
LIFE (Local Initiative Facility for Urban Environment) Programme and
from UNICEF.

Participatory Budgeting as an Entry Point for Better Governance

Citizens' ability and willingness to engage with the state are predicated on a
number of factors, including knowledge and capacity, freedom from fear of
prosecution, political space for open debate on public decisions, and the
ability to access a free media. Most of these factors are largely absent in the
region. However, one of the hopes for participatory budgeting initiatives is
that with careful design and targeted support, the initiatives would be able
to start the process of effecting positive change in the political and gover-
nance environment, particularly by whetting citizens' appetite for con-
testable government and positive, empowered engagement with the state.
Even successful initiatives face a challenge overcoming the systemic
barriers identified and supporting a regional shift toward better governance.
Participatory processes will be able to do so only if the underlying social,
cultural, and religious norms in the region are compatible with notions of
representivity, consultation, and democracy. There should be acceptance
of the idea that political and civil rights, including participation, are not
contingent on social and cultural norms but are something that any person
should be able to recognize as his or her own. If either of these situations is
the case,tailored participatory budgeting initiatives should be able to develop
and grow in principle.

Democracy and Islamic Rules and Values

Are notions of democracy compatible with Muslim norms?2 According to
Al-Masmoudi, president of the Center of the Study of Islam and Democracy
in Washington, D.C., the sharia is designed to protect the individual and soci-
ety (Al-Masmoudi 2004).A well-established process known as ijtihad is used
to deal with changing needs of Muslim societies over time.3 For example,
in 2000 the Council of Muslim Clerics in Europe and the United States

238 Alta F�lscher

issued a fatwa (religious ruling) permitting Muslims residing in the West to
purchase homes by taking out mortgages and paying interest. This practice
clearly contradicts the Koran's prohibition on interest. Ijtihad "allowed
Muslims and Muslim societies to adapt and evolve with changing circum-
stances and new discoveries"(Al Masmoudi 2004,p.8).Al-Masmoudi (2004),
Abootalebi (2004), and others argue that current regimes and funda-
mentalist movements force a choice between Islam and modernity or
between Islam and democracy but that no choice actually needs to be made;
many principles in Islam, including freedom, equality, and justice, are com-
patible with the values that drive democracy.
One such value is that of al-shura, or consultation. According to
Al Ansari (2004), in many modern Muslim states this principle has been
reduced to a narrow, traditional notion that consultation is good for the
ruler if he wishes to adopt it but that otherwise he is free to do as he pleases.
This notion contributed to the formation in many Muslim countries of
consultative councils without full legislative and supervisory authority over
the head of state. Al Ansari argues that Qatar's constitution and Oman's
experience point toward political developments in the Gulf countries that
are challenging the narrow interpretation. The Islamic notion of consulta-
tion is synonymous with democracy in many aspects, including the right of
people to govern themselves and the right of individuals to select represen-
tatives. The only point of difference "lies in the extent of society's authority
to legislate" (Al Ansari 2004, p. 3). Democracy grants society extensive
power. The Islamic understanding of consultation, by contrast, "confines
society's authority to legislate within the fixed teachings of the Qu'ran and
the Sunna"(Al Ansari 2004, p. 3).4
Are individual citizens in Muslim countries in the region likely to
respond to the idea that as citizens they have the right to elect their repre-
sentatives and hold them to account for their use of public resources? The
Arab Human Development Report (UNDP 2005) asserts that the failure of
democracy in several countries in the region is not cultural in origin."It lies
in the convergence of political, social and economic structures that have
suppressed or eliminated organized social and political actors capable of
turning the crisis of authoritarian and totalitarian regimes to their advan-
tage" (UNDP 2005, p. 11). Abootalebi (2004) raises similar arguments with
respect to Iran, where the regime deliberately confuses the issue of secular-
ization with popular sovereignty and political democracy by tagging
reformists as threats to the survival of Islamic religious values.
Two attitudinal surveys conducted in the region suggest that citizens
value governance, democracy, and certain freedoms. The first, conducted in

Participatory Budgeting in the Middle East and North Africa 239

five countries in late 2003 for the Arab Human Development Report, found
that freedom from foreign occupation, freedom of thought and expression,
independent media, and freedom of movement are critical to respondents.
Some 89 percent believed that their choice of central and local government
leaders through free and fair elections was critical for good governance.
A second survey, the WorldValues Survey (conducted between 2000 and
2002), found that respondents in Arab countries topped the list of those
agreeing that democracy is better than any other form of governance.A high
percentage of respondents also rejected authoritarian rule, defined as rule
by a strong ruler who disregards parliament or elections (Pettersson 2003).
Some citizen groups advocating human rights and political freedom in
the region have been successful in bringing about change. Human rights
and political organizations in Morocco persuaded the government to
acknowledge violations of human rights and to pass a new family law that
met the demands of the women's movement to safeguard women's rights.
CSOs in Syria asked for the state of emergency to be lifted and freedoms
expanded. In Saudi Arabia documents and petitions on minority rights,
religious freedom, civil rights, equality, and political openness were submit-
ted to the crown prince. One petition went as far as to call for constitutional
reform, including guaranteeing fundamental political freedoms and demo-
cratic reforms,including elections and popular control through representative
institutions of public funds (UNDP 2005).
Religious debate and political dialogue in the region are promising for
improving governance and development outcomes in the long run.
Abootalebi (2004) argues, however, that democratic elections in the region
will not succeed without addressing the underlying problem of uneven dis-
tribution of socioeconomic and political resources. Meaningfully engaging
with issues of public resources allocations could be valuable in initiating
such a redistribution of resources. However, countries in the region will not
easily--and,as Fawaz (2002) argues,perhaps should not--adopt governance
systems and mechanisms that parrot models from the secular world.
None of the factors identified in this chapter as critical to participatory
processes--enabling political systems, including mature political parties;
fundamental freedoms; civil society capacity; citizen knowledge and capa-
city; enabling legal frameworks; local government capacity; availability of
information--is present in the Middle East and North Africa. Given the
political and sociocultural environment in the region, citizen budgeting
initiatives are unlikely to succeed, unless they are launched in locales where
the leadership is open to citizen input or the initiative is supported by external
development partner funding.

240 Alta F�lscher

Notes

1. Israel has the largest number of think tanks and think-tank activities in the region,
followed by Turkey (Ibrahim 2004).
2. The evidence presented in this section may be biased by the fact that it is restricted
to literature published in English. A review that includes texts written in Arabic
might yield different conclusions.
3. Ijtihad is an independent and authoritative interpretation of Islamic law. The process
was once practiced by legal scholars to deduce secondary divine laws for regulating
human life from their sources and to explain and articulate the law of God in a given
situation based on expertise in jurisprudence. Ijtihad was abandoned centuries ago
in Sunni practice (Al Masmoudi 2004).
4. The Sunna are the statements and actions of the Prophet, later established as legally
binding precedents in addition to the law established by the Koran (Al Ansari 2004).

References

Abootalebi,Ali.1999."Islam,Islamists and Democracy."Meria 3 (1).http: //meria.idc.ac.il.
------.2004."Iran's Struggle for Democracy Continues."Meria 8 (2).http://meria.idc.ac.il.
Al Ansari, Abid-al-Hamid. 2004. "The Possibility of Islamic Groups' Participation in
Democratic Systems: Positions and Fears." Paper presented at the Islamic Reform
Conference, Brookings Institution, Washington, DC, October.
Al-Masmoudi, Radwan. 2004."Democracy and Ijtihad: The Twin Pillars of Reform in the
Islamic World."Paper presented at the Islamic Reform Conference, Brookings Insti-
tution, Washington, DC, October.
Alvi, Hayat. 2005."The Human Rights of Women and Social Transformation in the Arab
Middle East." Meria 9 (2). http://meria.idc.ac.il.
Ben Salem, Hatem, and Richard Vengroff. 1992. "Assessing the Impact of Decentraliza-
tion on Governance: A Comparative Methodological Approach and Application to
Tunisia." Public Administration and Development 12: 473�92.
Fawaz, Mona. 2002."Reflections on Best Practices in Governance in ESCWA Countries."
Paper prepared for the Empowering Local Government Institutions in the Middle
East and North Africa Region Workshop, Fourth Mediterranean Development
Forum, Amman, October 6�9.
Gilbraith, M. 1996."Civil Society in the Arab World." IBN Khaldun Centre, Cairo.
Ibrahim, Ezzat. 2004. "Arab and American Think Tanks: New Possibilities for Coopera-
tion? New Engines for Reform?" Brookings Institution, Washington, DC.
Kadhim, Nadjah. 2004. "The Role of Moderate Islamic Groups in Easing the Severity of
the Decline."Paper presented at the Islamic Reform Conference, Brookings Institu-
tion, Washington, DC, October.
McGee, Rosemary. 2003. Legal Frameworks for Citizen Participation: A Synthesis Report.
LogoLink report, Institute for Development Studies, University of Sussex, Brighton,
United Kingdom.
Pettersson, Thorleif. 2003. "Islam and Global Governance Orientations towards the
United Nations and Human Rights among Four Islamic and Four Western Societies."
Paper presented at the conference Explaining the Worldviews of the Islamic Publics
Theoretical and Methodological Issues, Cairo, February 24�26.

