Problems and Purpose

The use of state finances is closely related to the public's life, such as city construction, health insurance, school construction, etc., but financial issues are unfamiliar to the residents' perception [1]. The Chinese government has been trying its best to do things for the public, but sometimes it does not achieve the expected results. This is due to a long history of low public discussion and participation in budgeting, as well as a lack of effective communication vehicles and platforms, which leads to a distance between the public perception and the government's financial work.

To further provide institutionalized guarantees for public participation, in 2018, Yixing city decided to launch a pilot participatory budgeting for the renovation of old neighbourhoods. This initiative aims to design a new way of budget review and supervision and to put the construction of public projects that involve the vital interests of the public in the hands of public discussion and decision. The government leads the public to participate in the government decision-making process to achieve the goal of more open, scientific and transparent budgeting and further optimize the allocation of public financial resources.

The practice of participatory budgeting in Yixing City has not only broadened the ways and channels for the public to participate in financial allocation but also enhanced the public's understanding of government policies. At the same time, it has improved the living environment of the community and promoted the harmonious development of the community and the whole society.

Background History and Context

With the rapid increase of GDP and per capita income, China's fiscal funds are increasing. Since the overall growth of fiscal funds, fiscal expenditure is also increasing in a high proportion. In the face of increasing fiscal expenditure, how to use fiscal expenditure more standardized and efficiently has become particularly urgent [2]. Participatory budgeting is slowly emerging as a good solution. From Wenling model [3] to Jiaozuo model. Then to the Harbin pilot and the implementation of Wuxi's participatory budgeting model [4]. Public participation began to lean primarily towards the street and community level. At the same time, one of the differences from the previous practice model is that in the process of participation, less reliance on people's congresses and more reliance on grassroots governments and community organizations [5]. In terms of project selection, according to citizens' preference for choice, more budget items that are closely related to residents' lives are chosen. The Yicheng street model is typical.

Yicheng Street, which is in the middle of Yixing City, has a total population of 232,000. As the main urban area of Yixing, Yicheng sub-district has a high population density and a complex staff structure. The old communities in the area generally suffer from weak infrastructure and difficult management. Therefore, in recent years, Yicheng Street has been creating an innovative model that is more suitable for the renovation of old communities in response to various issues such as the environment and style of the community renovation.

The renovation of the old district is a major brand in Yicheng's street construction. It is also a practical project run by the government for the people. To involve residents in the financial budget and give most of them real benefits, "participatory budgeting" has become an effective measure of sunshine finance. It is a new way of budget review and supervision. It puts public items affecting the vital interests of citizens to the public for discussion and decision-making. As a result, the public can participate in the government's decision-making process, making budgeting more open, scientific, and transparent. And it can further optimise the allocation of public financial resources.

Organizing, Supporting, and Funding Entities

The participatory budget for Yixing's Yicheng streets was funded by the local government, with the city's Finance Bureau and construction department coordinating the organization and carrying out field research and project formulation. The initial participatory projects were drawn up and involved 16 communities and benefited more than 7,400 households.

According to the construction department's preliminary estimates, the old city will require an investment of around 200 million yuan, and due to financial constraints, the project is planned to be implemented over three years. In the first year, a budget of 70 million yuan was earmarked for the pilot reform, with priority given to the implementation of 12 community renovation projects.

In advance of the participatory budgeting meeting, each community elected its resident representatives to form the participatory budgeting delegate members. A total of 136 people attended the meeting on the day, including relevant street leaders, municipal people's congress representatives, the members of the Chinese People's Political Consultative Conference (CPPCC) and representatives of residents in the area. The participatory budgeting meeting was chaired by colleagues from the Ministry of Finance of the local government department. The participants voted on the spot and the results were announced on the spot [6].

Participant Recruitment and Selection

In participatory and budgetary activities, the method chosen by the delegates can have a significant impact on the democratic legitimacy of the activity [7]. The renovation project in Yixing Yicheng Street involves 10 communities and all residents in the community have the right to participate in the selection of renovation projects for their neighbourhoods. Among the entire population, the right to vote and decide on the final renovation project was given to 136 people from Yicheng Street, including NPC representatives, CPPCC members, party members and representatives of the street's participatory budget. The National People's Congress (NPC) is the highest organ of state power in China, where the delegates are elected by the Standing Committees of the People's Congresses throughout China, and their duties include assisting in the implementation of policies. In addition, the Chinese People's Political Consultative Conference (CPPCC) is a governmental institution of multi-party cooperation and political consultation led by the Communist Party of China and is an important part of the governance system in China. In addition, community mass representatives are assigned in their respective communities in proportion to their resident population and are usually members who are actively involved in this project and are widely recognized by the public. The mass representatives of each community form the street participatory budget representatives.

