Participatory budgeting: A pathway to inclusive and transparent governance

Across the world and especially in developed countries, there has been a decline in trust in democratic institutions, an increase in political discontent and citizen dissatisfaction, and a resulting decrease in voter turnout. Economic crises, climate disruptions and the COVID-19 pandemic have only exacerbated these sentiments. In the late 1980s, participatory budgeting – an approach that allows citizens to directly engage in budgetary decisions – emerged as one of the most promising solutions to this global democratic malaise. By involving citizens in the allocation of public funds, this approach enhances public trust and accountability in governance. It is best described as a co-production process that not only allows citizens and professionals to cooperate and deliberate but also counters populist narratives and educates younger generations on resource prioritisation. Broad public involvement and deliberation are the rule, with the aim being to make budgetary processes inclusive, transparent and democratic. What makes participatory budgeting different from other participatory methods is its focus on financial processes, openness to the public, cyclical nature, reliance on public deliberation and accountability. It is applied in thousands of towns, cities and regions across the world and enjoys the support of governments, civil society and international organisations. It addresses both socio-economic and democratic goals and seeks to enhance public infrastructure and services while promoting political equality and transparency. This democratic innovation allows citizens to shape the space in which they live. Additionally, it reconfigures public governance by redefining the roles and relationships of citizens, civil servants and politicians. It is particularly effective in local governance, but also has a growing application in communities, in schools, community groups and even prisons, for instance. Some of the challenges facing public budgeting include limited participation of marginalised groups, the risk of co-optation by political interests and difficulties in implementation. However, its potential to revitalise democratic engagement and foster inclusive governance makes participatory budgeting a crucial tool in addressing some of the issues that are currently eroding the global democratic order. This briefing updates a 2016 briefing by Gianluca Sgueo.