By Dominic Rose
Dominic attended the 2016 World Bank and IMF Annual Meetings in Washington D.C. He is studying the Masters of Public Policy and Management at the Sir Walter Murdoch School of Public Policy and International Affairs.
Increasing citizen engagement in policy making and implementation is an effective way to increase policy legitimacy, rebuild citizen trust in institutions and better align policy decisions with community expectations and needs. Despite these benefits, economic decision-making remains largely the domain of experts and citizens have little to no opportunity to engage in this decision making.
This paper will present the case to address this democratic deficit within economic decision-making through the implementation of a participatory budget regime. Participatory budgeting has been used around the world to engage and empower citizens to have a direct say in the economic agenda-setting of their communities.
The case study of Porto Alegre will demonstrate how Western Australia could implement participatory budgeting. This case study will also note challenges for implementation and foreshadow how adequate planning and the use of technology could be used to solve these issues.
1. The West Australian government should make a significant commitment to implementing citizen engagement mechanisms in economic decision-making processes.
a. Political leaders must commit to engaging with these mechanisms and implementing their findings.
b. Public service leadership must foster a public service culture that values and prioritises citizen engagement within economic decision making.
2. The West Australian government should develop and implement a plan to introduce participatory budgeting using the experience of Porto Alegre, Brazil.
a. Special focus on engaging marginalised or underrepresented groups within society must be part of this plan.
b. The role of technology in breaking down barriers to participation should be a focus of this plan.
3. Civil society organisations (CSOs) should be included in the planning and implementation of participatory budgeting, and have a role to play in empowering citizens to take part in these new processes.
a. CSOs should build a relationship with the Citizens Economic Council project in the UK and begin preliminary planning for a similar body here.
A significant proportion of people around the world do not trust government institutions and the decisions they make (Edelman Trust Barometer 2016). During the recent campaign in the United Kingdom to leave the European Union, leading Brexit campaigner Michael Gove was asked to name a single economist who backed his campaign. He refused and simply said, “People in this country have had enough of experts” (Sparrow 2016).
Michael Gove’s statement, while ridiculed at the time, was ultimately correct. The rise of candidates who reject political and economic orthodoxy signal a growing distrust with the status quo (Sandel 2016). So do mobilisations against privatisation, austerity and free trade agreements. For experts, it would be easy to dismiss these events as mere populism or anti-intellectualism or even use them as proof that the vast majority of the population do not know what is best for them (York 2016). However doing so ignores the underlying current that ordinary people no longer feel they have a say in their community or society.
Public administration practitioners and theorists argue that the most effective way to counter this is by engaging people in policy-making, recognising their agency as citizens (Holmes 2011). Such an approach has been demonstrated to work in a number of policy areas but has not been embraced by economic policy makers. Public economics continues to be an area dominated by experts and terminology that excludes citizen participation (Bowman, Moran and Williams 2012).
This paper will argue that it is necessary to address the ‘democratic deficit’ in economic decision-making (RSA 2016). Citizen engagement in economic decision-making will lead to better policy outcomes and an increase in the legitimacy and trust citizens attach to decisions (Cabannes 2004; Tampubulon 2010). This paper recommends cultural change within government and the public sector, the use of participatory budgeting to achieve citizen engagement and an active role for civil society in economic decision making.
Citizen Engagement in Policy Making
Citizen engagement in policy making has a philosophical and practical justification (Holmes 2011). Philosophically, we live in a democracy that relies on citizen participation for its legitimacy. The more opportunities that exist for citizen participation, the stronger and more legitimate our democracy. Citizenship is a right and responsibility, and it separates our society from totalitarianism.
Practically, citizen engagement has been demonstrated to have a number of positive effects. Engaging citizens leads to a more efficient allocation of resources in line with social needs, builds trust in those decisions and the institutions that make them and can uncover new approaches and ways of thinking (World Bank 2008; OECD 2001). For example, citizen engagement in Brazil increased education project completion from 62.5% to 82.5% (Schneider and Goldfrank 2002, p 10).
Despite these justifications, political and public culture has not always embraced a citizen-centred approach to policy making. The New Public Management reforms of the 1990s created a top-down approach to policy-making, recasting citizens as consumers of public services. Citizen feedback within this paradigm was limited to their behaviour as consumers in the artificial marketplace of government services. New Public Management has decreased the cost of public policy making, but there is mixed research on whether it has delivered better outcomes (Andrews and van de Walle 2009).