Methods and Tools Used

The main method used in Yixing City is to achieve participatory budgeting through the interplay of multiple channels, with community representatives voting and deliberating on 12 of the 16 proposed alternative projects for the renovation of old neighbourhoods, allowing the public to fully budget their demands and monitor the use of the budget.

Throughout the process, participatory budgeting employs a variety of tools, including professional facilitation, collective meetings, mass media, deliberative voting, and process oversight.

First, professional facilitation. Close collaboration with professionals was effective in helping them explore shifts and adjustments in budgeting [8]. Yixing City's old neighbourhood renovation program began with the professional sector's research on old neighbourhoods, had specialized community representatives promoting knowledge and organizing meetings on participatory budgeting to the public, and finally ended with experts and leaders evaluating the performance of participatory budgeting, giving full play to the role of expert facilitation. This tool was also used in the Citizen Initiative Review in Scion. (https://participedia.net/case/6439)

Second, collective meetings. The well-known feature of participatory budgeting is the democratic discussion of infrastructure projects, and the overall process is based on a schedule of meetings initiated by the government [9]. In the participatory budget of Yicheng street, a collective meeting is held to elect community representatives. The participants of the discussion were the deputies of the National People's Congress (NPC), members of the Chinese People's Political Consultative Conference (CPPCC), and party members and representatives of the participatory budget of Yicheng Street. First of all, in China, the National People's Congress is the highest organ of state power, and the local people's congresses also represent the highest power in each locality [10]. The people's representatives of this participatory budget meeting were then elected by the Yixing People's Congress. Meanwhile, in the context of the multi-party cooperation and political consultation system led by the Communist Party of China, the participants also included local party representatives and CPPCC delegates. In addition, Yicheng Street identified a different number of community representatives in different communities to attend the meeting according to the proportion of the population. A timely information meeting was held in Yicheng to announce the renovation plan and funding options. In addition, a participatory budgeting meeting was organized to showcase the economic level of the street, the construction status and the budgeting status to ensure that the final project would be accepted and feasible by the residents. As in the case of the thematic meetings of the different functions of the Turin deliberative budget process. (https://participedia.net/case/5404)

Third, mass media. In China, the Wuxi government seized the advantage of fast delivery and wide coverage of the mass media to make the participatory budget content accessible to a wide group of people through the mass media. (https://participedia.net/case/7423) Yixing Street fully learned from this tool and made the process more transparent by publishing brochures and posting news on the website to the public in a variety of ways when announcing specific information about the renovation projects and funds to the public.

Fourth, is deliberative voting. During the initial publicity phase of the participatory budget in Yicheng Street, participatory budget representatives were elected in each community in proportion to the population living there. These community representatives became one of the components involved in the discussion and decision-making voting and counting at the street participatory budget meetings, representing a wide range of opinions from the community and ultimately selecting 12 of the 16 proposed renovation projects for implementation. However, the consultative voting that occurred in Wenling City, where the voting session also included a question-and-answer session with experts, is something that Yicheng Street needs to continue to think through (https://participedia.net/case/3)

Fifth is process monitoring. Throughout the renovation process of the old neighbourhoods in Yicheng Street, the community has the right to monitor and question the work of the implementing department. Community representatives were also able to investigate the progress of the project in real-time and continuously collect feedback from the public. This allows for effective and timely monitoring of the process to achieve the desired results. A tool like the one used in the participatory budget implementation phase in the West Lake District of Nanchang. (https://participedia.net/case/7432) However, the process may face new risks, such as a possible lack of initiative by the masses and the negativity of community workers. Accordingly, the Ecuadorian implementation approach could be further adopted, where participatory budget management is monitored by a special monitoring committee according to the policy characteristics [11].

What Went On: Process, Interaction, and Participation

The main initiatives are divided into five stages. The first stage is a preliminary investigation. Community representatives extensively solicit the needs and opinions of the residents. This stage also includes the finance and construction departments sorting out the basic situation of the old community on the street. The second stage is project promotion. This includes a collective meeting and an informal conference. The third stage is project selection. Community representatives will select 12 of the 16 proposed projects based on project reports. The fourth stage is project implementation. The Yicheng Government implements the implementation of the community renovation plan and accepts the supervision of community representatives. The fifth stage is the project assessment. Upon completion of the project, a team of experts conducts a performance assessment.

