This case study considers participatory budgeting (PB) as a process that enables non-elected citizens to take part in prioritizing or allocating public funds. Additionally, according to the definition of Sintomer, Herzberg and Röcke (2009), participatory budgeting has the following features:1
- The city level, or a (decentralized) district with an elected body and some power over administration, has to be involved.
- It has to be a repeated process.
- It deals with financial and/ or budgetary issues.
- It must include some form of public deliberation within the framework of specific meetings/ forums.
- There is some communication of how the public inputs were used.
The typical participatory budget in Germany is consultative, rather than providing citizens with a direct influence over decision-making. It calls upon citizens to contribute and discuss their proposals on expenditure and cost saving measures. It usually makes use of an online platform, and promotes accountability by providing information on how citizen proposals and inputs were taken into account.
More and more local authorities are introducing participatory procedures for their municipal budget in Germany.2 By doing so they are giving citizens an opportunity to contribute and discuss their ideas on how the municipality should spend its money. As in nearly all other countries, so far, there has been no PB at the federal or state level in Germany.
The main objectives for the participatory budgeting in Germany are:
- Information sharing: Through public information dissemination the population are made aware of the budget and mobilized for PB.
- Participation: Citizens contribute their own ideas and priorities, either as ‘advisors’ who submit their proposals to policymakers and administrators, or exceptionally as ‘decision-makers’ on a specific section of the budget. Citizens also contribute by sharing their own ideas with the administration. The key element of this phase is public discourse, which takes place for instance at public meetings or online.
- Accountability: The organizers of the process provide information on which particular ideas submitted by citizens were implemented, and which were not.
These practices illustrate the principles of being open, inclusive, respectful of self-expression, timely, rich in quality information, sustainable, and complementary.
PB in Germany is led by the executive branch of the local government, and participation happens at the budget planning stage.
In Germany, PB is typically consultative. Citizens submit proposals and make comments. They enrich the budget planning debate by contributing their local expertise and priorities. Administrators take these proposals and comments into account when drafting the budget. The local council decides on the proposals, and explains why some proposals can be implemented and others cannot.
Germany’s Federal Agency for Civic Education (BpB) and the Service Agency Communities in One World (a division of Engagement Global gGmbH) published a report on participatory budgeting in Germany. The report covered 435 local authorities, rural districts and urban districts.3 Most of these local authorities have a population of at least 40,000 inhabitants.
Based on this report, in 2015, 41 municipalities out of a total of 435 local authorities had an established practice of participatory budgeting i.e. PB is being carried out for the third time or more. A further 30 authorities introduced PB in the last two years, making a total of 71 authorities practicing PB. A further 45 authorities are making concrete plans to introduce PB, or have started to implement the first steps of a PB process.4
To better understand the objectives and design of participatory budgets in Germany, it is helpful first to outline the history of the origins of these budgets, and how they developed.
In 1998, the small southern German municipality of Mönchweiler became the first local authority to involve citizens in municipal financial planning. Mönchweiler was soon followed by a handful of other municipalities in the ‘Local authorities for the future’ network, a group of municipalities that had got together to test new conceptual approaches to administrative modernization. In 2000, the Ministry of the Interior of the German federal state of North-Rhine Westphalia, in cooperation with the Bertelsmann Foundation, launched the ‘Pilot Municipalities in North Rhine Westphalia’ project, in which six local authorities tested the instrument of participatory budgeting (Franzke & Kleger, 20105). The Porto Alegre model6, which is based on the notion of democratization and social justice, provides citizens with some decision-making authority. However, this aspect played barely any role in the introduction of the first participatory budgets, and to this day few German participatory budgets are based on it. 7
In the early years, the German PB model was focused on optimizing public services and aimed first to balance the municipal budget. For example, the Hilden municipality (56,000 inhabitants) introduced the PB model in 2000, to increase its proximity to its citizens. Hilden kept its residents informed on participatory budgeting through brochures and the media, and based its procedure on a central citizens’ forum. There, municipal employees presented the public services and institutions and answered citizens’ questions at information desks. It was possible to record suggestions on special forms and anyone who made a proposal received a personal letter informing them of the local council’s decision. Where appropriate, other letters followed at the project’s launch and termination. Here, citizens had no real control over the process itself, and while their knowledge was used to produce concrete improvements in services and infrastructure, these consisted mainly of secondary projects, such as putting a roof on an underground car park or lengthening a cycle path, rather than central issues.
