Engaging the Public in National Budgeting

GOV/PGC/SBO(2007)4

Engaging the Public in National Budgeting:

A Non-Governmental Perspective

WORKING DRAFT – NOT FOR QUOTATION

Summary

1.Public engagement in civic affairs is both “means” and “ends” of well-functioning government.It is an essential component of efforts to hold public officials accountable for their actions and to build effective, transparent and efficient government.It is the result of a strong relationship between citizens and their government, which is more likely to occur if the public feels that government serves their needs and is open to their views.

2.The goal of increasing the public’s level of engagement is becoming a priority of those concerned with improving government, including multinational institutions such as the Organisation for Economic Cooperation and Development (OECD), the United Nations (UN), and the World Bank, government officials, civil society organizations and academic scholars.[1]Although civil and political contexts differ from country to country, public engagement activities share the same basic objectives of making government work better for its people by bringing government closer to citizens, improving the accountability of the public sector, overcoming mistrust between people and their elected leaders and instilling a stronger sense of national purpose and common direction.

3.Many initiatives to increase civic engagement and improve social accountability focus on public budgets.Budgeting is a fundamental activity of government that symbolizes the agreement between people and their government-- private resources in exchange for public services and benefits.Citizens rightfully expect public budgets to be fair, equitable and transparent in support of national priorities and objectives. As long as they believe that the corruption, inefficiency and waste at the root of budget problems, taxpayers may be unwilling to accept tough policy choices-- including structural program reforms, tax increases and spending cuts.Their resistance is reinforced by feelings that government is not interested in their views and does not represent their interests.If the electorate becomes more engaged in the budget debate it might find that some of its cynicism and lack of trust dissipates.

4.This paper takes a practical look at what public officials can do to encourage broader public engagement in national budget policy.[2]It begins with the assumption that the lack of an engaged public is counterproductive to the budget debate for two reasons: the alternative to an engaged public is not an apathetic one, but one that is potentially hostile to constructive policy change; and civic engagement is fundamental to social accountability efforts that strengthen the transparency, openness and responsiveness of government.

5.Part 1 adopts a definition of civic engagement activities that extends beyond activities conducted by government to engage citizens.The OECD framework for government-citizen interaction defines three types of activities: information, consultation and active participation.[3]Only the third type of activity is considered engagement.At the national level, the majority of interactions between governments and citizens fall under the first two categories -- information and consultation.That is because mechanisms to permit citizens to participate directly in decision making are hard to design, implement and sustain on an on-going basis.

6.This paper suggests that public engagement can be viewed from a different perspective. Government-structured or initiated processes or events involving citizens are one form of engagement.But “public engagement” also defines a desired quality of citizens’ attitudes towards government and public policy public. That form of engagement occurs when citizens devote their time and attention to learning, thinking and talking about the issues. Under that broader definition, efforts by budget officials, for example, that enable citizens to become more knowledgeable about budget and fiscal policy, along with other activities that stimulate a richer public discourse -- whether initiated by government or not -- are forms of public engagement. They also provide opportunities for mutual learning: elected representatives and government officials can tap into the experiences and expertise of the public; and citizens can better understand the complexities and dilemmas of policy-making.

7.Because technology is a powerful tool that can reach a wide audience on a cost-effective basis, Part 2 of the paper focuses on the use of information and communications technology. Using a small number of examples,[4] this paper shows that budget officials are already making use of the Internet to educate and engage the public, pursuing more effective techniques to present budget information and adopting innovative approaches that entertain while they educate. The paper also provides examples of public engagement strategies of non-governmental organizations, which at the national level are crucial to reaching wide audiences. Finally, the paper observes official effort to engage the public must be approached carefully. Such attempts could backfire if superficial, overtly partisan (or political) or poorly conceived. On one hand, there is a danger on one hand of raising expectations that cannot be addressed and on the other hand of creating a process that has no real impact.In either case, levels of public cynicism and mistrust of government could end up rising.

Introduction

8.Budgeting is one of the most complicated and controversial tasks of government. Few voters have the time -- even if they have the inclination -- to become sufficiently knowledgeable about the complex economic, social and political issues embedded in decisions related to national budgets. In addition, the practical challenges of securing representative and widespread public participation in the budget process are significant. For those reasons, among others, greater civic engagement in budgeting might seem to offer public officials a great deal more pain with very little gain.

Or would it?