Participatory Budgeting in the Middle East and North Africa 241

Reuben, William. 2003."The Role of Civic Engagement and Social Accountability in the
Governance Equation."Social Development Note 75,World Bank,Washington, DC.
Sarrouh, Elissar. 2003."Decentralised Governance for Development in the Arab States."
Paper prepared for the Local Governance Forum in the Arab Region, United Nations
Development Programme, Beirut.
Spahn, Bernd. 1998. "Issues of Governance in a Broad Context." Paper presented at the
Mediterranean Development Forum, Marrakech, September.
UN-Habitat. 2001. Implementing the Habitat Agenda. Report on the Istanbul+5 Thematic
Committee, presented at the 25th Special Session of the United Nations General
Assembly, New York.
------.2006a.Baghdad Neighbourhood Rehabilitation Programme.http://www.unhabitat.
org/content.asp?cid=689&catid=203&typeid=13&subMenuId=0.
------.2006b.Municipal Practices for Urban Poverty Reduction. http://www.bestpractices.
org/bpbriefs/urban_governance.html.
UNDP (United Nations Development Programme). 2005. Arab Human Development
Report. New York: United Nations Development Programme.
Wampler, Brian. 2000. A Guide to Participatory Budgeting. International Budget Project,
Washington, DC.
World Bank. 2003. Better Governance for Development in the Middle East and North Africa:
MENA Development Report. Washington, DC: World Bank.

Appendix
A Primer on Effective
Participation
a l t a f � l s c h e r

ivic engagement in public affairs can increase state effectiveness.
C
When citizens have the opportunity to make their needs
known and hold public institutions to account, it is argued, public
resources are likely to be used more efficiently and to deliver pub-
lic goods and services that are better aligned with citizens' needs.
Local communities have the best knowledge of their needs and
preferences and of local conditions. Public policy and advocacy
organizations outside of the state often give voice to needs and
preferences that are not heard in closed budget processes. Citizen
participation in decision making reduces the information gap
between citizens and the state and makes it more likely that funds
will be used to deliver the most-needed goods and services,
improving government effectiveness.

Citizen Participation and State Effectiveness

Reuben (2003) refers to this dimension of governance--the ability of
governments to fulfill citizen expectations--as decisiveness. Partici-
patory systems have the potential to incorporate local knowledge at
all levels of decision making: determination of citizen expectations,
selection of public policy objectives, and the means of achieving

243

244 Alta F�lscher

those objectives. Participation therefore results in better public policy and
better public policy implementation. This is true for participatory budget-
ing mechanisms that involve citizens only indirectly (initiatives in which
information on citizens' needs, interests, and opinions is put into the public
domain), as well as for initiatives in which citizens participate directly in
public resource decisions at the local level.
Participation also indirectly leads to better public decisions by increas-
ing vertical, or social, accountability.When citizens are engaged in processes
of planning, funding, delivering, and monitoring public goods and services,
the incentives of public officials and office holders change. They become
more accountable for the choices they make, reducing corruption and
increasing effectiveness and efficiency. When supported by broader demo-
cratic political and social changes, citizens learn that not only are they the
clients of government (rather than the recipients of government-granted
goods and services), they are also the principals, with governments as their
agents. This recognition inverts more autocratic systems of public power
distribution, reinforcing citizen demand for accountable government.
Reuben (2003) refers to this dimension of improved conditions for gover-
nance as accountability in holding public power under the control of those
represented by the state.
The argument is that effective public participation in resource decisions
builds social capital. Public participation increases the capacity of individuals
and local communities for collective action, strengthening ties between
individuals, households, and groups. This leads to more economic and social
opportunities and to greater potential for improving the quality and cover-
age of developmental inputs such as public education, health, and social
development services. Successful participatory mechanisms strengthen citi-
zens' access to information by creating a framework that creates incentives
for citizens to demand more and better information and puts pressure on
state structures to provide information. Meaningful and effective citizen
participation in public choices also improves trust in government and com-
mitment to tradeoffs made. Together with improved budget transparency,
participation can build social cohesion.
Insofar as democracy and participation are ends in themselves, partici-
pation in public decision making is a form of direct democracy that allows
for a more meaningful democratic relationship between citizens and govern-
ment than representative democracy (McGee 2003). It can also provide
marginalized groups with access to policy makers.
This is in contrast to purely representative democracy, which presup-
poses absolute bureaucratic efficiency. However, effective participatory

Appendix 245

democracy is dependent on the quality of deliberation in the process.
Deliberation emphasizes "eliciting broad public participation in a process
which provides citizens an opportunity to consider the issues, weigh alter-
natives, and express a judgment about which policy or candidate is pre-
ferred. . . .It is distinguished from ordinary,thin modes of public involvement
by the breadth and quality of participation" (Weeks 2000, cited in McGee
2003, p. 10). It is therefore not tokenistic. Participatory processes also pre-
suppose decision-making processes that are dictated not by interest group
politics but by rationality. If participative practices are to improve the qual-
ity of democratic governance, enabling conditions for quality deliberative
processes should be in place. These include the incentives citizens face, their
skill levels, and the quality of information available in the process.
The World Bank's 2003 MENA Development Report on governance
puts forward a framework for good governance in the Middle East and
North Africa that includes the aspects highlighted above (World Bank 2003).
It is based on two core "universal" values of inclusiveness and accountabil-
ity. If governance systems offer mechanisms to embody and protect these
values, they support state effectiveness and human development.
The framework links inclusive governance to equality: inclusive gover-
nance means that all those who have a stake in governance processes and
who want to participate in them have equal opportunities to do so. It
contains mechanisms to define and protect all people's basic rights, and it
provides remedies and recourse for those who are excluded, guaranteed
by a rule of law. The need for accountability is legitimized in the notion of
representation, which in governance terms means that those selected to act
in the name of the people are answerable to the people for their successes
and failures. Accountability in turn rests on knowledge and information--
transparency--and on institutional arrangements that create incentives for
public officials to act faithfully, efficiently, and honestly in carrying out the
will of the people. The framework highlights contestability in the selection
of public officials and the fostering of an ethic of public service as key ingre-
dients in support of accountability.
Viewing participatory budgeting mechanisms against this framework
illustrates significant conceptual congruence: successful participatory budget-
ing requires institutional arrangements that allow citizens to participate in
public resource decisions on an equal platform and ensure the availability of
good information. Selection of public officials should be contestable; if it is
not, the incentives facing those in power work against meaningful public
participation. Participatory budgeting (including mechanisms that facilitate
horizontal accountability) fosters a system in which public officials are

246 Alta F�lscher

accountable and public policies become contestable. In short, participatory
budgeting mechanisms operate at the core of a good governance system,
embodying and reinforcing values that, it is argued, could help some regions
of the world, including the Middle East and North Africa, narrow significant
growth and human development gaps.