•  Pre-research phase

The governments of Yixing Street first select talents from each old community to form a community representative of the old community renovation project. They are responsible for the planning and implementation of the entire participatory budget project. Each community will widely solicit the needs and opinions of the residents in accordance with the renovation plan of the old residential area. Because satisfaction with community infrastructure construction and the importance of one's own opinions significantly impact residents' participation in community autonomy [12]. At the same time, according to the criteria for determining participatory budget projects, the finance and construction departments carefully check and sort out the basic situation of the old residential areas on the streets. They investigate the dilapidated situation of the communities on the spot. Based on the programme provided by community representatives, the finance and construction departments decide on 16 proposed projects. These projects include the renovation of the ground, the separation of rainwater, the renovation of parking spaces and the renovation of the greening of the old community. The projects involved 10 communities, 16 communities, and more than 7,400 households and more than 25,000 residents [13].

•  Project promotion phase

The government advocacy department convenes participatory budget meetings to promote the content, significance, role and workflow of participatory budgeting. Each community hold a collective meeting to select community representatives for participatory budgeting. The number of specific community representatives is determined and allocated by the leading group according to the proportion of the population living in each community. And then the governments hold an informal conference to announce the renovation plan, financial funds and revenue and expenditure estimates of the old neighbourhood of the street. The governments publicize the significance and role of participatory budgeting to the public through mass media, such as street internal websites, community bulletin boards, publicity boards, participatory budget brochures, etc. They also publish the name, construction plan and budget of the participatory budget project to be implemented. At last, they issue a form for soliciting comments.

• Project selection phase

The government departments collected and sorted out the feedback. They selected a date to officially hold the street participatory budget conference to introduce the overall economic situation and participatory budget situation of the street. Community representatives who participated in the street old community renovation project gave speeches in the form of PPT. Other community representatives voted to select 12 implementation projects from 16 alternative projects for the renovation of old neighbourhoods. A total of 136 people participated in the vote, including resident representatives and some industry executives. Voting and counting were held on-site, and the results were also announced on the spot.

• Project implementation phase

The governments hold a meeting of the members of the participatory budget leadership group to deploy the work responsibilities of each functional department. After the project is determined, the normal bidding procedure is carried out. During the implementation of the project, the work of the implementation department is subject to supervision and questioning by the community representatives. The community has the right to monitor and question the work of the implementing department. Community representatives can investigate the progress of the project in real-time and continuously collect feedback from the public. At the same time, neighbourhoods organize representatives to conduct overt and covert visits to the implementation of the project and give feedback to the street.

• Project assessment phase

After the implementation of the project, the finance department entrusts a financial audit and invites the neighbourhood people's congress, public representatives, and relevant experts to assess the project's implementation performance. The assessment results serve as the main basis for participatory budget improvement.

Influence, Outcomes, and Effects

This change in the introduction of an innovative democratic approach to participatory budgeting in Yixing has contributed to the full effectiveness of the residents' internal effectiveness. According to statistics, the number of participants in Yixing's participatory budgeting assembly was 136, involving 16 communities [14]. Through the combined efforts of the local government and residents, these projects were mutually agreed upon by the residents and could actually be profitable. Before determining the final project, a meeting is held with key leaders of the Yixing Finance Bureau, party representatives, resident representatives, and other relevant department heads. Information about each candidate project is presented in detail in this program, which helps to increase the recognition of the project. In addition, the government requires complete openness and transparency in project information and meetings and collects representatives from various parties for guidance and education through multiple methods such as invitation, scientific sampling, and active registration, which helps increase the trust of residents. Furthermore, the government will consult and estimate from professional companies in terms of budgeting and construction. Therefore, PB in Yixing Yicheng Street mainly considers the recognition and feasibility of the project.

According to the reports, a total of RMB 70 million was invested in Yixing City's participatory budget project from 2018 to 2019, covering a number of areas including ground and roadside-stone renovation in old communities, rain and sewerage separation in communities, car parking space renovation and greening renovation. Twelve community improvement projects were implemented and the lives of approximately 25,000 residents were improved [15]. Therefore, through the improvement of daily life infrastructure and the enhancement of community services, the participatory budgeting of Yixing City Yicheng streets has provided residents with a higher quality of life.

