Keywords

3.1 Introduction

Co-production in the public realm is not necessarily limited to the delivery of public services, and extends to the full chain of service planning, design, managing, delivering, monitoring, and evaluation activities (Bovaird 2007; Sicilia et al. 2015). In particular, co-planning refers to collaborations and networking between the public sector and its stakeholders (i.e., citizens, associations, interest groups, etc.), aimed at identifying what services need to be provided to answer stakeholder needs, whereas co-design refers to interactions in decision-making processes on operational production of services and their evaluation (Pollitt et al. 2006).

This chapter is aimed at looking at participatory budgeting as a form of co-production, and, more specifically, as a form of co-planning and co-design. Specifically, it proposes a framework, which identifies the conditions for successfully implementing participatory budgeting as a form of co-production.

Participatory budgeting is “a decision-making process through which citizens deliberate and negotiate over the distribution of public resources” (Wampler 2007, p. 21). Thus, through participatory budgeting, citizens have the opportunity to influence public decisions on the allocation of public resources (see also Krenjova and Raudla 2013; Lerner 2011; Rossmann and Shanahan 2012; Steccolini 2004; Zhang and Liao 2011). This can allow prioritizing social issues and holding government accountable for how resources are spent.

Participatory budgeting is seen as an important tool for increasing democracy and reaching greater political involvement at the local level (Ebdon and Franklin 2006; Pinnington et al. 2009; Lerner 2011; Rossmann and Shanahan 2012). It may also promote greater levels of accountability and transparency (Pinnington et al. 2009; Lerner 2011; Krenjova and Raudla 2013), reducing opportunities for corruption (Pinnington et al. 2009). It is furthermore associated with greater efficiency and with making people more connected to their city (Lerner 2011).

The use of participatory budgeting began in 1989 in the Municipality of Porto Alegre, Brazil, from the political campaign based on democratic participation of the Workers’ Party. The aim of that experience was to improve the conditions of less affluent citizens, increasing the levels of public spending to be allocated for answering their needs. Since then, at least 1500 experiences of participatory budgeting have developed around the world (Baiocchi and Ganuza 2014).

There is no standard model of participatory budgeting (Sintomer et al. 2008); extant experiences are different based on the political, social and economic contexts in which they developed. In general terms, participatory budgeting experiences share the preliminary identification of needs and priorities, a deliberation, a decision making process and the implementation of projects selected by citizens (Pinnington et al. 2009; Lerner 2011). However, differences may exist on the way citizens are involved during the preparation of the budget, and on how, after the approval of the budget, the projects are implemented (Sintomer et al. 2008; Krenjova and Raudla 2013).

Though participatory budgeting has gained increased attention in public administration literature in recent years, research in this area still remains limited (Zhang and Liao 2011) and tends to ignore its potential as a form of co-production (or, more specifically, co-planning and co-design). Indeed, public management scholars interested in this topic have mainly focused on the antecedents of participatory budgeting, the reasons leading to its adoption, the processes of implementation, the outcomes of participation.

This work is aimed at filling this gap. In particular, from the theoretical point of view, we aim at contributing to the co-production literature by providing further insights on the conditions that can lead to the successful implementation of participatory budgeting and that should be considered when looking at participatory budgeting from the perspective of co-production. From a managerial perspective, the chapter provides indications for organizations that intend to encourage citizens to co-produce public budgets and to increase the effectiveness of the process in terms of democracy, effectiveness and quality of the decision making process. More specifically, we identify four conditions of participatory budgeting that may prove helpful for successfully implementing participatory budgeting as a form of co-production: interaction, inclusiveness, responsiveness and representation.

The chapter is organized as follows. Section 3.2 briefly discusses the main features of participatory budgeting and under which conditions it can be conceived as a form of co-production, more precisely of co-planning and co-design. Section 3.3 discusses the four conditions for the successful implementation of participatory budgeting. Section 3.4 draws some conclusions.

3.2 Co-planning, Co-design and Participatory Budgeting

The phenomena concerning the engagement of individuals and community in the public service cycle have attracted increasing attention, especially in the wake of public governance movements and the recent global financial crisis. However, they have mainly focused on co-delivery, whereas much less attention has been devoted to the other facets of co-production, including co-planning and co-design that is the main object of this chapter.

In particular, co-planning and co-design refer to situations in which government and its agencies cooperate with the public (i.e., citizens, associations, interest groups, etc.) in identifying what services need to be provided to answer stakeholders’ needs and in defining their characteristics. This type of involvement of non-governmental actors can take different forms and implies the use of different tools. In this chapter attention is paid to participatory budgeting.

