Elena Krylova, DPI - Development Partnership International

This is a study of efforts to increase citizen participation in local budgeting in Ukraine, with the aim of providing practical recommendations for scaling up public engagement in budgetary processes. The paper examines three case studies – the town of Komsomolsk (Poltava oblast), the town of Kolomyia (Ivano-Frankivsk oblast) and the raion of Bahkchisarai (Autonomous Republic of Crimea). It presents findings with regard to practices of public engagement that directly or indirectly impact local budgets.

The three case studies demonstrate a number of tried and potential channels for citizen participation. These evolved under different budgetary circumstances and with different local societal and political dynamics. The experiences show that participatory initiatives can be driven by local authorities as well as by civil society actors.

Participatory mechanisms may vary in the mode of participation (delegated or direct), type of decision-making (consultative or binding), and the scope of decision-making (narrow, i.e. concentrating on particular or sectoral issues, or broad, focusing on general budget). The variety of forms of public participation that have a potential bearing on local budgeting include: participatory strategic planning; citizen engagement in developing programs and performance indicators under the Program Performance Budgeting tool; public budget hearings; citizen satisfaction surveys and public opinion polls; public advisory and supervision committees; citizen involvement in service self-provision schemes; community residents’ general assemblies, and independent budgetary analysis.

Each of the above-mentioned mechanisms on its own may not be able to produce an effect on the budget but in combination they hold the potential to secure budgetary accountability. Transparency and public access to accurate, comprehensive and timely information proves to be a precondition for constructive citizen engagement in the budgetary processes.

The study concludes that citizen participation in budgetary process to a large extent depends upon the capacity of local civil society to engage in governance issues, as well as the local government’s willingness to open budgets to the public and its ability to manage the participatory process. Its success is also determined by factors such as the availability of budgetary funds that can be spent at the discretion of municipalities, the degree of institutionalisation of participatory mechanisms, and the quality of participation they generate.

Greater public involvement in local budgeting processes and services provision can have a number of benefits and create win-win opportunities for government, civil society and the local business community. In a resource deficit situation it can help to improve local investment policies, find patterns of more efficient and effective use of scarce resources, attract external resources, and mobilize resources available from local communities.

Citizen engagement in the budgetary decision-making process can have manifold advantages for the government. It can: help to build a base of political support among the society; share responsibility for making decisions (particularly about unpopular reforms) and gain public support in implementing them; increase the level of public understanding of government spending constraints and a degree of trust in local authorities, and find unconventional ways of solving problems and cost-efficient means for delivering services. Participation also contributes to the emergence of an active citizenship, promotes transparency, and reduces corruption.  

Citizen engagement in the budgetary process also has a number of potential risks. Among others, these include the erosion of legitimacy among existing elected institutions in favour of less accountable civil society organizations; the capture of participatory processes by local elites, specifically the most vocal or organized groups or activists with narrow agendas; and raising participatory expectations beyond a sustainable level in the context of limited resources or deficient local government discretion over decision-making on budgetary issues.
Further promotion of participatory budgeting in Ukraine will require profound capacity building both vertically, among different levels of government (delineation of tasks and fiscal/ budgetary competences), and horizontally, among different actors at the local level (legislature, executive, civil society organizations, communities of citizens, media, etc.) 

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