Types of Participation

Very different types and levels of citizen engagement with public resource
decisions and service delivery are referred to as participatory budgeting. One
can differentiate two broad types of citizen engagement, distinguished by the
degree to which citizens enter the action space of the state in planning for,
allocating, using, and monitoring the use of public resources. In the first set
of participatory budgeting initiatives, citizens do not attempt to take over or
partner with the state in the budget process but instead undertake activities
in the broader public domain that are aimed primarily at improving the
transparency of governments' actions and the accountability of state actors.
This type of participation is within the boundaries of both representative
democracy and more autocratic forms of government (provided that such
activities are tolerated). Making public decisions is still the purview of govern-
ment agencies and elected officeholders. However, citizens do not take the
bureaucratic effectiveness of these institutions for granted but undertake
activities to bolster transparency and accountability. These activities typi-
cally generate information on public policy and services outside of the state
in order to influence what happens in the state. Activities in this broad cate-
gory are usually initiated by CSOs. This type of participation relies on the
quality of the information to persuade decision makers to change develop-
ment and funding priorities or improve the quality of services.
Budget analysis and dissemination by skilled professionals are often
aided by garnering the support of broad-based movements, by having"peo-
ple power" behind it, as Paul (2005) argues. He emphasizes the need for
coalitions of different types of CSOs. These coalitions need to use the media
to reach citizens, forge ties with officials and members of oversight bodies,
and be able to translate dry, technical material into information that ordi-
nary people will understand and find relevant. These campaigns are
strengthened if there is true representative democracy and citizens cast their
votes on the basis of policy and service delivery issues. However, the success
of such initiatives is not necessarily dependent on a democratic environment.
In the second set of initiatives, citizens engage or are engaged in the
decision-making processes of public agencies.Examples of this participation,

Appendix 247

which can be seen as a form of direct democracy, can be found throughout
the budget process. The mechanisms deployed represent different intensi-
ties of participation, because governments have discretion over the degree
of access to traditional state-controlled action spaces they provide in setting
up or taking over participatory mechanisms.
McGee (2003) distinguishes four types of participation:

information sharing (the state puts budget and public policy information
into the public domain);
consultation (the state sets up mechanisms such as forums, councils, and
referendums or surveys to gather information on citizen preferences);
joint decision making (citizens not only provide information on their
needs and preferences but are active in real decision making);
initiation and control by stakeholders (citizens have direct control over the
full process of developing,raising funds for,and implementing projects or
policy, as in social fund and community-driven development projects).

As participatory practices move up this ladder, the argument goes, they
become more effective instruments of participation: direct initiation and
control by stakeholders is more powerful than joint decision making, which
in turn is more effective than consultation and information sharing.

Preconditions and Enabling Factors for Citizen Engagement
with Public Decisions

The capacity of citizens to engage the state on the allocation and use of pub-
lic resources--and the likelihood of their actually doing so--depend on
several factors. These include the openness and democratic depth of politi-
cal and governance systems; the existence of enabling legal frameworks,
including guarantees of basic freedoms; the capacity for participation both
inside and outside of government; the existence of functional and free
media institutions; and the willingness and capacity of the state to make
budget information available.

Formal and Informal Political Systems

Paul (2005) contends that initiatives that encourage citizen participation in
public decision making are more successful in societies that adhere to
democratic governance, are open to public debate and criticism of those in
authority, have relatively free media, and allow independent CSOs to take

248 Alta F�lscher

root. Goetz and Gaventa (2001) emphasize the importance of the nature
and organization of the political system in determining the level and quality
of participation. The argument is that even if a civil society group is well
equipped with expertise and resources to initiate participation, its efforts
will not yield significant benefits unless election to power is contestable.
Contestability refers not only to the existence of real competition in the
election of candidates but also to the requirement that the attractiveness of
one candidate over another should be driven less by the politics of identity,
personality, and patronage and more by issues of public policy.When issues
of public policy and service delivery get more play in voter preferences,
politicians have less leeway to ignore events or behave in ways that invite
voter dissatisfaction.
Spahn (1998, p. 2) emphasizes that while good governance needs to be
rooted in local norms and values, the legitimacy of governments remains an
important element. Legitimate government "is essential to form consensus
within a society and thus to foster political stability and social cohesion."
Governments are legitimate when they are representative and their political
and bureaucratic power is limited.A free media and effective opposition par-
ties are important elements of a legitimate system of government.
Bringing a concept of legitimacy to good governance in the context of
participatory budgeting is important in two ways. First, meaningful space
for participation in government processes contributes to legitimacy and
trust in government. Second, some degree of legitimacy is necessary before
citizens will engage with government,particularly directly.Goetz and Gaventa
(2001) emphasize the role of a mature political party system in legitimizing
government and enabling participation.
Fawaz (2002, p. 11) refers to these aspects as an "environment of politi-
cal pluralism and inclusiveness" and notes that notions of empowerment of
local authorities, good governance, partnership, and accountable and trans-
parent management carry implicit assumptions about the existence of
media freedom, high levels of devolution of authority, equal power relations
among actors, and civil society with sufficient capacity to participate. When
these features are not in place, they act as "silent barriers" to change.
While participatory budgeting initiatives can build trust and social
capital, they also depend on some already existing degree of trust (between
citizens and the state as well as among citizens). Some of the most success-
ful case studies in Asia have occurred in Thailand: within a nationally set
policy and legal framework, several local area authorities have initiated
sophisticated participatory budget processes in which hierarchies of civil
committees make the tradeoffs between different interests within a

Appendix 249

community and between communities. The existence of trust that over time
resources will be distributed equitably across interest groups has enabled the
groups to agree on funding. The high level of trust may in part be supported
by underlying social cohesiveness: Thai society is relatively homogeneous.
Fawaz (2002) argues that the promotion of good governance based on
notions of representivity, transparency, accountability, and participation
often fails to take account of the reality of ethnic and religious divisions
in some states.
The type of society, the type of political system, the legitimacy of the
government, and attitudes toward governance also determine which types of
participatory initiatives can be introduced successfully. The effectiveness of
initiatives of all kinds depends on the likelihood of state actors experiencing
"public accountability discomfort" when initiatives and their outcomes are
ignored. The more vibrant a country's democratic governance and the more
real the contest for political power,the more options are open for effective civil
society participation. If the media are not free, access to information is
repressed, societies do not allow public debate on issues of public interest,
and freedom of association is constrained,civil society cannot conduct public
policy and advocacy work.
The attitude of state actors to citizen voice is related in principle to sys-
tems of accountability, which in turn is related to contestability and repre-
sentivity, as set out in the World Bank framework for governance discussed
above. The importance of the relation between these issues correlates well
with the case study evidence presented in this volume that participatory
initiatives bringing citizens into the public sphere to make decisions about
resource use are critically dependent on the willingness of local government
representatives to pay attention to citizens' expressed preferences. This in
turn is dependent on the nature of the political system. Where local civil
society or third parties, such as development partners, initiate a direct
participation initiative without having first secured real commitment from
public officials, the impact remains questionable.
Figure A.1 provides a schematic representation of these relationships.
The shaded area denotes instances of participatory mechanisms that are
unlikely to yield results--mechanisms that bring citizens into the public
sphere to make decisions within an environment in which local government
officials have little interest in citizen participation and policy issues have low
political currency. The risk of participation being counterproductive in such
cases is real, because citizens soon learn that participation has no or very few
real benefits, making them less interested in initiatives under more favorable
conditions later.

250 Alta F�lscher

Public actors willing to listen to citizen voice
(Enabled by high policy content of political discourse)

actors

state
of
Civil society influencing Civil society inside state
state from outside of action space,
state action space Type of project Attitude influencing state

(Purely representative Type
Type of (Includes elements of
democracy) of democractic direct democracy)
political practice

culture

Public officials with little interest in listening to citizen voice
(Policy issues have low political currency value)

Source: Author.

F I G U R E A . 1 State Attitude toward Citizen Voice and Effective
Participation

One way of bypassing such constraints is to set up programs in which
community-level participation structures have real authority over develop-
ment funds that are not channeled through the state. While this may yield
short-term benefits, the sustainability of such initiatives is not certain: this
type of mechanism can lead to long-term effective engagement only if suf-
ficient local taste and capacity ensue for participation and demand builds.
In this case, the environment is transformed into one in which the political
and governance context forces state actors to engage substantively.
Initiatives in the top right-hand corner have the greatest impact. Here,
public actors are willing to listen to citizen voice (and are supported by a local
political culture that is driven by issues of public policy), and well-designed
mechanisms allow civil society direct access to and participation in public
decision making. Program initiators operating in this type of environment
have the most scope for selecting the type and level of participation.
On the left-hand side of figure A.1, citizens' own initiatives to improve
public transparency and the accountability of state actors can yield successful
results even in environments in which citizens'voice may not have immediate
effect: in Africa, Asia, Eastern Europe, and Latin America, citizens have

Appendix 251

elbowed open space and demanded that their voices be heard. Doing so takes
time, capacity, and careful strategizing, including coalition building. DISHA
in India,the St.Petersburg Strategiya Centre in Russia,IDASA in SouthAfrica,
and CIDE (Centro de Investigacion y Docencia Economicas) in Mexico have
succeeded in building credible voices on public resource matters (Inter-
national Budget Project 2000).Initiatives like these can move the participatory
environment from one in which state actors are unwilling to engage to one in
which they have little choice but to engage with citizen voice, opening up the
options for effective participation. To succeed, such initiatives must choose
the correct entry point and carefully design and implement projects to maxi-
mize citizen participation. Perceptions of citizen-state relationships, power
distribution,governance systems,and degrees of individual and press freedom,
as well as perceptions of trust among citizens and between citizens and the
state, are therefore important environmental determinants of whether and
which types of participatory budgeting initiatives will bring benefits.