Participatory budgeting can be seen as a form of co-planning and co-design, which entails the direct involvement of citizens on the one hand in the allocation of public resources to different public programs, services and investments and on the other in the choice of how to implement those programs and deliver those services (Bovaird 2007; Bovaird and Loeffler 2012). This is different from traditional budgeting processes where choices have usually been in the hands of elected officials, and thus citizens’ choices are mediated through their representatives. On the contrary, participatory budgeting requires citizens to be directly involved in budgeting processes and responsible for decisions about budget allocations (Pinnington et al. 2009; Zhang and Yang 2009; Lerner 2011; Krenjova and Raudla 2013).

Extant literature on participatory budgeting does not generally look at participatory budgeting from the perspective of co-production, but rather describes a variety of experiences in which the degree of participation and involvement and the types of processes of participation vary widely.

As shown in Fig. 3.1, the intensity of participation of citizens in budgeting decisions may differ depending on the characteristics of the deliberation process and the distribution of responsibility between governments and citizens for the final decision. In particular, it is possible to distinguish three ladders of participation (pseudo, partial and full) (Moynihan 2007), according to which the level of co-planning and co-design varies ranging from very weak to strong.

Fig. 3.1
figure 1

Citizens’ participation, co-planning and co-design. Source Elaboration from Moynihan (2007)

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Pseudo participation occurs when citizens only participate to open meetings, in which they mainly receive information materials from governments on priorities and available alternatives to cope with emerging problems. In some participatory budgeting processes, citizens can, for example, be invited to attend events such as public hearings or community meetings. The deliberation process is characterized by the role of citizens mainly as recipients of information, whereas government autonomously takes the final decision. For these reasons, the level of co-planning and co-design is particularly weak, almost non-existent.

Partial participation implies citizens’ consultation on public decision, thus with only a limited impact on public policy. For example, they may be invited to express their opinions through surveys or other tools aimed at catching their preferences on a set of pre-set alternatives (Ebdon and Franklin 2004, 2006). The fact that citizens are involved only to provide one-way comments limits their level of engagement and the possibility to influence effectively public decision. Both the participants and the government may affect the final decision, even if the government can decide to neglect the inputs received by citizens. Partial participation can be seen as characterized by a medium level of co-planning and co-design.

Finally, full participation occurs when citizens are massively involved in the development of the alternatives and the identification of solutions. This is the result of fruitful dialogues between the public administration and citizens and among the citizens themselves. Citizens have the chance not only to express but also to develop their preferences, which are not restricted to specific alternatives (i.e., those previously identified by the public administration) but regard public services and investments more in general. Moreover, the final decision is under the responsibility of citizens that are required to decide what to do with public money. This results in a strong level of co-planning and co-design.

In the light of the above considerations, we argue that only when the participation is full, participatory budgeting can be seen as an effective form of co-planning and co-design. This implies that adopting a co-production perspective to participatory budgeting means taking into consideration that co-planning and co-design will require the establishment, care and maintenance on the one hand of the relationship between the public administration and the citizens, and on the other the relationship among the citizens themselves. However, we also recognize that not every decision may necessarily require full participation and thus become a strong form of co-planning. Depending on the type of decision (for example, degree of controversy over it, amount of expenditure, urgency) and the context (political fragmentation and stability, level of homogeneity of citizens’ preferences, etc.) different degrees of participation may be advisable or desirable. In this chapter we focus on the case of full participation in decisions related to allocation of public money.

The following section presents a framework, which, considering simultaneously the administration and the citizens’ sides of participatory budgeting, identifies those conditions that allow successfully implementing the participatory budgeting as a form of co-production.

3.3 Participatory Budgeting as Co-planning and Co-design: Conditions for Success

Participatory budgeting, as a co-planning and co-design exercise, involves the establishment and nurturing of a complex web of relationships. Put simply, on the one hand it involves the relationship between the public administration and the citizens and stakeholders. On the other, it involves a web of relationships among the citizens. Under the former perspective, public administrations should ensure that all the citizens that are potentially interested in the process are included, and that continuous communication and interaction is ensured with them. Under the latter, i.e., the citizens’ perspective, the participatory process must ensure both representation of the various interests and needs at stake and responsiveness to them. As previously stated, the four conditions for success that should be considered when looking at participatory budgeting from the perspective of co-production are thus Interaction, Inclusiveness, Responsiveness and Representation and are further discussed below.