9.Budget experts everywhere share the same complaint about their public’s seemingly unending appetite for more public services and benefits without a corresponding willingness to pay for them.The public apparently fails to understand the need for short-term fiscal tradeoffs, let alone grasp the projected consequences of demographic changes on the long-term budget outlook. While they welcome spending that provides visible and immediate benefits to themselves or to their region, many voters seem blind to the need for essential public goods and resist paying for them.While fiscal challenges are not technically insurmountable, policy experts know that good policy solutions mean little if popular support is absent.

10.To gain that support, public authorities from around the world, often in partnership with civil society organizations, are seeking ways to involve citizens in budgeting. Some, primarily at the municipal level, have gone as far as adopting participatory budgeting measures that allow citizens direct influence over selected budget categories and fund allocations.One of the primary benefits deriving from public engagement is better understanding of the budget.From that greater knowledge comes:

• Stronger social accountability; and
• Potential improvements in budget outcomes.

11.Policy makers will have to find ways to close the gap between expert knowledge and the public’s perceptions of the problems if they are to increase the public’s receptivity to the tough budget choices that are the foundation of responsible fiscal policy.At the national level, the public’s ability to participate directly in budgeting is limited to periodic elections of representatives who will act on its behalf.Citizens, who consider budget questions infrequently, can become fiscally illiterate and fall into denial about budget problems. Communicating with them, encouraging them to think harder about national budget issues and helping them to understand that they must be part of the solutions -- in other words, engaging them -- is an important step towards creating the type of political environment that will improve the budget process itself and facilitate progress on challenging budget issues.

Part 1. The Case for Public Engagement

For we alone regard the man who takes no part in public affairs not as one who minds his own business, but as good for nothing:and we Athenians decide public questions for ourselves or at least endeavour to arrive at a sound understanding of them, in the belief that it is not debate which is a hindrance to action, but rather not to be instructed by debate before the time comes for action.[5]

12.Today’s governments have little in common with the ones that ruled ancient Greek city-states.Apart from elections, our democracies do not require the direct participation of citizens. That is because there is an inverse relationship between the size of the political unit in population and geography and the ability of ordinary citizens to participate in public discourse.National governments are so complex and the issues they deal with are so numerous and difficult that the institutions of representative democracy are constantly challenged.If more opportunities for citizens to be directly involved were created, it would take hard work to keep them operating effectively and fairly.

13.Nevertheless, the democratic system rests upon the premise that citizens collectively are reasonably informed about public matters and, thus, can exercise their votes responsibly.The electorate must be well informed if citizens are to hold elected officials accountable for their decisions.Clearly not all people will be equally concerned or possess the same amount of knowledge to contribute constructively.But a large enough percentage must be capable of exercising good public judgment if government is to succeed.

14.Most public officials endorse the idea that modern government should actively seek to strengthen itself by acting in ways that reinforce citizens’ ability to make their public institutions reflect their interests, views and values.Public distrust and cynicism provide compelling evidence of distance between the governed and the governing.Civic engagement activities can help close that gap and lead to stronger democratic government that is more open and responsive to the needs of its people. Better budget outcomes, such as more equitable and efficient allocation of resources and greater long-term fiscal stability, are also potential products of an engaged public.

15.Civic engagement and fiscal transparency go hand-in-hand.When governments disclose fiscal information, citizens can determine whether budget execution is consistent with their perceived national objectives and demand changes to policy if it is not.That oversight creates a virtuous cycle -- disclosure, scrutiny, policy adjustment, more disclosure, more scrutiny, etc.More specifically, the self-reinforcing benefits of public engagement can be summarized as follows:

16.Overall improvements consistent with good government.

• Engaged citizens feel empowered.They have more input into the establishment of priorities and feel that they have a stake in outcomes.
• Citizens feel that government works for them and, as a result, place greater trust in government and public officials.
• The interests of under-represented and vulnerable groups (including the poor, women and children) can be better protected, and there is greater equity in the allocation of public resources.
• Government can exhibit greater transparency, making it more accountable to citizens.
• Government can be more open, allowing expanded access to information.
• Opportunities for waste, fraud and abuse decrease as accountability improves and public awareness and scrutiny increases.

17.Potential gains for fiscal policy-making:

• Citizens’ access to information and participation in the public debate leads to more accurate understanding of public finances, particularly basic questions like where the money comes from and where it goes.
• Voters confront fiscal realities and acknowledge the need to make trade-offs.
• Citizens become aware of issues related to intra- and inter-generational equity and are able to cultivate of a stronger sense of stewardship;
• Public thinking becomes more realistic, providing expanded opportunities for negotiation, compromise and consensus.