Supportive Legal and Policy Frameworks

A supportive legal framework is an enabling, even necessary, condition for
citizens to participate in and contribute to processes in the public sphere.
Legal frameworks regulate the terms of actors' engagement and the scope
they have for influencing behavior in the arena of the other (McGee 2003),
albeit the arena between central and subnational governments or between
government and civil society actors. Such frameworks are never sufficient,
however: government practices, the overall incentive framework, and action
by citizens or the state are required to initiate and sustain participation.
For all types of citizen engagement, the most important feature of the
legal framework is the guarantee of certain freedoms and human rights. If
no provisions guarantee citizens' rights to freely associate, to express them-
selves, and to participate in a relationship with the state (or if provisions of
the law limit these rights), the space for participatory initiatives is severely
limited. CSOs or individual citizens who attempt to form associations to
review public services and influence public resource decisions will have no
legal basis for asserting their right to do so. If CSOs are to be able to put
information in the public domain to influence what happens in the state, the
legal framework must allow--or at least not prohibit or constrain--civic
organization, freedom of speech, and access to information.
For direct citizen involvement in participatory budgeting, the legal
framework requirements are greater. A review of community-driven devel-
opment initiatives suggests that a higher level of decentralization of political,

252 Alta F�lscher

administrative,and fiscal competency to local levels of government is necessary
for local communities to engage effectively in local resource decisions (ESCWA
2004). This makes sense: citizens will engage in local processes only if they
believe that local governments have a real chance of determining which public
goods and services will be delivered locally. This means that a legal framework
for decentralization needs to be in place. Such a framework is not sufficient,
however: attempts to decentralize, including the creation of a political appara-
tus, often occur at the administrative level but are not followed by sufficient
fiscal autonomy for local governments, limiting the level of resources over
which local governments have control and constraining participation.
An enabling framework for participation at the local level is also desir-
able, although it is arguably not necessary. A national enabling framework
catalyzed the development of local level participatory practices in Thailand,
where a national requirement for participation in local government prac-
tices prompted several local authorities to develop institutions to implement
the requirement. Experience, particularly in Eastern Europe and the former
Soviet republics, where participatory local governance is a standard feature
of constitutional and national legal frameworks, has shown that national-
level legislation may not be sufficient, however, particularly if it lack details
on the institutions that may be deployed. One of the more succesful exam-
ples of community-driven development is Romania, where the legislative
framework includes detailed provisions. Examples from elsewhere (such as
Naga City in the Philippines) show that local-level development of national
constitutional and legal frameworks institutionalizes participation.

Local Capacity and Knowledge

The assessment of community-driven development by the Economic and
Social Commission for Western Asia (ESCWA 2004) singles out the need for
continuous support to develop capacity for participatory practices if initia-
tives are to be successful. This finding echoes the results of other studies that
point to the importance of local capacity for participatory success, includ-
ing the capacity of local governments and local civil society and the capacity
of third-party facilitating organizations.
The capacity of local governments--in terms of both human resources
and systems--to plan, budget, and manage the delivery of public goods and
services and participatory processes is critical. Transparency and an institu-
tional environment conducive to citizen participation are also critical. This is
particularly true for mechanisms that involve direct participation of citizens
in decision making. Case study evidence points to the important role that

Appendix 253

clear, predictable, and enforced decision-making rules play in providing
confidence to citizens that their participation will lead to direct results. More
subtle incentives relate to good budgeting principles, such as having clear
resource ceilings,so that real choices have to be made; avoiding wish-list plan-
ning, with the inevitable loss of trust in participation when proposed projects
are not implemented, is critical. Strong local capacity also supports the devel-
opment of civil society advocacy�type initiatives that do not involve direct
participation in decision making. In India, for example, the development of a
civil society advocacy network was possible only after financial management
practices improved the level and quality of information available.
The existence of CSOs with capacity is also critical. Because of the tech-
nical nature of public budgets and public service delivery, significant depth
of organization and some sophisticated capacity within organizations are
required to engage with these issues. Putting good-quality information into
the public domain requires expertise, the forming of coalitions (among
CSOs and between CSOs and academic institutions), or both. The case study
evidence indicates that coalition building among nongovernmental struc-
tures is important, both to bring on board needed skills and to build a wider
front of support,making it more difficult for state actors to ignore campaigns.
Civil society capacity is also required for successful citizen participation in
local resource allocation decisions.In Eastern Europe,where societies emerged
from a long period of limited citizen engagement, partnerships between local
governments and key CSOs appear to have made an important contribution
to making participation work.
In most of the mechanisms that allow citizens a direct say in local
resource decisions, organizational, facilitation, and conflict-resolution skills
are also required.Where development partners are involved in initiating and
sustaining participatory budgeting initiatives, these skills are often provided
by contracted third parties. In some municipalities, such as Porte Alegre, the
quality of facilitation has been an important factor in widening participation.
Finally, the capacity of citizens themselves is important. Educational
attainment is less important a determinant of participation than citizens'
grasp of their right to engage in individual and collective action and to hold
state actors to account.

Free Media Institutions

Strong local media institutions that can disseminate information to citizens--
informing them of events on the budget calendar, discussing issues pertinent
to the resource decisions, communicating the outcomes of processes--are

254 Alta F�lscher

critical to participatory programs that involve direct citizen involvement.This
is particularly clear in the Eastern European case studies, where local media
institutions have been important players linking local governments and citizens
in processes allowing direct participation in public resource decisions.
For participatory budgeting initiatives that involve the introduction
of budget information into the public domain, a free media is a precondi-
tion. Reaching as many citizens as possible is an essential part of ensuring
the effectiveness of civil society analyses of public budgets and service
delivery. Without free and functional media institutions, the reach of
organizations will be limited to stakeholders whom CSOs can contact
directly. A review of successful applied budget initiatives across the world
reveals the importance of good relations with a free press. The Institute for
Economic Affairs in Kenya; the Centre for Budget and Policy Priorities in
Washington, D.C.; and IDASA in South Africa could not have been effec-
tive had they not been able to disseminate their findings widely through a
free and responsive media.

Availability of Information

It is an axiom of participation that citizens need access to information to
participate--this relationship is recognized in the international human
rights framework (OHCHR 2004). The requirement of a minimum level of
transparency about the allocation and use of public funds for citizen partici-
pation holds for both types of participatory budgeting initiatives. CSOs can-
not engage with public resource decisions if they do not know what those
decisions are. Similarly, citizens' ability to be involved directly with public
decision-making processes in a meaningful way depends on what informa-
tion they receive, when they receive it, and whether they are informed about
the outcomes of the processes.
The availability of information on public funds is a function of govern-
ments' willingness and capacity. Fiscal transparency is not merely about the
availability of information. Specific types of information must be provided
regularly. The information must be provided in accessible formats in a
timely manner. Legal frameworks that make provision for fiscal and budget
transparency along these dimensions support participatory budgeting, as
does legislation guaranteeing citizens'rights to access information. However,
even if such legislation exists, providing full information requires sophisti-
cated financial management capacity. Such capacity is often as much the
result of demand for accountability--both internally and externally--as a
prerequisite for it.