3.3.1 Inclusiveness and Interaction

Inclusiveness refers to “the openness of the political system and the degree of members’ participation” (Hong 2015, p. 573). It is considered a central condition for achieving democratic values and for guaranteeing a more equal allocation of resources and advancing social values (Feldman and Khademian 2007; Wampler 2007; Rossmann and Shanahan 2012). Indeed, through participatory mechanisms, traditionally excluded groups and citizens have access to decision-making venues (Shah 2007) and people can share information from different perspectives and interests (Feldman and Khademian 2007; Nabatchi 2012). Moreover, inclusiveness is also a condition to ensure a wider representation.

Both cons and pros of inclusiveness have been identified and largely debated in the literature. On the one hand, as Hong (2015) points out, greater inclusiveness may mean expanding the number of citizens involved, reducing individual sense of ownership of the process and commitment. In addition, this may increase the costs of the process (e.g., larger spaces or platforms for discussion, more information processing, longer meetings, etc. may be needed), and the need for more information, thus possibly reducing its efficiency (Moynihan 2007). Indeed, as interests that are more diverse are represented, reaching consensus may become longer and more difficult.

On the other hand, inclusiveness may enhance the deliberation process by yielding a greater number of proposals as well as resources, including knowledge and commitment (Bryson et al. 2013). Moreover, it can generate higher creativity improving the quality of the ideas discussed and of the decision taken (Hong 2015), thus positively affecting responsiveness.

Although important, inclusiveness may result difficult to achieve. Indeed, not only “women, vulnerable groups, and people living in remote areas are easily excluded” (Fölscher 2007, p. 144), but further barriers to citizens’ participation also exist. The latter can depend both on the citizens’ willingness to participate and/or on the ability of the government to communicate with its citizens. According to Rossmann and Shanahan (2012), the citizens’ unwillingness to participate may be due to cynicism, apathy and/or to the lack of social connectedness and of technical information. For example, they may prefer to be excluded from participatory processes when they feel powerless, i.e., they think they cannot make a difference in such processes.

Governments can promote inclusiveness in the selection stage, i.e., ensuring that citizens join the process presenting projects, participating to debates and voting. From this perspective, five main criteria exist for identifying and including the actors who participate in public decision-making processes (see Fung 2006) involving:

  1. (i)

    Openness to all who wish to attend largely based on self-selection of the general population;

  2. (ii)

    Selective recruitment, based on the involvement of community organizers or incentives (e.g., gift cards, transportation, meals) to ensure participation by those people who would otherwise be less likely to participate, for practical as well as motivational reasons (see also Nabatchi 2012; Nabatchi and Blomgren Amsler 2014);

  3. (iii)

    Random selection of participants;

  4. (iv)

    Invitation of lay stakeholders in public discussion and decision, i.e., unpaid citizens who have strong interest in specific public issues and thus are willing to participate, representing those who have similar interest but decide not to participate;

  5. (v)

    Participation of professional stakeholders, i.e., representatives of organized interests or public officials.

When evaluating possible ways to select and involve citizens, one crucial decision may refer to the choice of resorting to online engagement, which may enhance efficiency, but also affect inclusion of less “digitalized” categories of citizens (Nabatchi and Blomgren Amsler 2014).

In the deliberation process, inclusiveness can be fostered in a number of ways, including availability of translation, childcare, transportation assistance (Bryson et al. 2013, p. 29) and diversity of fora for discussion (physical vs. online, diffused in different geographic areas, at different times, etc.). A typical response to the need to ensure that not only citizens are present, but also actively participate in the decisions, is the provision of information and the reliance on facilitators. Facilitators can be important in reducing or managing conflict, while at the same time ensuring that different views and voices are expressed and heard, and that virtually every participant can express her ideas in a respectful climate (Nabatchi 2012; Bryson et al. 2013).

Interaction refers to the establishment of a two-way channel of communication, continuously adjusted over time, between the public administration and its citizens.

Some scholars have argued that participation is most beneficial when characterized by a two-way communication (Ebdon and Franklin 2004) and that citizens’ participation “requires dialogue and deliberation between government and citizens” (Zhang and Liao 2011, p. 284). Two-way communication is “the bidirectional flow of information, or the transfer of information wherein individuals act as both senders and receivers” (Nabatchi 2012).