Recommendation 1 recognises this culture represents an obstacle to implementing citizen engagement in policy making processes, particularly economic policy. A democratic society is not an economy, and people are citizens, not consumers. There must be a significant cultural change within the political landscape and public service to shift from a market-based mindset to a democratic mindset.
For this to occur, elected officials and public sector leaders must demonstrate a commitment to cultural change. Economic public policy making and delivery must be reorientated to focus on citizens as partners in policy development, not simply the target of said policies. Citizen engagement mechanisms must be meaningful and transparent and must be more than ‘ticking a box’ in the policy-making process (OECD 2001).
Participatory budgeting is a meaningful mechanism for governments to engage citizens in economic decision-making. While participatory budgeting can take many forms, the World Bank (2008, p 1) defines it as:
‘… a process by which citizens and/or civil society organisations participate directly in different phases of the preparation and monitoring of public budgets.’
Citizens are viewed as partners in economic decision-making and actively engaged for their views and priorities in the economic agenda-setting of the state (Sintomer, Herzberg and Rocke 2008). It begins with the acknowledgement that there are limited resources and that citizens must have a say in resource allocation. Using this feedback, government and the public sector create a yearly budget that is monitored year round by citizens.
Participatory budgeting originated in the Brazilian municipality of Porto Alegre and its use has spread across Brazil and the world, with many local councils and municipalities seeking to benefit from its use (Baiocchi and Ganuza 2014). Australian councils like Canada Bay and Melbourne City Council have implemented trials of participatory budgeting in their budget setting processes (Thompson 2012; RSA 2016).
Participatory budgeting has been demonstrated to have a number of benefits in line with general citizen engagement (Schneider and Goldfrank 2002). Economic decisions are considered more legitimate and citizens have greater trust in public institutions (Tampubolon 2010). Resources are distributed in a more equitable manner; going to those areas that require them as better off constituencies are willing to de-prioritise their demands in favour of those in need (Wampler 2010; Brautigam 2004). The use of participatory budgeting appears to decrease tax avoidance or delinquency, increase in public budgets and improve welfare indicators such as public health budgets and levels of infant mortality (Schnieder and Baquero 2006; Cabannes 2004; Touchton and Wampler 2014).
Challenges for Participatory Budgeting
Participatory budgeting faces the same cost, complexity and representativeness challenges that any form of citizen engagement in public policy faces (EIPP 2009, p 8-9).
Participatory budgeting is a time and resource intensive process for both the state and participants (EIPP 2009, p 8). Meaningful participation and consultation takes time and the cost of creating new institutions like citizen assemblies can lead to a significant short to medium turn cost for the state.
Economics is, perhaps needlessly, a complex topic. A criticism of public participation in complex and technical policy areas is that citizens do not possess the necessary knowledge to engage meaningfully, despite empirical evidence to the contrary (Surowiecki 2005).
Finally, there is an argument that democratic processes, like citizen engagement, are biased towards middle and upper-class citizens (Touchton and Wampler 2014). This bias occurs because they have time and ability to participate, while marginalised groups have more immediate concerns in their daily lives (Urbinati and Warren 2008).
The questions of cost, complexity and representativeness are significant challenges to effective citizen engagement and successful participatory budgeting. The case study will discuss how these challenges were dealt with in Porto Alegre and form the basis for a discussion of how a state like Western Australia might engage them.
Case Study – Porto Alegre
The Brazilian municipality of Porto Alegre is the home of participatory budgeting (World Bank 2008). Introduced by the newly elected Brazilian Workers Party, participatory budgeting began as an experiment in community consultation between the Government and civil society groups. Over time, formal guidelines and processes were created to establish the modern participatory process (Rocke 2014).
Within the Porto Alegre model, citizen engagement is sought on the capital investment element of the budget. Elements such as ongoing outlays, wages and interest payments are not considered. This means that from year to year there is a variable amount of money available for the process.
Participatory budgeting occurs year round as demonstrated in Figure 1. The World Bank (2008, p 15-16) review breaks this process down into six steps:
1. Review previous years investment priorities from the participatory budget process.
2. Establish Thematic Priorities.
From April to May, assemblies occur throughout the region based on locality and theme that are open to all citizens to establish their priorities.
3. Prioritise Investment Demands
Delegates from the assemblies deliberate how local priorities are transformed into policy demands.