Appendix 255

References

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Development as an Integrated Social Policy at the Local Level." United Nations,
ESCWA, New York.
Fawaz, Mona. 2002."Reflections on Best Practices in Governance in ESCWA Countries."
Paper prepared for Empowering Local Government Institutions in the Middle East
and North Africa Region Workshop, Fourth Mediterranean Development Forum,
Amman, October 6�9.
Goetz, Annemarie, and John Gaventa. 2001. "Bringing Citizen Voice and Client Focus
into Service Delivery." IDS Working Paper 128, Institute for Development Studies,
University of Sussex, Brighton, United Kingdom.
International Budget Project. 2000."A Taste of Success, Examples of the Budget Work of
NGOs." Centre for Budget and Policy Priorities, Washington, DC.
McGee, R. 2003. Legal Frameworks for Citizen Participation: A Synthesis Report. LogoLink
report, Institute for Development Studies, University of Sussex, Brighton, United
Kingdom.
OHCHR (Office of the High Commissioner for Human Rights). 2004. Human Rights and
Poverty Reduction: A Conceptual Framework. Geneva: United Nations.
Paul, Samuel. 2005."Auditing for Social Change: Learning from Civil Society Initiatives."
Paper presented at the Sixth Global Forum on Reinventing Government, Seoul,
May 24�27.
Reuben, W. 2003. "The Role of Civic Engagement and Social Accountability in the
Governance Equation."Social Development Note 75,World Bank,Washington, DC.
Spahn, B. 1998. "Issues of Governance in a Broad Context." Paper presented at the
Mediterranean Development Forum, Marrakech, September.
Weeks, E. 2000."The Practice of Deliberative Democracy: Results from Four Large-Scale
Trials." Public Administration Review 60 (4): 360�72.
World Bank. 2003. Better Governance for Development in the Middle East and North
Africa: Enhancing Inclusiveness and Accountability. (MENA Development Report).
Washington, DC: World Bank.

Index

Boxes, figures, notes, and tables are indicated by b, f, n, and t, respectively. Entries found
on the CD are indicated by that abbreviation.

Abers, Rebecca, 32 Arz�, Alvaro, 94
Abootalebi, Ali, 228, 238, 239 Asia, 9�10, 157�89. See also specific
accountability. See transparency and countries
accountability capacity building in, 175�76
administrative reform civic commissions, 174�75
bureaucracy, disillusionment with, civic forums, 177�78
57�58 civil society in, 163�64
participatory budgeting leading to, consultation and joint decision
44�45, 52�53 making, projects involving,
advisory groups in Central and Eastern 171�78
Europe, 138�40, 144 decentralization in, 157, 160�61t,
Africa. See also Middle East and North 161�63, 180
Africa, Sub-Saharan Africa, and democratic practice in, 158�59,
specific countries 181�82
PRSP participation in, 64�65 developing countries' need for citizen
Al-Ahram Centre for Political and participation, 158�59
Strategic Studies, Egypt, focus groups, 173�75
229, 230b impact of participatory budgeting in,
Al Ansari, Abid-al-Hamid, 238 179�82
Al-Masmoudi, Radwan, 237�38 mechanisms of participation in,
Albania, 7, 128, 130, 131, 139, 148t 168�69, 173�78
Alem�n, Arnoldo, 93, 108 NGOs in, 163�64, 165�66, 173, 186
Algeria, 227, 232, 233 political, constitutional, and legislative
Alvi, Hayat, 234 context, 160�61t, 160�63
Andrews, Matthew, 64�65 public meetings, 168�69, 173�74
approval of budget, 65�71, 67f stakeholder initiation and control of
Armenia, 128, 130, 137�38, programs, 178�79
148�49t success factors in, 182�86

257

258 Index

transparency and accountability, Bolivia, 5, 6
programs improving, 165�71, decentralization in, 104
180�81 historical background of participatory
types of participatory budgeting in, budgeting in, 93
164�65 liberal approach to participatory
auditing. See monitoring and evaluation budgeting in, 117
awareness of citizens. See citizenship local case studies, 112�14, 113t, 115t
education and knowledge national program of participatory
budgeting in, 101, 104�6
Baiocchi, Gianpaolo, 32 PRSP participation in, 65
Bangladesh, 1�29CD, 9, 12�13, 157 Brazil, 4, 5
administrative autonomy at local level, distribution of resources studied in, 36
lack of, 16CD effects of participatory budgeting
budget procedures, 3CD, 6CDf studied in, 33�36, 33t, 34t
capacity building, 18�22CD, 175�76 government attitudes towards citizen
civil society in, 163 participation in, 79�80
degree of participation, factors initiation of participatory budgeting
affecting, 10�12CD in, 4, 6, 22, 23�24, 66, 91�94
developing countries' need for citizen innovation and diffusion phases
participation, 158 analyzed in, 32�33
effectiveness of program, 13�15CD liberal approach to participatory
empowerment and inclusiveness, budgeting in, 118
12�13CD as model, 63CDb
fiscal framework, 11CD, 16�18CD, national program of participatory
24�26CD budgeting in, 101�3
impact of programs, 12�18CD, 180 resource allocation (budget
local government institutions, 2CD, preparation and approval), citizen
6CDf, 16CD, 166 participation in, 66�68, 67f
marginalized groups, involvement of, Brillantes, Alex B., Jr., xvii, 14, 49�66CD
12CD Bulgaria, 7, 128
mechanisms of participation, 9�12CD impact of programs in, 149t
medium-term agenda, 23CDt local governments, legal framework
monitoring and evaluation, 7�8CD for, 130, 131b
open budget sessions, 7CD public meetings for capital investment
organization, 3�8CD planning, 140�41, 144, 145
parties involved in program, 8�9CD, bureaucracy, disillusionment with,
8CDf, 8CDt 57�58
personnel issues, 16CD business community, reasons for
planning, 5�6CD, 12�13CD involvement of, 43�44
political, constitutional, and legislative
context, 160t, 162 Cabannes, Yves, 100
PRSP, 1�2CD, 23t Campbell, Tim, 96
success factors in, 183, 184 capacity building
tax revenue increase due to, 15CDf in Asia, 175�76
training needs, 19�21CD, 20CDt country case studies
Banzer, Hugo, 104 Bangladesh, 18�22CD
Bartholdson, �rjan, 105 India, 45�46CD

Index 259

Philippines, 62�64CD bureaucracy, disillusionment with,
Russian Federation, 87�90CD 57�58
South Africa, 123CD in Central and Eastern Europe, 132�33
Thailand, 151CD costs of, 80�83, 81f
Ukraine, 170�75CD democratic ideals and, 58
in Sub-Saharan Africa, 220 developing countries' need for, 58�60,
CBOs (community-based organizations) 158�59
in Central and Eastern Europe, 132 difficulties in fostering, 62�63
Central and Eastern Europe, 7�9, 127�56. factors involved in, 60�61
See also specific countries government attitudes towards, 4�5,
advisory groups, 138�40, 144 78�83
citizen participation and citizenship importance of, 55�56
education, 132�33, 231 instrumental assessment of,
citizenship education, 132�33, 231 80�83, 81f
conditions common to participatory motivations for, 41�42
budgeting initiatives in, 129 NGOs' role in, 4, 63
CSOs in, 7�8, 132�33, 146�47 postmodern discourse theory and,
decentralization in, 128�29 56�57
impact of programs in, 143�47, PRSPs, 56, 64�65, 79
148�54t typology of, 61, 62t, 246�47
information generating programs, 134, citizenship education and knowledge
135�37 availability of information, 254
information sharing, consultation, and in Central and Eastern Europe,
joint decision-making programs, 132�33, 231
137�42 effective participation requiring,
leadership, importance of, 147 252�54
legal frameworks, 130�32, 131b free media
local governments in, 130�32, 131b, effective participation requiring,
146�47 253�54
mechanisms of participation in, in Middle East and North Africa,
143�44, 146 232�33
NGOs in, 7, 132, 136, 143, 147 Middle East and North Africa lacking,
political context in, 133�34 229�33
public meetings, 140�42, 144 promoted by participatory budgeting,
stakeholder initiation and control of 49�51, 60
programs, 142�43, 145 training concerns in country case
typology of participatory budgeting studies
in, 134�35 Bangladesh, 19�21CD, 20CDt
Ch�vez, Hugo, 117 Thailand, 152�53CD
citizen participation, 4�5, 55�87 civic commissions, 141�42CD, 145CD,
arguments in favor of, 55�60 174�75
in budgeting process, 65�77 civic forums, 132CD, 134CD, 144�45CD,
audit and performance evaluation, 177�78
75�77, 78f civil society organizations (CSOs)
execution of budget, 71�75 in Asia, 163�64
preparation and approval, in Central and Eastern Europe, 7�8,
65�71, 67f 132�33, 146�47

