March 22, 2019

How to Spend It: A Focus on Participatory Budgeting

Summary of the Procivis Think Tank meeting of 21 March 2019 by Think Tank Director Costa Vayenas.

Technology is not only leading to disintermediation in the private sector, but it is also changing the machinery of government and the way in which citizens are interacting with their state. One area where this change is becoming increasingly visible is in the area of fiscal policy. Citizens are now able to participate directly in fiscal policy decisions in more places more often. More than 1,500 cities across the globe have removed responsibility for part of their budget from politicians and legislatures and handed spending decisions directly to the people.

At the Procivis Think Tank meeting of 21 March 2019, held at Trust Square in Zurich, we focused on how participatory budgeting works in Madrid and New York City. Cities have huge budgets: €5 billion in the case of Madrid and around $85 billion in the case of New York City, and are becoming more and more important to economies as a larger share of the world’s population migrate from rural areas. It seems logical, therefore, that the people would want more of a say about how some of their tax money is being spent in their own neighbourhoods.

Regular participants to our events, and those of you who have read my book Democracy in the Digital Age: How we vote and what we will vote about, will know that data from all over the world shows that the people are directly deciding on more things more often. Technology is boosting citizens’ ability to initiate policies and directly determine the outcome.

At our meeting, we were very pleased to have with us Miguel Arana Catania, Director, Citizen Participation, Transparency and Open Government Department of the Madrid City Council, to explain how this arrangement works in Madrid.

We also got a non-government insight into how the process works in the case of New York City, by Petr Bouška from “Institute H21”, whose know-how was used in several recent polls in New York City.

A powerful takeaway for me from Miguel Arana Catania’s presentation was “You can trust the people”. He explained that all the fears expressed by many politicians that the people would allocate the money to the “wrong” projects, have proven unfounded after three cycles of participatory budgeting. Despite that evidence, he says that the majority of politicians continue to oppose giving the people too much direct say on how the money should be allocated (80% of people say they’re ready for more participation. 80% of politicians say they’re not ready for more participation). It is for this reason that the share allocated for participatory budgeting tends to be in the 2% to 5% range in participating cities around the world.

Miguel Arana Catania explained how residents who did not live in Madrid could propose projects, but that only the residents could vote on them. When asked how to deal with small groups trying to capture the process, Miguel Arana Catania suggested that the best antidote was even more democracy: open the project proposal process as wide as possible, with as few restrictions on the people as possible.

I support Miguel Arana Catania’s theory on this. In my book, I had forecast that the heavy restrictions placed by the Dutch parliament on what the Dutch people are allowed to vote on in their initiatives would backfire. And that is what happened – they had to scrap their law.

To sum up Miguel Arana Catania’s view of his experience of participatory budgeting in Madrid: He provided an optimistic interpretation of a free people able to decide directly on more things.

In New York City, according to Petr Bouška, unlike in Madrid, participatory budgeting appeared to be more of a way to foster “inclusion”. The system in NYC was generally in operation in the less well-off districts (not in Manhattan, for example). The issues that people proposed for consideration tended to relate to smaller, local repair and infrastructure problems, rather than big new initiatives.

Petr Bouška’s data on the demographics of participants (more women vote in participatory budgeting he says) also differed from the demographic participation data from the Madrid City Council. This highlighted that participatory budgeting differs from city to city and even from district to district, and depends on a wide range of factors, including how proposals are made and what types of projects the people can actually vote on. Needless to say, cultural factors and the technological eco-system matter too.

Petr Bouška also shared his enthusiasm for applying participatory budgeting at the level of schools, which exposes students to this approach well before they reach the typical voting age. A similar pilot was held in Beijing. For me that best summarised the value of this bottom-up approach.

Last but not least, Petr Bouška explained how the introduction of more sophisticated voting options (allowing citizens to also select their second preferences and to allocate minus votes), has resulted in less polarized outcomes.

Where is this heading? If I can make a forecast, I would say that participatory budgeting will spread to more places, that we will start hearing about more districts where ordinary people get to decide on more things more often. The technological ecosystem will continue to get better and easier to use directly from people’s mobile devices. It seems like there’ll be lots of work ahead for passionate software developers for government in the digital age.