In big cities like Berlin, the method was slightly different. Participants were not limited to discussing the projects to be carried out, but put their priorities in order of importance through a voting system in which each participant was given five votes to distribute among the various proposals. The process was top-down, but monitored by a committee composed of around 15 people (civil society representatives, civil servants and politicians). Initially, the procedure focused on forty ‘products’, on which the district had a direct influence (libraries, green areas, sports equipment and so on). In 2006, the majority of the 38 validated proposals were financed with no additional costs due to budgetary transfers from one program to another. The idea was to evaluate public services in a participatory manner by offering citizens a wider area in which to use their expertise than in other German experiments, but there was no intention of allowing citizens some decision making authority.
This result highlights a clear difference between the German participatory budgets, and the original Porto Alegre model in which citizens are granted direct decision-making authority. The consultative nature of PB in Germany is explained primarily by the different objectives mentioned above. PB is not used primarily to strengthen participatory democracy (Sintomer, Herzberg & Röcke, 2016), but to sensitize administrators and policymakers to the needs and wants of citizens using participatory elements. This creates opportunities for citizens to bring their own expertise and competencies to bear in the political decisions that affect them. For administrators and policymakers it generates new opportunities to gain important information on the preferences of the population, and gain fresh impetus from the ideas and proposals submitted by citizens. (Märker & Nitschke, 2008, p. 17)8.
The German Constitution mandates in its art. 28 (2) the autonomy of local governments (municipalities and cities). This includes independence and self-responsibility in financial aspects. The municipalities are authorized by the budget by-law of each particular German State to enact a budget by-law for each fiscal year.9
Based on this legal ground, local governments build up their annual budgets according to their individual budget by-laws (Gemeindehaushaltsverordnung – GemHVO of each city or municipality). The process for PB is not explicitly defined in the by-laws of the German States, as a result each municipality can arrange the process according to its own preferences and practices.
All by-laws contain the regulation that the budget by-law is to be deliberated and decided only by the municipal council in a public session. 10
Who and How
PB at the local level is normally designed for the entire population of the municipality concerned. Anyone who would like to help shape things in their municipality can get involved.
The practice takes place in three phases:
During the first phase – the phase of information – citizens are supplied with information about the budget and the participatory budgeting procedure, mainly through online communication. Here, the aim is first of all to make citizens aware of the public budget, the areas of activity of the local authority, and the scope of income and expenditure, so that they can submit and discuss informed and sophisticated ideas. Secondly, during this phase citizens are informed of their options for participation, and encouraged to get involved.
During the second phase – the phase of participation and consultation – citizens are able to contribute their ideas, make proposals for planning the budget and provide feedback on existing proposals. The proposals are then discussed by the citizens in online forums or at public meetings, and usually also rated. This results in a prioritized list of proposals. Decisions on implementing the proposals are taken by the council. The administration provides the council with written statements either on all the proposals or on a previously agreed number of them. Once the feasibility of the proposals, their costs, and the responsibility of the municipality have been properly looked into, these statements are used by the policymakers as a basis for decision-making.