260 Index

effective participation and, 253 free media
information generating programs in effective participation requiring,
Central and Eastern Europe, 253�54
134, 135 in Middle East and North Africa,
Middle East and North African 232�33
restrictions on, 229 in Latin America, 94�96
partnerships with local governments, Middle East and North Africa, 226�29,
146�47 238�39
reasons for involvement of, 3, 42 preconditions for effective
communication issues in South Africa, participation, 247�51
123CD state effectiveness, 244�45
community-based organizations developing countries' need for citizen
(CBOs) in Central and Eastern participation, 58�60, 158�59
Europe, 132 development community's support
consultation programs for participatory budgeting, 96�97
in Asia, 171�78 discourse theory, postmodern, 56�57
in Central and Eastern Europe, distribution of resources, 36, 65�71, 67f
137�42 diversity and inclusiveness. See also women
Islamic values and, 238 country case studies
control of programs by stakeholders, Bangladesh, 12�13CD
142�43, 145, 178�79 South Africa, 123CD
costs of citizen participation, in Middle East and North Africa, 234
80�83, 81f Sub-Saharan Africa, in 221
country case studies, 12�18. See also Dutra, Olivio, 95�96
Bangladesh; India; Philippines;
Russia; South Africa; Thailand; Eastern Europe. See Central and Eastern
Ukraine Europe
CSOs. See civil society organizations ECES (Egyptian Centre for Economic
cultural factors in Thailand, 147CD Studies), 230b
Edstrom, Judith, 158, 179
decentralization educating citizens. See citizenship
in Asia, 157, 160�61t, 161�63, 180 education and knowledge
in Central and Eastern Europe, Egypt
128�29 democratization in, 227, 228, 229
as condition conducive to Manshiet Nasser informal settlement,
participatory budgeting, 98�99 Cairo, 235
country case studies think tanks in, 229, 230b
Philippines, 50CD, 51CDf transparency lacking in, 232
Ukraine, 156�57CD Egyptian Centre for Economic Studies
in Latin America, 93, 100�101 (ECES), 230b
local case studies, 111�16 Europe, Central and Eastern. See Central
in Middle East and North Africa, and Eastern Europe
233, 235 evaluation. See monitoring and
democratic ideals and participatory evaluation
budgeting, 58 execution of budget, citizen participation
in Asia, 158�59, 181�82 in, 71�75

Index 261

Fawaz, Mona, 233, 248 Guatemala, 5
fiscal framework decentralization in, 106
country case studies historical background of participatory
Bangladesh, 11CD, 16�18CD, budgeting in, 93�94
24�26CD local case studies, 113t, 114
Russian Federation, 69�71CD, national program of participatory
70CDt budgeting in, 101, 106�7
South Africa, 116�22CD, 121CDt
Thailand, 128�29CD, 129CDt Habermas, Jurgen, 61
Ukraine, 158�63CD, 159CDf, Habitat II Conference, Istanbul (United
160�62CDt Nations), 93
in Sub-Saharan Africa, 195�97 Heavily Indebted Poor Countries (HIPC II)
focus groups, 138CD, 142�43CD, program, 94, 104, 106, 108
143�44CD, 173�75 Heimans, Jeremy, 79
F�lscher, Alta, xvii HIPC II (Heavily Indebted Poor
on Asia, 9�10, 157�89 Countries) program, 94, 104,
on Central and Eastern Europe, 7�9, 106, 108
127�56 historical background of participatory
on effective participation, 82, 243�55 budgeting, 22, 23�24, 92�94
on Middle East and North Africa, Honduras, PRSP participation in, 65
11�12, 225�41 Hughes, Alexandra, 63
Forner, Patricia, 65
free media Ibn Khaldun Centre, Egypt, 230b
effective participation requiring, Ibrahim, Ezzat, 229, 230�31b
253�54 ideological approaches to participatory
in Middle East and North Africa, budgeting
232�33 Asian political context, 160�61t,
Fujimori, Alberto, 109, 111 160�63, 181�82
Central and Eastern Europe, political
Gaventa, John, 133, 166, 248 context in, 133�34
Goetz, Annemarie, 133, 166, 248 citizen participation, arguments in
Goldfrank, Benjamin, xvii, 5�6, 91�126 favor of, 55�60
good governance democratic ideals (See democratic
association of participatory budgeting ideals and participatory
with, 225�26, 237, 245 budgeting)
bureaucracy, disillusionment with, in Latin America, 94�98, 117�18
57�58 preconditions for effective
importance of, xi�xii participation, 247�51
preconditions of effective participation Thailand country case study of
and concept of, 248 political context, 160, 161t, 163
government attitudes towards illiteracy rates in Middle East and North
participatory budgeting, 4�5, 46 Africa, 229�31
citizen participation, 78�83 inclusiveness. See diversity and
effective participation, 249�51, 250f inclusiveness; women
in Sub-Saharan Africa, 219, 221 independent budget analysis in Russian
Grazia, Grazia de, 32, 100 Federation, 74�78CD

262 Index

India, 9, 13�14, 31�48CD, 157 initiation and control of programs by
Bangalore report cards, 3CD, 14CD, stakeholders, 142�43, 145, 178�79
39�40CD, 63CDb, 75�77, 78f, innovation phase, 32
170, 180 instrumental assessment of citizen
budget briefs, 47CD participation, 80�83, 81f
capacity building, 45�46CD Inter-American Development Bank, 96
civil society in, 163 Iran, 227, 232, 233, 238
DISHA/Pathey project, 33�38CD, Iraq, 227, 236
73�75, 167�68, 180, 185, 186, 187, Islam, Roumeen, xiii
231, 251 Islamic rules and values, 225, 237�39
dissemination of information, Israel, 230b, 240n1
35�37CD
execution of budget, citizen joint decision-making programs
participation in, 73�75 in Asia, 171�78
financial statements, issues in Central and Eastern Europe, 137�42
concerning, 40�41CD Jordan, 230b, 232, 233
gender issues in, 45CDb
government structure, 32�33CD Kabir, Mahfuz, xvii�xviii, 1�29CD,
impact of programs, 37�38CD, 12, 176
42�43CD, 180�81 Kadhim, Nadjah, 232
lessons learned, 43�45CD Kenya, 10, 191
MKSS (Mazdoor Kisan Shakti budget cycle in, 206t
Sangathan), 168�69, 180�81, 185, fiscal framework, 195
186, 187, 231 free media, importance of, 254
as model, 63CDb impact of participation in, 213
performance indicators, developing, legal framework, 192�93, 195
41CD local government, 195
political, constitutional, and legislative mechanisms of participation, 197�98
context, 160t, 162 methods of civic participation in
PROOF project, 38�43CD, 169�70, 184 budget process, 205�6
public meetings, 168�69 knowledge management networks in
scope of budgetary analysis, 34�35CD, Thailand, 151�52CD
40CD knowledge of citizens. See citizenship
success factors in, 184, 185�86, 187 education and knowledge
Indonesia, 9, 157 Krafchik, Warren, 82
developing countries' need for citizen Krekeler, Jorge, 105�6
participation, 158 Krylova, Elena, xviii, 15�16, 18,
impact of programs, 180 67�90CD, 144
KDP (Kecamatan Development Kuwait, 228
Program), 178�79
political, constitutional, and legislative Latin America, 5�6, 91�126. See also
context, 160, 161t, 162 specific countries
success factors in, 183, 184, 186 conditions conducive to participatory
information generating programs, 134, budgeting in, 99�100
135�37 decentralization in, 93, 100�101
information sharing programs, 137�42, historical background of participatory
247 budgeting in, 92�94