Analysis and Lessons Learned

The success of participatory budgeting in Yixing Yicheng Street lies in the extent to which the process has increased the scientific democratization of the government's decision-making process and achieved very effective gains. For example, it has restored public trust in the government, prevented the possibility of misuse of government finances and corruption, and achieved civic education in the decision-making process. More importantly, it has created an effective decision-making structure that accommodates a plurality of values and perspectives [16].

However, there are still many shortcomings, which can be studied and analyzed respectively in the following six aspects: inclusiveness, people control, consider judgment, transparency, efficiency, and transferability.

To begin with, Yixing Yicheng Street PB is lacking in its inclusiveness. Participants are mainly elected through elections. Although the elected representatives may have the support of most residents, they still lack objectivity because the residents are overwhelmingly elderly and children, even if the community selects some adults with higher knowledge levels as representatives according to a certain percentage [17]. Therefore, the final results may be influenced by the self-interests of the resident representatives.

Secondly, the steps in the process that are genuinely under the control of the residents are a very important part of this PB case. In this case, although the residents raised the problems, the final selection of the problems and the analysis of the problems were mainly led by the government. In addition, although the residents' representative participated in the final project selection, the process of implementing the project was still in the hands of the government department. Some scholars argue that local leaders trying to relinquish some power in the PB process can improve the democratic nature and development of local participatory approaches [18]. Thus, the level of control over the segments is at a weak level and less democratic in the whole PB activities.

And third, although the government has communicated the PB message clearly and there is a youth population with higher education, most residents lack the ability to think and judge projects on their initiative and have difficulty offering meaningful project suggestions. For example, the PB meeting process will involve a high level of numerical and financial literacy. Normally, residents may not have professional financial or fiscal knowledge, so this can lead to limitations for resident representatives to learn and discuss relevant issues [19]. Therefore, the lower ability of residents to think and make decisions throughout the process may influence them to make thoughtful and representative judgments, which may reduce the ultimate benefit of this PB exercise.

The fourth is that the real transparency of this participatory budget may be lower than expected. At first, most residents do not have the right to review project implementation because government departments have more power. Some academics suggest that the communist dictatorship system, influenced by the contemporary party-state system in China, may make the local government too much power and control in the PB process while affecting some of the rights of citizens in the PB [20]. As a result, residents may have a lower right to scrutiny, which may reduce transparency. In addition, most residents also have less trust in consultative democracy due to this, and many residents in Yixing Street believe that the power to decide on PB projects ultimately remains in the hands of the local government. Furthermore, there is a lack of effective public communication mechanisms. Although the Yixing city government has publicized or made information available to residents through internal street websites, community bulletin boards, bulletin boards, and paper brochures, it has not made it available to the public through more technological means. Therefore, the transparency of this participatory budget may be low.

Fifth, the efficiency of PB in Yicheng street of Yixing city can be evaluated in terms of both costs and outcomes, and although the costs in both organization and publicity got better results, the investment in participants or residents may be low because this PB in Yicheng street of Yixing city was mainly led by the local government and most residents were passive participants. Though participatory staff and street staff trained the participants, the majority of participants did not really understand it [21]. It has been suggested that citizen participation in decision-making may improve democracy, but a developed civil society needs to be nurtured and created through education [22]. Therefore, less knowledge training may reduce the democratic nature of PB activities in Yicheng Street, Yixing City.

Finally, the transferability of the innovation of PB in Yixing Yicheng Street may be weak. For one thing, the project is a municipal project involving nearly 200 million yuan and a duration of nearly three years. Some studies have shown that even innovations with the potential to improve local governance may be limited in their diffusion by funding, and relatively poor areas may be more constrained [23]. Thus, the transferability of innovations in this project may be limited by the level of government, finance, and time. In addition, there are large cultural differences or disparities in the education levels of residents in different regions of China. Some studies suggest that the process's effectiveness in PB may be differential due to economic differences and local background culture [24].

In conclusion, participants were more satisfied with the results of the reform of the old neighbourhood in Yixing City's Yicheng Street, and local newspapers as well as several media gave higher recognition and local internet forums were full of praise. This case tells us that when the government implements projects that involve the interests of citizens, such as road and bridge construction, school education, neighbourhood management, and medical care, it needs to increase citizen recognition and public participation. Participatory budgeting, on the other hand, is an effective way to promote a certain degree of project transparency and fairness by allowing citizens or participants to discuss and monitor project implementation and budget execution [25]. However, in China, due to the administrative system, public participatory budgeting may be regarded as the state budget, so in the future, the government may pass more regulations on PB to improve the democratic legitimacy of PB.