During the third phase – the phase of accountability – decision-makers and administrators provide information on the outcome of the participation, and explain and justify their decisions as to which proposals will be implemented and which will not. For this purpose, an accountability report is usually published. 11
Regarding the basic model of PB in Germany, in comparison to other countries one fundamental difference is evident to those situations where PB is seen as a procedure in which citizens are presented with a specific budget, and invited to take a decision on it. In Germany, participation means consulting, but does not mean taking the decisions. In other countries, citizens decide, whereas in Germany they advise. To support this process, major importance is attached to making the municipality’s financial situation transparent (see Herzberg, Sintomer, Allegretti & Röcke, 2010). “This is the case particularly where there is a desire to institutionalize greater openness of decision-making and administration, and establish transparency and dialogue on the budget as a whole.”12
Some PB processes are aimed at specific groups, such as women in the case of gender budgeting, or youth in the case of participatory budgeting for school students. While this kind of PB targets specific groups, other PB processes are designed for a highly heterogeneous target group. Some are even expressly aimed not only at the entire population of a city, but also more generally at anyone interested.
Results and Impact
- German participatory budgets have had few documented social effects, with the exception of the Emsdetten PB process. In Emsdetten, the citizens’ forum recommended that it was better to balance the budget by increasing local business taxes rather than by cutting services. The local council partially followed the recommendation, which produced an additional 610,000 euros in tax receipts. However, adopting the recommendation was also to the local council’s benefit, as its tax rate was lower than the level recommended by the law. In the medium term, the town would have seen some subsidies withheld if it had not increased its rate.
- PB processes in Germany always involve creating a brochure that presents the town budget, providing the detailed cost. The design and content of the brochure is designed to keep in mind the common citizen, who has no or limited background in public finance. The brochure contains proposals in order of priority. However, proposals often contain only two or three lines.
- According to the study conducted by Sintomer, Röcke and Herzberg in 2012, people who participated in the consultative processes were generally middle class; two-thirds were over 40, less than 5 per cent of participants were young people and there were almost no foreigners. Women represented only a third of those involved13.
Based on research study published by Germany’s Federal Agency for Civic Education (BpB) and the Service Agency Communities in One World (a division of Engagement Global -gGmbH14), among the 435 local authorities:
- 69 % of the researched PB processes provide space for discussion on the entire budget.
- 79 % of PB processes allow both cost-saving and expenditure-increasing
- 75 % of currently active PB processes are proposal-based, i.e various budget-related proposals are discussed.15
- Only a small number of processes are feedback-based (i.e citizens providing feedback to executives’ budget proposals) or decision-based (citizens are invited to decide on the final budget allocation).
- Currently, PB processes focus on online participation. 40 % of processes are conducted largely online, supported by traditional channels (e.g. letter, telephone, face-to-face). The second largest group of PB processes are online only.
- Germany’s PB model highlights the advantages of the consultative model. This model can be attractive for policy makers, where there is a desire to institutionalize greater openness of decision-making and administration, and establish transparency and dialogue on the budget as a whole. Here the consultative procedure offers a form of participation that is directly linked to the political-administrative processes, and in which citizens can make proposals on any thematic area and without financial restriction.
- (Only) 57 local authorities in Germany currently practice a form of a separate accountability for participatory budgetse provide feedback on the proposals and how they have been used. Thirty-seven of them provide only aggregate or overall accountability for all proposals, i.e. no reference is made to the individual proposals. Detailed accountability is provided for only 20 participatory budgets; here, accountability takes the form of statements or council decisions in relation to specific proposals. Of these participatory budgets, seven have also developed a monitoring system that enables the local authority to provide regular information on the implementation status of a proposal. Since most procedures in Germany are consultative and citizens do not take decisions concerning implementation, accountability is a phase that is all the more important for German participatory budgets, because ‘without any feedback as to how the input made by citizens is being used in budget planning, citizens are highly unlikely to feel motivated to invest their time (once again) in participating’ (Märker & Nitschke, 2008, p. 21). This information was collected by a team from Zebralog, an agency specialized in participation, working on behalf of the Service Agency Communities in One World (a unit of Engagement Global), and Germany’s Federal Agency for Civic Education. The team began by preparing an analytical framework, which they then applied for close online study of 96 local authorities in Germany that are actively involved in participatory budgeting.