While “surveys and public hearings tend to provide one-way information regarding citizen opinions” (Ebdon and Franklin 2006, p. 442) and the latter, particularly, tend to be used to “defend agency decision rather than to involve the public” in discussion (Beierle 1998, p. 21), only two-way communication may allow citizens’ voices and needs to be actually taken into consideration. Thus, participatory budgeting should not be a symbolic “exercise in styles” but a process where the budget is actually “constructed” in an interactive way through a continuous and creative exchange of ideas among citizens and between the administration and the citizens. An interactive approach requires that citizens identify local problems and needs and then discuss them with politicians and civil servants in order to figure out the feasibility of projects and to find how to solve all the stumbling blocks. For example, in the experience of the Municipality of Grottamare in Italy delegates elected by citizens in each of the seven territorial districts were involved in a deliberation process and they discussed with civil servants as well as with politicians all the emerging issues and classified them in unresolved, directly resolved, district issues and municipal issues (Bassoli 2012).

Interaction may support a learning process both for citizens and for public administrations. The former are educated to play their role as co-planners because they learn about how budgeting process works and the rules, constraints and procedures related to building a new bike path or renovating a school. This learning process requires that public administrations provide citizens with information that has traditionally been available only to civil servants, increasing the degree of transparency (Wampler 2007). For example, in Porto Alegre, civil servants played a relevant role in this respect, organizing meetings, providing information to citizens about their choices, and offering technical analyses for project proposals (Moynihan 2007).

Among the mechanisms that the public administration may employ to this end, making information available to citizens seems to be an effective way to improve the quality of decisions (Nabatchi 2012; Nabatchi and Blomgren Amsler 2014). Information should be targeted to the different kind of citizens, being provided in various formats and through a variety of sources (Bryson et al. 2013). It may also be provided by the public administration organizing the participatory budgeting, or the public administration can assume a catalyst role for information, by collecting and incentivizing the circulation of proposals and projects developed by other subjects participating to the process. However, in this latter case, a problem may arise with the reliability of data and sources and the public administration may have to act as guarantor of the quality and reliability of data and to ensure that trust is built among the parties involved.

From the perspective of the public administration, through a two-way communication with citizens, governments also have access to new source of information that can lead to a better understanding of the needs of the community and to innovative ways to delivery services with an improvement of allocative or technical efficiency (Moynihan 2007). In this vein, interaction is a dimension of a co-productive approach to participatory budgeting that allows bringing together new information and new ways of understanding problems and addressing them. This takes on even more importance when budget squeezes reduce the resources at disposal and require that they be used effectively, limiting delays and mistakes.

However, interaction and its beneficial effects manifest themselves when participatory budgeting is not a one-time-only event (Nabatchi and Blomgren Amsler 2014). Nevertheless, rarely have local governments institutionalized their experiences of participatory budgeting, often relying on it only to generate an immediate return in terms of consensus on the political group that supports its implementation. To move towards a more stable and durable experience of participatory budgeting there is a need to go beyond ideological or personal reasons for its implementation and lay the conditions for its institutionalization. This requires continuity of commitment over time, irrespective of political shifts in the administration, which is facilitated if such commitment becomes credible and is embodied in physical spaces and structures (offices, meeting areas, etc.), processes and routines, as well as identifiable skills and capabilities. Through this continuity, trust can be built over time among citizens and between the citizenry and the administration, and, in turn, this will represent the needed condition for an enhanced interaction.

3.3.2 Representation and Responsiveness

Inclusiveness and interaction in the process are central in the relationship between public organizations and their citizens. However, participatory budgeting entails not only relationships between public administrations and citizens, but also among citizens. Thus, the final success of the participatory process will depend not only on how well the relationship between the administration and the citizens is managed, but also on how the citizens perceive their interaction among them. Moreover, the extent to which citizens feel that their own interests and needs are represented and find a suitable response are key factors for the success. Thus, responsiveness and representation are two other crucial dimensions to be taken into consideration in participatory budgeting.

Representation refers to the extent to which different interests, views and power positions have voice in the process. Perceptions that the process is not representing fairly the interests at stake may de-legitimize the process and reduce commitment (Barbera et al. 2014).

Representation requires that decisions on how to spend public money be taken mainly through open and inclusive debates. However, although being a critical element in this respect, inclusiveness of the process is not sufficient per se to ensure representation. Indeed, representation will require the choice of a way to ensure that voice and views are expressed, and of ways to avoid or reduce conflict, while selecting and compromising on possible solutions. Looking at the criteria discussed above for ensuring inclusiveness, they may produce different effects in terms of representation. While random selection method seems to be the best way to guarantee “descriptive representativeness” (Fung 2006, 68), self-selection may lead only wealthier and better-educated people to participate, or a biased representation of interests. Invitation of lay or professional stakeholders may, on the other hand, put into question their independence and representativeness and suggest that citizens remain distant from the places where decisions are taken.

