Austaxpolicy blog

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Participatory budgeting: The next ‘Big Thing’ in Australian Local Government?
2 February 2017, by Helen Christensen and Bligh Grant

Australian governments of all levels are increasingly familiar with two trends in public budgeting. Firstly, the pressure to deliver ‘more with less’ in public budgets; secondly, an increased realisation by communities that they have a democratic right to participate in public policy decisions. In local government, processes of participatory budgeting (PB) are emerging, designed to assist meeting the challenge of these trends.

Simply defined, PB is a process in which the community can contribute to decision-making over part, or all, of a government budget. Somewhat famously now, the first PB process was run in Porto Alegre, Brazil in 1989. It was designed as an element of democratisation in a country that was emerging from a period of authoritarian rule. The Porto Alegre PB processes ran for over a year and involved local direct voting, neighbourhood meetings and regional assemblies where the budget was decided and where representatives conducted vigorous oversight of spending to ensure that practices favouring specific groups did not return.

The practice spread throughout South America, propelled by visible improvements in social justice, wealth redistribution and social wellbeing. These were evident in decisions by communities to improve basic community infrastructure such as sanitation and paving. By the mid-2000s, PB was proliferating through the developing world, led by international lenders such as the World Bank and United Nations Development Program. These organisations made PB a condition of their loans as a means of promoting good governance.

The more recent wave of PB processes has seen it gain a foothold in the cities of established Western democracies in Europe, North America and now Australia. In these countries, the practice is billed as addressing the ‘wicked problem’ of how to involve communities that are equally distrustful and demanding in the face of declining sub-national budgets.

Australia has come relatively late to PB, with the first documented process occurring in 2012. While Australian practice has shown some similarities with those conducted in other Western democracies, there is still wide variation in practice, with local governments grappling with how to adapt the practice to best suit their needs.

Read the full article at Austaxpolicy blog.

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