See Also

Main method - Participatory Budgeting https://participedia.net/method/146

References

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[2] Feng, Y. (2015). Thinking on participatory budgeting in urban grassroots streets under the background of fiscal and taxation reform. Zhifu Times. (24):38.

[3] Lin, Y. (2022). Wenling: Integration of "Participatory Budgeting" into Grassroots. Units Zhejiang People's Congress. (7):53-54.

[4] Wu, Y., & Wang, W. (2011). The rationalization of public budgeting in China: a reflection on participatory budgeting in Wuxi. Public Finance & Management, 11(3).

[5] Zhao, Z. & Yang, H. (2014) Research on constructing an open and transparent local government budget system: A case study of participatory budgeting practice in Wuxi, Wenling and Jiaozuo. Journal of Beijing Institute of Administration. (4):40-46..

[6] Xu, W., 2020. The Practice and Reflections of Participatory Budgeting --A example of Yicheng Street in Yixing City. Administrative Assets & Finance, 16(2).

[7] Frenkiel, E., 2021. Participatory budgeting and political representation in China. Journal of Chinese Governance, 6(1), pp.58-80.

[8] Wampler, B., & Touchton, M. (2017). Participatory budgeting: adoption and transformation.

[9] Baiocchi, G., & Ganuza, E. (2014). Participatory budgeting as if emancipation mattered. Politics & Society, 42(1), 29-50.

[10] Gasper, D., 1982. The Chinese National People’s Congress. In Communist Legislatures in Comparative Perspective (pp. 160-190). Palgrave Macmillan, London.

[11] Buele, I., Vidueira, P., & Guevara, M. G. (2020). Implementation model and supervision of participatory budgeting: An Ecuadorian approach applied to local rural governments. Cogent social sciences, 6(1), 1779507.

[12] Jiang, K. (2021) Analysis of Influencing Factors of Urban Residents' Participation in Community Autonomy: A Case Study of Xinhua Community, Yicheng Subdistrict, Yixing City. Rural Economy and Science and Technology. 32(7):274-277.

[13] Xu, W. (2020) Practice and Thinking of Participatory Budgeting: A Case Study of Yicheng Street, Yixing City. Administrative Assets and Finance. (16):29-30.

[14] Xu, W., 2020. The Practice and Reflections of Participatory Budgeting --A example of Yicheng Street in Yixing City. Administrative Assets & Finance, 16(2).

[15] Xu, W., 2020. The Practice and Reflections of Participatory Budgeting --A example of Yicheng Street in Yixing City. Administrative Assets & Finance, 16(2).

[16] Wu, Y. and Wang, W., 2011. The rationalization of public budgeting in China: a reflection on participatory budgeting in Wuxi. Public Finance & Management, 11(3).

[17] Xu, W. (2020) Practice and Thinking of Participatory Budgeting: A Case Study of Yicheng Street, Yixing City. Administrative Assets and Finance. (16):29-30

[18] He, B., 2011. Civic engagement through participatory budgeting in China: Three different logics at work. Public administration and development, 31(2), pp.122-133.

[19] He, B., 2019. Deliberative participatory budgeting: A case study of Zeguo Town in China. Public Administration and Development, 39(3), pp.144-153.

[20] Wu, Y. and Wang, W., 2012. Does Participatory Budgeting Improve the Legitimacy of the Local Government?: A Comparative Case Study of Two Cities in China. Australian Journal of Public Administration, 71(2), pp.122-135.

[21] Jiang, K. (2021) Analysis of Influencing Factors of Urban Residents' Participation in Community Autonomy: A Case Study of Xinhua Community, Yicheng Subdistrict, Yixing City. Rural Economy and Science and Technology. 32(7):274-277.

[22] Fewsmith, J., 2009. Participatory budgeting: development and limitations. China Leadership Monitor, 29, pp.1-14.

[23] Fewsmith, J., 2009. Participatory budgeting: development and limitations. China Leadership Monitor, 29, pp.1-14.

[24] Sintomer, Y., Herzberg, C. and Röcke, A., 2008. From Porto Alegre to Europe: potentials and limitations of participatory budgeting. International Journal of Urban and Regional Research, 32(1), pp.164-178.

[25] He, B., 2011. Civic engagement through participatory budgeting in China: Three different logics at work. Public administration and development, 31(2), pp.122-133.

External Links

Department of Finance of Jiangsu Province:

http://czt.jiangsu.gov.cn/art/2018/10/9/art_7939_7835707.html

Notes