Lecture: An annual spending plan: Narrator: Listen to part of a lecture in a political science class. Professor: We've been discussing how local governments create an annual spending plan, a budget, for the tax money they collect each year and as I've said, budgeting is in essence, a clear expression of priorities. I mean, it's easy for politicians to say that they value things, things like education, but unless they allocate enough money, lets say to hire more teachers, then you've got to wonder if they really do value education. Richard: It's like that saying, put your money where your mouth is. Professor: Exactly. Anyhow, with this in mind lets talk about participatory budgeting. Participatory budgeting, PB for short, is one alternative process that some town and city governments around the world have opted to put into place. Here in the United States, we're used to thinking of budgeting as happening behind closed doors. It's generally believed that government officials alone will decide where to spend tax dollars, that local citizens don't really have access to that process. Well, PB turns that assumption on its head. First, PB seeks to get citizens involved through discussions, negotiations, and meetings. Citizens present their expectations and priorities to elected officials in terms of resource allocations. Also, the inner workings of the process become visible and clear to attendees. Citizens don't have to guess what's going on behind the scenes.They get insight into what's happening and why and lastly, the PB process helps to align government priorities with citizen priorities. It puts the politicians and the citizens they represent on the same page since it gives the politicians a better understanding of local needs. So there are advantages to PB, but there are difficulties too. First, it's hard to implement. Why do you think that is? Richard? Richard: Probably because budgeting's complicated. Maybe residents need a training workshop. You'd have to really understand howusing funds for one thing means you don't use funds for something else. Professor: Well, while budgeting might get complicated at times, training isn't a requirement. No, actually more than anything else, citizens need time to attend a bunch of meetings to advocate for what they want. It's not enough to show up at one city council or school board meeting, ask for something, then disappear. Aside from that, citizens must also recognize that, ok say a group of citizens persuaded the city council to allocate $8 million to build a new community center, but tax revenues were lower than expected for that year and so the bureaucrats didn't have the funds to actually buy the land and materials and hire a construction team. The end result: the community center doesn't get built. Richard: But why would a city council budget money it didn't have? Professor: Budgets are crafted months in advance. Tax revenues are projected based on past revenues and funds can dry up or not materialize for lots of reasons like an unexpected downturn in the economy could reduce consumer spending, which in turn reduces what business' pay in gross receipt taxes to local governments. Now, I should point out that for us academics it's hard to talk conclusively about the efficacy of PB. You see, most of the recent literature is just individual case studies, descriptions of only a single city's implementation of participatory budgeting. I'm not saying they were poorly designed. It's just hard to draw any general conclusions from them. The only meaningful study I've seen to date is an analysis that used rigorous statistical controls, a comparative analysis of a whole number of cities in Brazil. A political scientist from Yale University looked at all the case studies that were published between 1996 and 2008 and he found that sort of on a macro level, that implementing PB did not really affect how public funds were divided up. Richard: Wait. If PB doesn't change what budgets look like, why bother? Professor: Good question; one I'd also ask if I hadn't read one other finding of that Yale study that PB significantly increased the chance of the mayors political party getting reelected and remaining in power. At the risk of sounding too cynical, it seems that PB can generate good public relations. The use of PB, regardless of any tangible benefits to the public, apparently helps local residents trust their political leaders. Whether that's enough to justify the process, I don't know. Obviously more research is warranted.