18.Non-governmental sources play a strong role in increasing the public’s engagement. Whether civil society capacity is well-developed or still emerging, the ability of non-governmental organizations to access information is critical to their civic engagement activities.Lack of adequate access to information creates major obstacles to those efforts.Thus it is essential that government provide full and accurate information about the budget and program performance.Anything less creates barriers to the public’s efforts to be included in the policy process.

19.There are, however, potential risks associated with governmental initiatives to engage the public.Most importantly, there is little point to official displays of openness if policy makers are not supportive.Once citizens perceive that policy makers are not genuinely interested in their input or suspect that they are being manipulated for political purposes, their level of public cynicism and mistrust could grow.

20.Experience with governmental engagement efforts, drawn largely from initiatives at the municipal levels of government, provide the following cautionary lessons:

Potential for unrealistic expectations: Citizens must understand how their input will be used.If their views are merely advisory, they should know the extent to which they will be taken into account by decision makers.Otherwise, popular expectations could result in demands than cannot be fulfilled.

Timing is critical:Public participants will have greater confidence in engagement efforts if they are consulted early in the decision-making process.Otherwise, they will perceive that their input has little chance to influence decisions.

Competition with existing processes:Government officials and policy makers are key to successful civic engagement strategies.They will be more responsive and cooperative if they do not feel that they are being bypassed or threatened by engagement activities.

Non-representative participation:The most vocal public participants may not be truly representative of the overall population.Unorganized citizens are vulnerable either to “capture” by organized special interest advocates or to being co-opted by government official and experts. Civic engagement activities must draw in a broader spectrum of participants to represent all segments of society.

Free rider problem:Popular resistance to funding essential public goods could harden if participants cannot be convinced of their importance.

“Bad” outcomes: Officials should decide how to respond if citizens may misunderstand the issues, express unwise choices or fail to appreciate the consequences of their preferences.Those results may signal the need for greater public education about the issues.Or, they may demonstrate areas where decision makers are out of step with the electorate.

Expanding the Definition of Public Engagement

21.The OECD framework for public engagement identifies three types of government-citizen interaction used by governments to strengthen relationships during the policy making process:[6]

Information: Government uses passive or active means to disseminate information to the public.The flow of communication is one-way -- from government to citizens.Users must seek out passive information, which is available upon request.Examples include official records and archives and publications.Or, the government can work actively to distribute other information through, for example, websites, press conferences and press releases and official speeches.

Consultation:Consultation involves a two-way exchange of information between government and citizens.The government defines the issues and solicits feedback from the public.Examples of consultative processes include hearings, town hall meetings, and polls and surveys.

Active participation:Government can provide structured opportunities for citizens to become involved in defining the policy making process and its content.The government acknowledges citizens’ standing in the discussion but generally retains the responsibility for policy formulation and final decisions.Examples, which occur primarily at subnational levels of government, include participatory budgeting, popular referenda, citizen representation on government commissions and panels, and citizen juries.

22.Under the OECD framework, the third type of interaction -- active participation -- is the type of interaction that actively engages citizens in the policy making process. Opportunities for citizens to actively participate in decision making -- including defining their own options and having influence over the agenda -- are more likely to occur at subnational levels of government.

23.The World Bank uses a broader concept of civic engagement, which it defines as“…the participation of private actors in the public sphere, conducted through direct and indirect interactions of civil society organizations and citizens-at-large with government, multilateral institutions and business establishments to influence decision making or pursue common goals.”[7]That definition incorporates the efforts of non-governmental actors in organizing and encouraging wider citizen participation in the decision-making process.

24.An even broader concept emerges from PACE (Philanthropy for Active Civic Engagement) an organization of private foundations working to support civic engagement.It defines civic engagement as “…activities by which people participate in civic, community and political life and by doing so express their commitment to community.”[8]

25.The common elements that emerge from the three definitions of public engagement are:

• Citizens’ involvement is constructive;
• Participation is intended to influence public decisions; and
• The goal is to improve community and further the common good, not advance self-interest.

26.An expanded definition creates a concept of civic engagement that allows for the complexity and the difficulty of public involvement at the national level of policy making.It does not imply that engaging the public leads to direct participation by citizens in decision-making, such as budgeting by national referenda.Instead it opens other avenues for governments to enable, encourage and support citizens’ efforts become part of national policy debates. A broader concept of engagement expands beyond opportunities authorized, organized and controlled by government.Public engagement activities that take concern national issues are more likely to involve the other forms of government-citizen interaction -- OECD’s information and consultation -- and facilitate a range of efforts by non-governmental organizations, and even unorganized individuals, that reach out to broad audiences and generate a more lively public discussion about national issues.