Direct democ­racy & lo­cal budgets

As Ukraine in­tro­duces par­tic­i­pa­tory bud­get­ing, what is likely to be the so­cial im­pact?

The Ukrainian Week - - CONTENTS - Maksym Vikhrov

Fis­cal de­cen­tral­iza­tion is start­ing to bear fruit: lo­cal budgets are not only op­er­at­ing in the black but in some cases are not keep­ing up with spend­ing. The State Trea­sury Ser­vice re­ports that lo­cal rev­enues to lo­cal budgets grew to UAH 192 bil­lion over 2017 and left a sur­plus of UAH 54.4bn. In 2018, the Fi­nance Min­istry re­ports, rev­enues to the gen­eral funds of lo­cal budgets grew 24% over Jan­uary-May, com­pared to the same pe­riod of 2017. In short, in­stead of a lack of fund­ing, the first is­sue now is how to ef­fec­tively man­age lo­cal re­sources. One of th­ese mech­a­nisms is pub­lic bud­get­ing, which was in­tro­duced in Ukraine in 2015.

The essence of this in­sti­tu­tion is that part of every lo­cal bud­get is set aside to im­ple­ment projects that the lo­cal com­mu­nity pro­poses and sup­ports. The pi­o­neer in pub­lic bud­get­ing was the Brazil­ian city of Porto Ale­gre, where this con­cept be­gan to be ap­plied in the late 1980s and was then ex­panded to more than 100 Brazil­ian cities in the fol­low­ing decade. Since then, the prac­tice has spread across the world. By 2015, par­tic­i­pa­tory budgets were the rule in nearly 1,500 lo­cal gov­ern­ments on all con­ti­nents. One of the big­gest par­tic­i­pa­tory budgets in the world is that of Paris: in 2014, it was nearly €18mn, sky­rock­et­ing to al­most €68mn in 2015, and jump­ing again, to just about €95mn, in 2016.

While the pro­ce­dural as­pects vary from lo­cale to lo­cal, the same ba­sic idea lies at its foun­da­tion: a com­mu­nity’s needs are best un­der­stood by its mem­bers, not of­fi­cials or even rep­re­sen­ta­tives elected by the com­mu­nity. In Ukraine, par­tic­i­pa­tory budgets were in­tro­duced with the support of Poland through the PAUCI foun­da­tion, a Pol­ish-Ukrainian co­op­er­a­tion ini­tia­tive. The first cities to pi­lot par­tic­i­pa­tory budgets were Ch­erni­hiv, Cherkasy and Poltava. By 2017, the NUKMA’s Cen­ter for In­no­va­tions De­vel­op­ment re­ported that par­tic­i­pa­tory budgets had been in­tro­duced by 91 lo­cal gov­ern­ments in 74 cities, 14 UTCs or uni­fied ter­ri­to­rial com­mu­ni­ties, 1 county and 1 oblast. Among oblast cen­ters, the big­gest budgets are in Kyiv and Odesa, with UAH 100mn each, Kharkiv with UAH 50mn, and Lviv with UAH 26mn. Of course, the size of lo­cal budgets de­pends on the lo­cal fi­nan­cial sit­u­a­tion and the will of the lo­cal govern­ment: for in­stance, Bila Tserkva’s 211,000 res­i­dents have a bud­get of UAH 7.2mn, whereas Vin­nyt­sia’s 327,000 have only UAH 7.0mn.

In par­tic­i­pa­tory bud­get­ing, the dis­tri­bu­tion of fund­ing is based on the prin­ci­ples of direct democ­racy. Af­ter draw­ing up a project, its au­thors have to gain a set num­ber of sig­na­tures in its support, af­ter which the project is sub­mit­ted for ex­pert eval­u­a­tion. If it meets es­tab­lished cri­te­ria, the project is sent to be voted on by lo­cals. In Kyiv, for ex­am­ple, peo­ple can vote for their pre­ferred projects through an on­line sys­tem us­ing the Kyiv-is­sued BankID card, us­ing a dig­i­tal sig­na­ture, or through an Ad­min­is­tra­tive Ser­vices Cen­ter. Those projects that col­lect enough votes are given fund­ing and are ex­pected to be im­ple­mented within a set time­frame.