- In the early 2000s, the objective behind PB was to modernize public administration by mainstreaming citizen feedback. By the 2010s, there was a shift of objective behind introducing and implementing PB. Municipalities have started to invite their inhabitants to discuss the question of how public spending could be reduced. In contrast to the pioneering experience, however, options of tax increases were no longer topical. Also, in many instances, participatory budgeting on cost reductions is exclusively organized on the internet, even without citizen meetings.
- Critics of the PB process often argue that the PB process in Germany is used to give legitimacy to policy that have been previously decided.16
Online discussion is a common method for seeking public feedback. However, the Internet discussion forums focus on the micro-local, resulting in highly segmented discussion that makes it difficult to get an overall view on any sector or thematic topic.
Principles of Public Participation in Fiscal Policy
The PB process successfully illustrates a number of the principles of public participation in practice. The project promotes openness, inclusiveness and depth.
- Rich in quality information: Relevant information is provided to and from the municipalities to participate in the decision-making process. Specific efforts are made to make the local authorities’ financial situation transparent.
- Respectful of self-expression: Since the councils work at the level of local community, they enable communities to express their interests in their own way, and provide opportunities for both web-based interactions and public meetings.
- Timely: the engagement is timed to provide citizens with detailed general information on the budget, followed by opportunities to provide inputs, proposals and feedback at the phase of the annual budget cycle where there is space for citizen inputs to be considered for the next annual budget.
- Sustainable: Engagement is ongoing and regular. In a number of municipalities, it has been in place for more than 3 budget cycles, and it is supported by an enabling budget law.
- Inclusive: The typical PB process aims to be inclusive of all groups through inviting all local CSOs and citizens, as well as representatives of other sectors to participate in the PB.
- Open: The process is open, information is provided about the purpose and scope of the public engagement. In addition, the outcomes of participation can be followed through the relevant website by the public.
Complementary: because the public engagement is advisory only, it complements existing relationships between elected officials and citizens, providing officials with additional information on citizen needs and preferences while leaving political accountability relationships unchanged.
- Type of government: Germany is a parliamentary democracy governed under the constitution of 1949, which became the constitution of a united Germany in 1990. The federal president is the head of state but has little influence on government. The president is elected for a five-year term by a federal convention, which meets only for this purpose and consists of the Bundestag and an equal number of members elected by the state parliaments. The chancellor, elected by an absolute majority of the Bundestag for a four-year term, is the head of government. There is a bicameral Parliament. The Bundesrat, or Federal Council (the upper house), has 69 seats, with each state having three to six representatives depending on the state’s population. The Bundestag, or Federal Assembly (the lower house), has 598 deputies who are elected for four years using a mixed system of proportional representation and direct voting; additional seats are added when a party wins more seats through direct voting than it would have by proportional representation alone.
- Civic space: Germany is a modern, advanced society, shaped by a plurality of lifestyles and regional identities. The country has established a high level of gender equality, and promotes disability rights. Over the last decade, various forms of “cooperative democracy” have gained in importance, increasing the participation of civic actors (citizens, representatives from non-government organizations, special interest groups or the local economy) into the local decision-making processes. These forms of “co-operative democracy“ comprise round tables, forums, future conferences, citizen juries and the like (Holtkamp et al. 2006; Kersting 200817). However, there is hardly any representative data available as to how intensively these means of cooperation are used, what effects they have, or how many people have already participated in such non-institutionalized ways of citizen engagement (some data has been collected by Städtetag Baden-Württemberg 201218).
c. Open Budget Survey Scores19 – The Federal Government of Germany provides the public with substantial budget information. It has scored 71 out of 100 in the open budget index for 2015. However, the federal government is weak in providing the public with opportunities to engage in the budget process and scored only 24 out of 100 in this category (compared to an average score of 25 for all countries in the OBS). Budget oversight by the legislature and by the supreme audit institution are adequate, with scores of 88 and 75 respectively for these two categories.