Index 263

ideological approaches to participatory marginalized groups. See diversity and
budgeting in, 94�98 inclusiveness; women
literature and research, gaps in, 100 "matrioshka" budgeting principles,
local case studies, 111�16, 113t, 115t 158CD
national programs, 101�11, 116 McGee, Rosemary, 63, 134, 181, 247
NGO involvement, 112, 118 mechanisms of participation. See also
leadership issues, 146CD, 147 specific mechanisms, e.g. public
L�autier, Frannie A., xi�xii meetings
Lebanon in Asia, 168�69, 173�78
democratic practice in, 227, 228, 229 in Central and Eastern Europe,
Ghobieri urban poverty project, 143�44, 146
236�37 country case studies
media freedom in, 233 Bangladesh, 9�12CD
think tanks, 230b budget procedures, 100�101CD
transparency in, 232 Philippines, 61�62CD
leftist politics, association of Russian Federation, 71�72CD,
participatory budgeting with, 92�96 74�81CD
legal frameworks South Africa, 97�99CD, 101�6CD,
in Asia, 160�61t, 160�63 109�13CD
in Central and Eastern Europe, Thailand (See under Thailand)
130�32, 131b Ukraine, 163�70CD
country case studies single mechanisms vs. combinations,
South Africa, 93�96CD 146
Thailand, 160, 161t, 163 state effectiveness, 245�46
effective participation and, 251�52 in Sub-Saharan Africa, 197�205
in Sub-Saharan Africa, 192�97, media freedom
219�20 effective participation requiring,
Levene, Josh, 63 253�54
Libya, 228, 230b in Middle East and North Africa,
local governments 232�33
in Central and Eastern Europe, Mexico, 251
130�32, 131b, 146�47 Middle East and North Africa, 11�12,
country case studies 225�41. See also specific countries
Bangladesh, 2CD, 6CDf, 16CD CSO restrictions in, 229
Ukraine (See under Ukraine) decentralization, 233, 235
effective participation and, 252�53 democratic ideals, 226�29,
in Latin America, 111�16, 238�39
113t, 115t diversity and inclusiveness, 234
in Middle East and North Africa, good governance and participatory
233�34 budgeting, 225�26, 237, 245
partnerships with CSOs, 146�47 illiteracy and lack of public knowledge
reasons for involvement of, 39�41 in, 229�33
in Sub-Saharan Africa, 195�97 Islamic rules and values, 225,
237�39
Magdeburg Law, 167 local governments, 233�34
Malawi, PRSP participation in, 65 media freedom in, 232�33
Marcos, Ferdinand, 164 NGOs in, 235, 236, 237

264 Index

potential benefits of participatory nongovernmental organizations (NGOs)
budgeting in, 225�26 in Asia, 163�64, 165�66, 173, 186
think tanks in, 229, 230�31b in Central and Eastern Europe, 7, 132,
transparency, lack of, 232 136, 143, 147
women, 234 citizen participation and, 4, 63, 70�71
minorities. See diversity and in Latin America, 112, 118
inclusiveness; women reasons for involvement of, 42�43
mobilization process, 28�31, 29t North Africa. See Middle East and
Moldova, 7, 128, 130, 132�33 North Africa
monitoring and evaluation
citizen participation in Oman, 228, 238
audit and performance evaluation, open meetings. See public meetings
75�77, 78f
execution and tracking of budget, PAC (Public Affairs Centre), 39�40CD,
71�75 75�77
country case studies Painter, Genevieve, 79
Bangladesh, 7�8CD Palestinian Authority, 227
South Africa, 124CD participatory budgeting, xiii, 21�54.
report cards, 3CD, 14CD, 39�40CD, See also more specific topics,
63CDb, 75�77, 78f, 170, 180 e.g. typologies of participatory
Morales, Evo, 105 budgeting
Morocco, 228, 229, 230b, 233, 239 administrative reform developing
Moynihan, Donald P., xviii, 4�5, 55�87 from, 44�45, 52�53
Mozambique, 10, 191 advantages and disadvantages, 1�2,
challenges faced in, 217 21�23
fiscal framework, 195�96 annual cycle of, 29f
government attitudes, role of, 221 chief actors and their motivations, 3,
impact of participation in, 213 39�44
legal framework, 193 as citizenship school, 49�51, 60
local government, 195�96 conditions conducive to, 24�25, 47�49,
mechanisms of participation, 99�100, 182�86, 247�54
197, 199 defined, 21, 92, 188n1
methods of civic participation in desired outcomes vs. unintended
budget process, 206�7 consequences of, 27�28t
PRSP participation in, 63 diffusion phase, 32�33
distribution of resources, 36
Near East. See Middle East and North good governance and, 225�26, 237, 245
Africa historical background, 22, 23�24,
Nicaragua, 5, 6 92�94
decentralization in, 108 impact of, 33�36, 33t, 34t, 49�53
historical background of participatory implementation of process, 31�32, 31t
budgeting in, 93 innovation phase, 32
liberal approach to participatory Islamic rules and values, 225, 237�39
budgeting in, 117 leftist politics, association with, 92�96
local case studies, 112�14, 113t limiting factors, 3�4, 45�47
national program of participatory main elements of programs for, 2�3,
budgeting in, 101, 107�9 25�32

Index 265

mobilization process, 28�31, 29t political approaches to participatory
selection of projects, 29t, 30�31, 30t budgeting. See ideological
social justice and, 51�53, 60, 158, 244 approaches to participatory
state effectiveness and, 243�46 budgeting
trust, importance of, 182, 248�49 Portillo, Alvaro, 94
partnerships between CSOs and local Porto Alegre. See Brazil
governments, 146�47 postmodern discourse theory, 56�57
Paul, Samuel, xviii, 13, 31�48CD, 75�77, poverty
165�66, 170, 247 Lebanon, Ghobieri urban poverty
performance evaluation. See monitoring project, 236�37
and evaluation participatory budgeting, effects of,
Peru, 5, 6 116�17
decentralization in, 109 Poverty Reduction Strategy Papers
historical background of participatory (PRSPs)
budgeting in, 94 in Africa, 64�65
liberal approach to participatory Bangladesh, 1�2CD
budgeting in, 117 citizen participation in, 56, 64�65, 79
local case studies, 111�14, 113t, 115t government attitudes regarding, 79
national program of participatory preparation of budget, 65�71, 67f
budgeting in, 101�3, 109�11 PRSPs. See Poverty Reduction Strategy
Philippines, 9, 15, 49�66CD, 157 Papers
budget procedures, 57�58CD Public Affairs Centre (PAC), 39�40CD,
capacity building, 62�64CD 75�77
CCAG (Concerned Citizens of Abra public learning and knowledge. See
for Good Governance), 170�71, citizenship education and
181, 187 knowledge
civil society in, 164 public meetings
context of civil society involvement, in Asia, 168�69, 173�74
50�53CD, 52CDb in Central and Eastern Europe,
engaging participation, 56�57CD 140�42, 144
framework for participation, country case studies
58�62CD, 59CDf Bangladesh, 7CD
impact of programs, 60�61CD, 180 Russian Federation, 78�79CD
lessons learned, 57CDb Thailand, 128�40CD, 145CD
mechanisms for participation, Ukraine, 163�70CD
61�62CD public works programs, 36�38
Naga City project, 59�62CD, 172�73,
186, 252 Qatar, 238
planning, 53�55CD, 54�55CDb, quartier associations, Tunisia, 235�36
54CDf Quezada, David, 105�6
political, constitutional, and legislative Quispe, Felipe, 105
context, 160, 161t, 163
real property tax system, streamlining, radical democracy, 94�96
55CDb Rahman, Atiur, xviii, 1�29CD,
special bodies, 62CDf 12, 176
success factors in, 183, 184, 186, 187 Razzaque, Mohammad A., xviii�xix,
Poland, 7, 128, 138, 146, 149t 1�29CD, 12, 176

266 Index

Rea, Oscar, 105�6 Saudi Arabia, 227, 228, 239
regional surveys, 5�12. See also Asia; Segura, Chirinos, 111
Central and Eastern Europe; Latin selection of projects, 29t, 30�31, 30t
America; Middle East and North September 11, 2001 terrorist
Africa; Sub-Saharan Africa attacks, 228
report card surveys (Bangalore, India), Shah, Anwar, xix, 1�18
3CD, 14CD, 39�40CD, 63CDb, Shah, Parmesh, 77
75�77, 78f, 170, 180 Shall, Adrienne, xix, 16�17, 91�126CD,
resource allocation, 36, 65�71, 67f 191�223
Reuben, William, 172, 243, 244 Shapiro, Isaac, 82
Rios Montt, Efra�n, 107 Silva, Luiz In�cio da, 118
Romania, 7, 128, 139�40, 150t, 252 social justice and participatory
Rudqvist, Anders, 105 budgeting, 51�53, 60, 158, 244
Russell-Einhorn, Malcolm, 159 South Africa, 10, 16�17, 91�126CD, 191
Russian Federation, 7, 15�16, budget conference, 105�6CD
67�90CD, 128 budget procedures, 103�5CD,
advisory groups, 139 111�12CD
capacity building, 87�90CD capacity building, 123CD
citizen participation in, 132�33 challenges faced in, 218, 219
concepts used in program, 74CD communication issues, 123CD
government and budget structure, diversity of population, 123CD
67�69CD, 68CDb Ekurhuleni municipality project,
government attitudes, role of, 251 109�14CD
impact of programs in, 81�87CD, 145, fiscal framework, 116�22CD,
150�53t 121CDt, 196
independent budget analysis, 74�78CD government resistance to citizen
information generating programs participation in, 82
in, 136 government structure, 92CD,
local government autonomy and 114�22CD
financing, 69�71CD, 70CDt IDASA, 70�71, 82, 251, 254
local governments, 130 impact of programs, 106�7CD,
"matrioshka" budgeting principles, 113CD, 213�14
158CD legal framework, 193
mechanisms for participation, legislative framework for participation,
71�72CD, 74�81CD 93�96CD
organizations active in program, lessons learned, 107�8CD, 113�14CD,
90CD 122�24CD
public budget hearings, 78�79CD local government, 196
stakeholder initiation and control of Mangaung municipality project,
programs, 142�43, 145 101�8CD, 207, 208t
transparent budgeting program, mechanisms for participation,
72�74CD 97�99CD, 101�6CD, 109�13CD,
Rwanda, PRSP participation in, 65 199�201
methods of civic participation in
S�nchez de Lozada, Gonzalo, 93, 104, 106 budget process, 207, 208t
Sarrouh, Elissar, 234 monitoring and evaluation, 124CD

