Kudrin Foundation for the Support of Сivil Initiatives
Composite Authors:
V. V. Vagin (author, supervisor of studies)
E. A. Timokhina (head of the publishing project)
N. V. Gavrilova
N. A. Shapovalova
A. Yu. Fenin
I. S. Antsyferova
Question 1
What is initiative budgeting (IB) and what is it for?
IB is a set of diverse practice based on the citizens’ initiative to address issues of local importance with the direct participation of citizens in determining and selecting objects for spending budgetary funds, as well as subsequent monitoring of the implementation of selected projects.
At the same time, IB is a mechanism for determining priorities in spending budgetary funds with the participation of initiative groups of citizens.
Currently, in many countries, projects that meet the criteria for initiative budgeting are being implemented. The most important features include, in particular:
• participation of citizens at all stages of project implementation;
• distribution of funds of municipal and state budgets;
• regularity and annual repeatability of projects;
• public reporting on the implementation of projects.
Initiative budgeting is a part of the worldwide trend of increasing the scale of participation of territorial communities in determining the ways to develop their own settlements. In the EU countries, this phenomenon was called Community-led Development (CLD).
In each country, the involvement of citizens takes place in different ways, but everywhere the main goal is the participation of citizens in the decisionmaking process. This is especially important when decisions directly affect regional communities.
It is obvious that people are much more aware of the majority of problems of their settlements and, of course, the choice of citizens is more justified than the decision of the authorities. Unfortunately, the choice of authorities, without its discussion and approval by citizens, often leads to mutual rejection and growing hostility.
Question 2
How does initiative budgeting begin?
Initiative budgeting is the Russian version of the well-known participatory budgeting (PB), participation of citizens in budget decisions, which appeared in the late 1980s in Brazil. The emergence of PB practice was a response to the need for joint work of citizens and representatives of the authorities in solving urban problems. The emergence of PB became possible due to a combination of factors, such as the political will of the new government, its desire for democratization and the availability of support from below, from citizens willing to change the situation in their settlements.
Porto Alegre, a million city, the capital of the most southerly state of Brazil, Rio Grande do Sul, became a springboard for the implementation of the first major PB experiment. It is this most important administrative center of the region which is considered to be the starting point of the history of participatory budgeting. Porto Alegre found itself in the forefront of the progressive trend for a reason. The new left wing of the local government has shown itself to be strong enough to take advantage of the opened opportunities and organize the PB process. The catalyst was the oncoming urban movement from below by civil society.
The economic and social context of the reforms was similar to the situation in other large cities in Brazil. Port Alegre had a third of the population living in slums with limited access to clean water, sanitation, hospitals and schools. Reforms started in 1989 were aimed at overcoming these very acute problems. The PB became one of the mechanisms for their implementation. In 1989–2004, the PB practice was sufficiently entrenched and institutionalized.
Since the experience of Porto Alegre was successful, it began to replicate. At first it happened inside Brazil, and then it was transferred to other countries of Latin America. In 1996, at the UN Habitat conference in Istanbul, the PB was recognized at the international level as one of the best social practices. The following years were marked by active dissemination of practice in different countries.
IB Practices in the World
Question 4
What is the algorithm of initiative budgeting?
From country to country, from region to region, the mechanisms for involving citizens in the budget process are somewhat different. In its most general form, the algorithm provides for the following stages:
• According to the decision of the regional government body, the amount of budgetary funds for the initiative budgeting program is determined.
• The design of the IB practice, its calendar cycle is determined, appropriate orders, regulations and resolutions are adopted. In rare cases, changes are made in the regional legislation.
• Public discussions are organized where citizens formulate and discuss ideas to solve the most pressing problems for them. In these discussions, citizens exchange opinions, formulate their own proposals and learn about other proposals. It is important for everyone to have an opportunity to express their views on the priorities of spending.
Then, with the participation of a consultant, there is a dropout of those ideas that do not correspond to formal criteria (minimum and maximum cost of project implementation, property issues, authorities).