Such projects can cover an al­most un­lim­ited range of ideas: ini­tia­tives can be about safety, roads and trans­port, en­ergy ef­fi­ciency, util­i­ties, cul­ture and tourism, the en­vi­ron­ment, ed­u­ca­tion, health­care, so­cial se­cu­rity, sports, and even IT. So far, par­tic­i­pa­tory bud­get­ing has demon­strated that those projects re­lated to ur­ban de­vel­op­ment, ed­u­ca­tion and sports are the most pop­u­lar. For in­stance, projects that re­ceived fund­ing from Kyiv’s 2017 par­tic­i­pa­tory bud­get went to ed­u­ca­tion, with 25% of the vote, sports with 20%, health­care with 13%, and so on (see The most pop­u­lar project cat­e­gories in Kyiv).

How ob­jec­tively the results of vot­ing on par­tic­i­pa­tory budgets re­flect the de­mands of the lo­cal com­mu­nity is an open ques­tion, as the pro­ce­dure does not re­quire an al­len­com­pass­ing plebiscite. Typ­i­cally, a rel­a­tively small por­tion of the pop­u­la­tion ac­tively par­tic­i­pates, as in mu­nic­i­pal elec­tions in many ma­ture democ­ra­cies. Even in Paris, it’s less than 10% of the lo­cal elec­torate. In Ukraine, it varies widely from city to city. In Kyiv, 50,813 lo­cals voted on projects in the par­tic­i­pa­tory bud­get over 2017, which is around 2% of the vot­ing-age pop­u­la­tion. The next par­tic­i­pa­tory bud­get saw more than dou­ble the lo­cals get in­volved, at 131,449 votes—although it’s hard to call even this num­ber, around 5%, rep­re­sen­ta­tive. Sim­i­lar pro­por­tions can be seen in many other cities. In Lviv, par­tic­i­pa­tion was a more sub­stan­tial 12%, but in Ch­er­nivtsi it was 6% and in Sumy 5%, and in Rivne, barely 2%. This gives am­mu­ni­tion to those who are crit­i­cal of the con­cept of par­tic­i­pa­tory budgets, be­cause the money is al­lo­cated de facto by a very small cir­cle of res­i­dents. Still, such at­tacks are not re­ally fair, given that op­por­tu­ni­ties to vote and to pro­mote their own projects are open to all. More­over th­ese par­tic­i­pa­tory budgets con­sti­tute a minis­cule part of the to­tal mu­nic­i­pal bud­get, and so the con­se­quences rarely af­fect the en­tire sys­tem.

The main prob­lem with par­tic­i­pa­tory budgets lies in a com­pletely dif­fer­ent as­pect and is re­lated to the un­tar­geted use of this mech­a­nism in the cur­rent cir­cum­stances, on the

The State Trea­sury Ser­vice re­ports that lo­cal rev­enues to lo­cal budgets grew to UAH 192 bil­lion over 2017 and left a sur­plus of UAH 54.4bn. In 2018, the Fi­nance Min­istry re­ports, rev­enues to the gen­eral funds of lo­cal budgets grew 24% over Jan­uary-May, com­pared to the same pe­riod of 2017

part of both com­mu­nity and state in­sti­tu­tions. Take the projects fi­nanced from the Kyiv par­tic­i­pa­tory bud­get for 2017. The open dig­i­tal lab Fablab, bi­cy­cle park­ing near Metro sta­tions or an underground mu­seum at Posh­tova Ploshcha are de­vel­op­ments that all Kyi­vans can po­ten­tially make use of. But the par­tic­i­pa­tory bud­get also went to a se­ri­ous num­ber of projects whose ben­e­fi­cia­ries were in­di­vid­ual in­sti­tu­tions such as schools, hos­pi­tals, kinder­gartens, and so on. Anal­y­sis shows that 24% of Kyiv’s par­tic­i­pa­tory bud­get went to state in­sti­tu­tions and an­other 22% went to com­mu­nity en­ti­ties. In this way, the lion’s share of funds al­lo­cated to city­wide projects went to pay for com­puter classes for in­di­vid­ual schools, to ren­o­vate lo­cal clubs, to re­place win­dows in hos­pi­tals, and the like.