4. New Councillors take office
Newly elected councillors take office and work with delegates to build a consensus on investment priorities.
5. Priorities are incorporated into the budget and reported on
The agreed upon priorities are incorporated into the city budget and sent to the local legislature for approval. Decisions are then reported back to the community.
The final step of the process is a review of how it unfolded, with rule changes and reforms proposed for the coming year.
While citizen engagement was initially slow, participatory budgeting has become a popular and institutionalised process within Porto Alegre’s economic decision making (Rocke 2014). Participatory budgeting in Porto Alegre has been linked to public health improvements, increased spending on health and education and greater civic participation (Schneider and Goldfrank 2008).
Policy Recommendations for Western Australia
Recommendation 1 – Leadership and Culture
Implementing policies for budgetary participation requires political leadership and a strong commitment to the principles of citizen engagement (Touchton and Wampler 2014; Baiocci and Ganuza 2014). Political leadership is crucial; those municipalities with more committed political leadership saw better results. For participatory budgeting to succeed in Western Australia, political leadership is paramount. This leadership is a necessary precondition for the cultural change discussed in Recommendation 1.
Recommendation 2 – Planning and Strategy
It is important to acknowledge Porto Alegre and Western Australia represent substantially different socio-economic contexts. Compared to Porto Alegre, Western Australia’s population is dispersed across a larger geographical area, has lower income inequality and scores higher on overall social wellbeing indicators (Fletcher 2013). Western Australia’s budget revenues sit at roughly $23 billion, which is significantly more than in Porto Alegre (World Bank 2008).
The planning in Recommendation 2 is important because of these differences (Davidson and Elstub 2014). Citizens in Porto Alegre and Perth are not homogenous and will not have the same values or expectations. Citizens in Porto Alegre are concerned with connecting sanitation and basic health care. These issues would not have the same resonance in Western Australia.
Recommendation 2a – Engaging Marginalised Groups
Research shows that participatory budgeting does not have the same middle and upper-class bias of most democratic forums (Touchton and Wampler 2014). However, the World Bank (2008) found certain marginalised groups such as those in extreme poverty were underrepresented in Porto Alegre.
In Western Australia indigenous groups, young people, and those based in rural and remote areas run the risk of unfair representation (Brautigam 2004). A comprehensive plan to identify and engage underrepresented groups is a necessary part of planning in Recommendation 2.
Recommendation 2b - What role can technology play?
The case study of Porto Alegre did not consider the role that technology can play in fostering citizen engagement. Citizen engagement literature has identified technology as a tool for collecting feedback from citizens and breaking down barriers to participation although it cannot replace offline consultation (Wittemeyer et al.2014; Lim and Oh 2016).
Given a trial in Western Australia would operate on a large scale, smartphones and social media may overcome challenges associated with cost and representation (Haller and Faulkner 2012).
Recommendation 3 - The Role of Civil Society
Recommendation 3 acknowledges civil society organisations (CSOs) such as trade unions, social welfare organisations and activist organisations have an important role to play in citizen engagement (Wampler 2010).
CSOs have a unique responsibility to engage with marginalised groups and build capacity. For example, trade unions represent workers from culturally and linguistically diverse (CALD) backgrounds, as well as women and low paid workers. These organisations are best placed to engage and foster feedback mechanisms.
Participatory budgeting also has the potential to create new forms of civil society organisations (Wampler 2015). One model is the UK’s Citizens’ Economic Council (RSA 2016) where sixty representative citizens provide feedback on economic policy. A key component of this project is educating participants in economic theory and using facilitators to draw out feedback. The Citizens Economic Council is one way new CSOs can overcome the barriers of cost, complexity and representativeness.
The experience of Porto Alegre demonstrates the benefits of challenging economic orthodoxy in a constructive way and provides a model for introducing such reforms in Western Australia (Sintomer, Herxberg and Rocke 2008). Attempts to introduce participatory budgeting in Brazil at a State level has had mixed success based on how closely they follow the above recommendations (Scheider and Goldfrank 2002).
Western Australia is uniquely placed to learn from these examples. Western Australia’s existing state constituencies provide an established structure for grassroots engagement, there is a relatively well-resourced and engaged civil society to support the process, and there is sufficient discretionary spending within the State budget to benefit from participatory budgeting. With political leadership and sufficient planning, participatory budgeting represents an opportunity to rebuild trust within economic decision making in Western Australia.
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