Then the vote takes place, where from the remaining short list citizens select the most important ideas.
• With the support of consultants and representatives of the municipal government, initiative groups work on ideas with the largest number of votes casted, and prepare project documentation for them.
• Implementation of projects is provided with financing. In some practices of initiative budgeting, a contest is envisaged: not all projects put forward by citizens are provided with financing, but only those that score the most points according to the formulated criteria. Another feature is the co-financing of projects by citizens, the amount of which is determined by the citizens themselves at the same meeting.
• Under the standard state procurement procedure, contractors responsible for the practical implementation of projects are selected.
• Projects are implemented under the control of citizens.
Question 5
What is the maximum cost of the project, which can be implemented with the help of IB?
The cost of initiative budgeting projects is much less than the cost of investment projects. It should be remembered that the main area of application of initiative budgeting in Russia is the solution of local issues.
Reference
Most practices of initiative budgeting introduce restrictions on the upper limit of the amount of state funding. For cities, it is 2 million rubles, for villages – up to 1 million rubles. At the same time, along with state funds for the implementation of projects, funds from municipalities, citizens and businesses are attracted.
The amount of co-financing of funds from these sources is not limited. In general, in the Russian Federation, co-financing reaches a third of project implementation costs. In the Stavropol Territory, Rodnikovskoye Village, Arzgir District, over 20 million rubles were co-financed from the funds of the municipality and business for the repair of the school sports hall.
The average cost of PPMI micro projects in the Tver Region is a little more than 700 thousand rubles. In 2016, the program as a whole in the region was allocated 165 million rubles.
Thus, the amount of subsidy for a separate initiative budgeting project depends on the design of the program adopted in the constituent territory of the Russian Federation.
Question 6
Who implements IB projects? Can I get money from the budget for the implementation of the project, which will be selected?
Citizens who chose the initiative budgeting project and are involved in its development are also actively involved in monitoring the implementation of the project. At the same time, the works are put for competition in accordance with the provisions of the Federal Law No.44-FZ “On Contract System for the Procurement of Goods, Works, Services for the State and Municipal Needs” dated 05.04.2013 (as amended on 03.07.2016) or the Federal Law No.223-FZ “On Procurement of Goods, Works, and Services by Certain Types of Legal Entities” dated 18.07.2011 (as amended on 05.04.2016).
The law gives an opportunity to participate in the competition to a wide range of persons. A participant, who has collected the most points and, as a rule, has offered the least amount to fulfill the contract, starts work in accordance with the work schedule.
Thus, the implementation of works within the IB projects is carried out by the winner of the official competition held in accordance with the norms of federal legislation.
Question 7
What share of the local budget is distributed through the IB mechanism?
In the city of Porto Alegre, in some years, up to 40 % of the city budget was distributed through the practice of initiative budgeting. On average, at least 10 % are allocated to PB projects annually.
In Russia, regional practices of initiative budgeting rarely exceed 1 % of total budgetary expenditures. Exceptions are several regions. In 2016, the Yaroslavl Region started the implementation of the program “Develop the Region by Anniversary”, for which it was envisaged to allocate over 1.6 billion budgetary funds. This amount is almost 2 % of the regional budget. It is gratifying that most of the projects are implemented on the basis of decisions and participation of citizens.
It will be appropriate to draw attention to the fact that the minimum amount of the pilot program of a constituent territory of the Russian Federation should be above 20–30 million rubles. Otherwise, it is difficult to determine and assess the effects of initiative budgeting: projects are few, there are a large number of losers in the competition, and the costs of consulting projects are high.
Question 8
Can IB be implemented in cities?
Initially, projects involving citizens were mainly implemented in cities. In Latin America, most cities with over one million people have experience in participatory budgeting. In Europe, PB is also predominantly urban practice. Lisbon, Paris, Berlin – this is not a complete list of cities implementing PB projects.