As Shah (2007) observes, the more the decisions are left to a portion of the interested population, and the more appropriate mechanisms for ensuring fair representation and accountability therein are needed. A combination of inclusion systems may prove effective if there is evidence that not all the interests would be otherwise represented, for example openness to all interested citizens with additional selective recruitment or invitation of lay stakeholders. The reliance on professional stakeholders or intermediate bodies that represent groups of stakeholders will require ex-ante legitimation of such bodies, not only in terms of competencies, but also of having a sufficient base of consensus and being in continuous contact and communication with their stakeholders, to avoid their becoming self-referential.

Hopefully, a process where representation has been satisfactory will give origin to more responsive proposals. Indeed, representation is important per se, but also as it has a complex relationship with responsiveness, i.e., the attitude of projects presented to address and answer not only to parochial needs, but also to the collective needs and expectations.

When citizens act as co-planners they bring to the table their own perspectives, sensibilities, values and needs but, at the same time, they are required to develop a broader awareness and better understanding of the collective needs. For example, at the beginning of the process most projects and proposals may reflect parochial and distinctive needs of specific groups of people. Only when these scattered instances are translated into projects with broader scope, suited to deal with problems perceived by the community as a whole, responsiveness is achieved.

One way to address this is the institutionalization of participatory experiences. Indeed, when participatory budgeting is a stable experience, citizens become more collaborative and prone to sacrifice their particular and immediate interest for the common good and a longer-term view. This may also require mechanisms to ensure that the right balance between collective and more targeted needs (i.e., a more parochial perspective) is achieved.

In the shorter term, the selection of the projects should be the result not only of voting, but debate, whereby facilitators and the involvement of experts or professionals from the administration in the process may support the development of solutions that are largely shared, but also technically feasible and the most suitable to meet the relevant needs. When the projects are selected using voting mechanisms it seems that good results depend more on the intensive campaign made by possible beneficiaries rather than on the usefulness of the project for the community as a whole. An additional important condition for ensuring responsiveness is the availability of information, since this has been proved to enhance the quality of decisions (Nabatchi 2012). The information can be provided in traditional ways (books, papers), online, but also relying on expert involvement in presentations and discussions.

Whatever the mechanisms identified to ensure responsiveness, the rules underlying the participatory process should be made clear from the outset (Fölscher 2007). At the same time, the public administration should be strongly committed to the implementation of participatory processes and thus interaction appears to be an important condition for ensuring responsiveness. Indeed, as Ackerman (2013, p. 109) has noted, “governments can only get back as much as they put into efforts to activate civil society participation for accountability (…). Without such full involvement by the government, ‘participation’ schemes can easily end up only strengthening previously existing clientelistic networks and unbalanced intra-community power relations”.

3.4 Conclusion

Participatory budgeting represents an important form of co-production, or, more specifically, co-planning and co-design (Bovaird 2007). This has also been addressed by some governments (i.e., UK) as well as some empirical studies. However, while in the academic domain a number of studies have looked at the reasons for its adoption, its processes and consequences, most of them have focused on the point of view of the governments, officials and politicians adopting it and have not looked at it from the perspective of co-production literature. Much less attention has been devoted to looking at the views of citizens as co-producers (or co-planners) participating in the budgetary process, thus embracing this idea coming also from outside the academia.

In this work we have argued that, though there exist different forms of participatory budgeting, if it is to be seen as a co-production form, it must satisfy four conditions for success: interaction, inclusiveness, representation and responsiveness.

Interaction and inclusiveness should shape the relationship between the public administration and its citizens, by building a virtuous two-way dialogue with citizens during the process and guaranteeing a high degree of transparency and involvement. Representation and responsiveness should become central in shaping the relationship among citizens, through the creation of mechanisms that ensure equal access to all the interests at stake while, at the same time, ensuring the quality of the final decisions, in a way that they translate into actual responses to community needs.

The chapter provides examples and reflections on how to promote greater interaction, inclusiveness, responsiveness and representation, which public administrations may find useful in successfully implementing participatory budgeting as a form of co-production. Its contribution is thus twofold.

Under a theoretical perspective, this chapter identifies the conditions for ensuring that participatory budgeting becomes a form of co-production, thus providing further support for Bovaird’s (2007) argument that participatory budgeting can be useful at the planning and design stages. More specifically, a model for considering participatory budgeting as a form of co-production is proposed. Under a practical and policy perspective, it provides specific criteria and tools for increasing the level of participation in decision-making processes regarding the allocation of public money.