Nor is Kyiv the only city fac­ing this prob­lem. Over 20172018, one Lviv school got it­self a play­ing field and re­placed its win­dows and out­side light­ing with money from the par­tic­i­pa­tory bud­get. Lviv ac­tivists say that schools and kinder­gartens “nabbed” as much as 90% of the par­tic­i­pa­tory bud­get in 2017. In Cherkasy, of 11 win­ning projects, only 2 did not in­volve com­mu­nity and state in­sti­tu­tions. Why th­ese par­tic­u­lar in­sti­tu­tions are so ac­tive in their com­mu­nity is no se­cret, as schools and hos­pi­tals have no prob­lems gath­er­ing sev­eral hun­dreds of votes from par­ents or pa­tients.

To what ex­tent this is de­lib­er­ate abuse and how broadly ad­min­is­tra­tive lever­age is be­ing ap­plied would have to be in­ves­ti­gated sep­a­rately. Clearly, this kind of prac­tice is against the spirit of par­tic­i­pa­tory bud­get­ing, which is that projects should be open to all. More­over, it sets up a sit­u­a­tion where fund­ing is du­pli­cated for pub­lic in­sti­tu­tions that are al­ready be­ing served by the lo­cal or state bud­get. The nec­es­sary rules and re­stric­tions need to be in­sti­tuted at the lo­cal level to limit the risk that par­tic­i­pa­tory budgets will turn into a com­pe­ti­tion among pub­lic in­sti­tu­tions for sup­ple­men­tary fund­ing. The rules for de­ter­min­ing win­ning projects are also in crit­i­cal need of reval­u­a­tion: in a sit­u­a­tion where par­tic­i­pa­tion is ex­tremely low, par­tic­i­pa­tory budgets can turn into an un­ex­pect­edly gen­er­ous bonus. For in­stance, in Ch­er­nivtsi nearly UAH 200,000 went to equip a school’s mul­ti­me­dia class based on only 554 votes, and an­other nearly UAH 300,000 for a lo­cal shoot­ing range was “won” by only 135 votes.

Still, th­ese are em­i­nently solv­able prob­lems: the process of ac­cept­ing project sub­mis­sions can be im­proved based on the lo­cal sit­u­a­tion, while pub­lic par­tic­i­pa­tion, as prac­tice has shown, will grow over time. In Paris, voter en­gage­ment in par­tic­i­pa­tory budgets grew from 40,000 in 2014 to 93,000 in 2016. Based on this, Ukraine is ac­tu­ally demon­strat­ing a very pos­i­tive dy­namic if the 50,913 Kyi­vans who voted in 2017 were al­ready up to 131,449 in mid-2018. Lviv has shown an even stronger growth trend: the 21,215 lo­cals who voted in 2016 more than tripled to 72,061 in 2017.

In the end, the main pos­i­tive ef­fect of par­tic­i­pa­tory budgets is not even the project them­selves, which could have been cov­ered with for­eign donor money, spon­sors or even cloud­fund­ing. The main thing is that par­tic­i­pa­tory budgets are a train­ing ground for direct democ­racy. Draw­ing up projects, search­ing for support among fel­low res­i­dents, par­tic­i­pat­ing in the vote, and over­see­ing im­ple­men­ta­tion—it would be hard to find a bet­ter school for civil self-govern­ment.

What’s more, par­tic­i­pa­tory bud­get­ing is how peo­ple can learn to lobby group in­ter­ests through direct democ­racy. The fact that pub­lic schools and kinder­gartens have been more ef­fec­tive at us­ing par­tic­i­pa­tory budgets tes­ti­fies not so much about the schools as about the state of civic so­ci­ety: that there is mas­sive lack of par­tic­i­pa­tion in the lives of the lo­cal com­mu­nity. This is the sense in which par­tic­i­pa­tory budgets have a far larger sig­nif­i­cance for the de­vel­op­ment of Ukraine’s democ­racy than for the de­vel­op­ment of in­di­vid­ual ur­ban ar­eas. Stud­ies of Euro­pean prac­tice have shown that the main results that can be an­tic­i­pated from par­tic­i­pa­tory bud­get­ing are the estab­lish­ment of lo­cal in­sti­tu­tions, self-or­ga­ni­za­tion at the com­mu­nity level, and stronger pub­lic over­sight—the very el­e­ments that are crit­i­cally lack­ing in Ukraine to­day.

Newspapers in English

Newspapers from Ukraine

© PressReader. All rights reserved.