Index 267

resource allocation (budget preparation mechanisms for participation,
and approval) in, 70�71 201�2
ward committees, 100CDt, 102CDt, methods of civic participation in
109�10CD, 123�24CD budget process, 207, 209t
South America. See Latin America taxation in country case studies
Spahn, B., 248 Bangladesh, tax revenue increases in,
stakeholder initiation and control of 15CDf
programs, 142�43, 145, 178�79 Philippines real property tax system,
state effectiveness and participatory streamlining, 55CDb
budgeting, 243�46 Thailand, tax collection in, 133CD,
Sub-Saharan Africa, 10�11, 191�223 136�37CD, 136CDf, 137CDt
See also specific countries Thailand, 9, 17�18, 157
capacity building, 220 agendas, 134CDb, 139CDt
challenges faced in, 216�19 budget guides for citizens, 146CD
diversity and inclusiveness, 221 budget procedures, 129�30CD
government attitudes, role of, capacity building, 151CD
219, 221 civic commissions, 141�42CD, 145CD,
impact of participation in, 213�16 174�75
legal frameworks, 192�97, 219�20 civic forums, 132CD, 134CD,
lessons learned, 219�21 144�45CD, 177�78
local government fiscal framework, civil society in, 164
195�97 factors affecting participation,
local governments, 195�97 146�47CD
mechanisms of participation in, fiscal framework, 128�29CD, 129CDt
197�205 focus groups, 138CD, 142�43CD,
methods of civic participation in 143�44CD, 173�74
budget process, 205�11 government structure and
Sudan, 227, 232 responsibilities, 128CD
surveys Huai-Kapi TAO, 133�37CD, 136CDf,
Bangalore (India) report cards, 3CD, 137CDt, 177, 185, 186, 187
14CD, 39�40CD, 63CDb, 75�77, impact of programs, 133CD, 137CD,
78f, 170, 180 141CD, 143CD, 150CD, 151CDt,
in Thailand country case study, 180
135CDbt, 140CDt, 145�46CD Khon Kan City, 137�41CD, 173�74
Suwanmala, Charas, xix, 17�18, knowledge management network,
127�54CD, 185 need for, 151�52CD
Syria, 230b, 233, 239 mechanisms for participation,
143�46CD, 146CDt
Tanzania, 10, 191 Huai-Kapi TAO, 134�35CD
capacity building, 220 Kohn Kan City, 138�40CD
challenges faced in, 219 origins of, 147�48CD
fiscal framework, 196 Rayong City, 141�43CD, 142CDf
government attitudes, role of, 221 Suan Mon TAO, 132CD
impact of programs, 214 partnering organizations, 153CD
legal framework, 193�94 planning, 131CD, 134CD, 138CD,
local government, 196 141�42CD

268 Index

political, constitutional, and legislative impact of programs, 215
context, 160, 161t, 163 legal framework, 194
Rayong City, 141�43CD, 172, 174�75, local government, 196�97
186 mechanisms for participation, 202�3
Suan Mon TAO, 130�33CD, 130CDt, methods of civic participation in
177�78, 184�85, 186, 187 budget process, 208, 210t
success factors in, 183, 184�85, 186, 187 as model, 63CDb
summary diagnosis, 149CDt Ukraine, 7, 18, 128, 155�79CD
surveys, 135CDbt, 140CDt, 145�46CD budgeting principles, 158CD,
town hall meetings, 128�40CD, 159�60CD
145CD, 173�74 capacity building, 170�75CD
training needs, 152�53CD chief actors involved in, 174�75CD
trust, importance of, 248�49 decentralization in, 156�57CD
thematic programs, 38�39 factors influencing participation in,
think tanks in Middle East and North 167CD
Africa, 229, 230�31b government structure, 155�56CD,
Thomas, John Clayton, 78�79 176�77CDf
Toledo, Alejandro, 94 impact of programs in, 153�54t,
Torres Ribeiro, Ana Clara, 32, 100 168�69CD
town hall meetings. See public meetings information generating programs in,
training concerns in country case studies 136�37
Bangladesh, 19�21CD, 20CDt Kamyanets-Podilski town meetings,
Thailand, 152�53CD 141�42, 164�69CD
transparency and accountability local government
Asian programs improving, 165�71, ambiguous legal frameworks, 130
180�81 competence and autonomy,
citizen participation believed to 157�58CD
encourage, 60 fiscal framework, 131, 158�63CD,
Middle East and North African 159CDf, 160�62CDt
countries lacking, 232 structure, 176�77CDf
trust, importance of, 182, 248�49 People's Voice Project, 136�37
Tunisia, 235�36 public hearings, 141�42, 144,
Turkey, 240n1 163�70CD
typologies of participatory budgeting resource materials, 171�73CD
in Asia, 164�65 United Arab Emirates, 227
in Central and Eastern Europe, 134�35 United Nations
citizen participation levels, 61, 62t, Habitat II Conference, Istanbul, 93
246�47 participatory budgeting supported
McGee's typology, 134�35, 247 by, 96
public works/thematics, 36�39 United States
Centre for Budget and Policy
Uganda, 10, 191 Priorities, 254
challenges faced in, 217, 218 citizen summits in Washington, DC,
execution of budget, citizen 68�70
participation in, 72�73 Uruguay, 93, 117
fiscal framework, 196�97 USAID (U.S. Agency for International
government attitudes, role of, 221 Development), 109

Index 269

V�zquez, Tabar�, 117 Zambia, 10, 191
Venezuela, 93, 117 challenges faced in, 217�18, 219
fiscal framework, 197
Wagle, Swarnim, 77 impact of programs, 215
Wampler, Brian, xix, 2�4, 21�54, 61, legal framework, 194
65�66, 80 local government, 197
Weber, Max, 57 mechanisms for participation, 197,
Widmark, Charlotta, 105 203�4
Williams, Anthony, 69 methods of civic participation in
women budget process, 209�11, 211t
country case studies Zimbabwe, 10, 191
Bangladesh, 12CD challenges faced in, 217, 218
India, 45CDb fiscal framework, 197
in Middle East and North Africa, impact of programs, 215�16
234 legal framework, 192, 195
local government, 197
Yemen, 227, 232 mechanisms for participation, 204�5

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I n the past three or four decades, public finance theorists and practitioners have struggled to
identify and design institutional arrangements to help close the gap between the preferences
of voters and the mix of public services actually delivered. Participatory budgeting is potentially a
good approach.
Participatory Budgeting provides a firm foundation for the analysis of this approach, and it
offers unique lessons drawn from surveys in the five regions of the world. The accompanying
CD ROM presents specific country cases. This set clearly explains the equilibrium of forces needed
to make participatory budgeting a suitable mechanism for improving the decision-making process
for budget composition, and it underlines the desired roles of the different actors. The rich and
thorough analysis contained in this set will be, for years to come, a mandatory reference for
those who want to know the "state of the art" in this area of public finance.

-- Humberto Petrei, Professor of Public Finance, National University of Cordoba, Argentina; former
Executive Director, Inter-American Development Bank, Washington, DC, and Cabinet Adviser,
Ministry of the Economy, Argentina

T his is an excellent and timely work that articulates participatory budgeting and the devolution
of fiscal powers in developing countries. Congratulations to Anwar Shah, who is an interna-
tionally renowned economist and authority on federal and provincial�local fiscal relations, for
taking this commendable initiative.

-- George Mathew, Director, Institute of Social Sciences, New Delhi, India

ISBN 0-8213-6923-7