Prospects for Implementing Participatory Budgeting as an Effective Instrument for Implementing Budgetary Policy at the Local Level

Abstract

Abstract. The purpose of the study is to determine the methodological principles for implementing Participatory Budgeting as an effective instrument of the budgetary policy at the local level, in particular, the analysis of the main risks and limitations of this process, the identification of its main stages and the features of the main types of activity, which includes each stage. Methodological bases of the study consist of general scientific methods of obtaining knowledge of economic phenomena and processes. Realization of study tasks requires the following methods: method of theoretical generalization -during the study of scientific works, regulatory legal acts; abstractlogical method -to generalize the theoretical and methodical provisions, as well as to determine the purpose of the study; method of a systematic approach -the definition of directions for improving the functioning of Participatory Budgeting as an effective instrument for implementing budgetary policy. Results. The main components, which should include Participatory Budgeting process are proposed, the purpose of which is to facilitate the establishment of a social dialogue between local authorities and residents of the territorial community, and to create conditions for the participation of the residents of the territorial community in the budgetary processes to meet their needs. The analysis of the conducted studies made it possible to determine the main risks and limitations of participatory budgeting. Practical implications. The main stages of the participatory budgeting process are outlined, in particular: the preparatory stage, the stage of budget formation and its approval, the main point of which is the establishment of a budget committee and the commencement of its work, the implementation stage, the stage of monitoring and evaluation of participatory budgeting. The main types of activity included in each stage have been studied. All of the above made it possible to develop a cycle of participatory budgeting as one of the directions of budgetary policy. We believe that the popularity of this process is determined by the benefits received by the residents, local authorities and the city in general. Value/originality. Formation and implementation of budgetary policy at the local level in the current conditions of decentralization of power with the help of the developed cycle of implementation of Participatory Budgeting will promote the establishment of a social dialogue between local authorities and residents of the territorial community, creating conditions for the participation of residents of the territorial community in a transparent budgetary process to meet their needs.

Exploring elitisation of participatory budgeting in a post-Soviet democracy: evidence from a Ukrainian municipality

“…As no specific law was enacted to introduce PB in Ukraine (Kudlacz and Zhebchuk, 2019), local self-government initiatives have provided a key trajectory for implementing PB reforms. In 2015, a few municipalities adopted initiatives designed to introduce PB within the framework of the Polish-Canadian democracy support programme (Sirenko et al, 2018;Khutkyy, 2019). By 2020, 238 local governments had distributed at least 1% of their funds through PB (Chorna-Bokhniak and Lepyoshkin, 2020).…”

“…It needs to be emphasised that, in Ukraine, the introduction of PB was particularly instrumental in the territorial decentralisation of power (Sirenko et al, 2018). When PB was implemented in the WUM, there was one notable impediment.…”

“…It was expected that ordinary citizens in Ukraine would be able to exert pressure on local elites to distribute resources according to their preferences, having participated in grassroots decision-making processes (Kvartiuk, 2016). However, Sirenko et al (2018) warned that PB, which was introduced to facilitate decentralisation efforts, could offer possibilities for the country's local elites to ensure that their interests prevailed instead. In any context, it is crucial for the social-justice criteria to be respected in the process of involving constituents in making budgetary decisions (Baiocchi and Ganuza, 2014).…”

“…Therefore, obtaining the help of the city council is reasonable. Sirenko et al (2018) underscored the risk of conflicts escalating when resources are distributed through the PB process in Ukraine. The presence of conflicts of interest, clientelism and patronage undermines trust in the deliberative process, as is evident in extant work (Arnstein, 1969;Kuruppu et al, 2016;Friendly, 2019).…”

Public participation in the decision-making process at the level of territorial communities

“…The implementation of a participatory budget allows for an increase in the activity and involvement of the public in public participation in the decision-making process regarding the distribution of financial resources in local budgets [32]. Authors of a similar opinion [33], who proposed the main components that should be included in the process of participatory budgeting, the purpose of which is to promote the establishment of social dialogue between local authorities and residents of the territorial community and create conditions for the participation of residents of the territorial community in budget processes to meet their needs. We believe that participatory budgeting makes it possible to meet the urgent needs of the community in a relatively short period of time, stimulates economic development at the local level, and improves relations between institutions and representatives of both civil society and the government.…”