Begun in 2012, Seoul's system of Participatory Budgeting places emphasis on open proposals and deliberation. Although resource intensive, Seoul's PB is the first to be enacted in a city of over 10 million people and has a total budget of 50 billion Won (40 million USD).
Problems and Purpose
Seoul City Council introduced participatory budgeting in response to public demand, vocal distrust and questioning of government spending, an inefficient public sector, and deficient or non-existent systems of fiscal transparency.
Participatory budgeting promotes the direct participation of citizens in the process of budget allocation and oversight. The system in Seoul was intended to have a preventive function to reduce populist policies and bureaucratic processes by heads and assemblymen of local governments leading to the waste or inefficient use of public resources. It also was seen as a good way to complement local assemblymen’s lack of professional knowledge that has been pointed out as a prevalent problem in the city's local assemblies.
Background History and Context
The first participatory budgeting system in the world started in the city of Porto Alegre in Brazil in 1989, and it has spread all over the world. Citizens’ participation in the budget decision process improved direct democracy, and has increased financial efficiency and transparency. The success of Porto Alegre made the UN and the World Bank praise the system as one of the most innovative ways to get transparency in administrative works.
In South Korea, the movement to enact local ordinance for participatory budget was triggered by a proposal made by a minor progressive political party in 2002. In 2004, Bukgu District Office in Gwangu, one of the big cities located in southern part of South Korea, enacted its local ordinance for participatory budget first, and the ordinance spread to the other cities such as Ulsan and Dajeon. However, the speed was not fast enough. In the meantime, the Roh Muhyun government, also known as the “Participatory government” in South Korea, recommended local governments introduce the system. In August 2005, the Korean government revised Local Finance Act to let heads of local governments allow citizens to participate in the decision-making process of their budget. The Act prescribed concrete ways for the system such as budget size, processes to get citizens’ opinions, and how to implement the system in local governments. However, local governments at first hesitated to introduce the system because they felt it was an additional administrative burden, and some local governments operated the system just in name only.
Participatory budgeting in South Korea met a dramatic change in the local election in 2010. Then, the ruling Democratic Party set forth the “participatory budgeting system” as one of its election pledges. Many candidates of the Democratic Party were elected as heads of Districts and the City Council in Seoul. Naturally, this result increased the public’s interest in the participatory budgeting system.
The participatory budgeting system in Seoul started with discussions between its executives and its municipal assemblymen in 2010. Civil society organizations, experts, and the budget department in Seoul City government started to discuss it on January 2012. Many workshops and meetings for the system were held.
As a result of a five month-long discussion among city officials, municipal assemblymen, and relevant civil society organizations, in May 2012, Seoul City Council enacted the ordinance of the participatory budgeting system. After Wonsoon Bak, who had wide experience in the civil society movement, became the mayor of Seoul in 2014, the participatory budget system pushed ahead more intensely. Seoul became the first city in the world whose population is over 10 million with more than twenty administrative districts to introduce the participatory budgeting system. The system has been evaluated by academics as one of the best examples that reflected values and principles of the participatory budgeting system.[1,2]
Organizing, Supporting, and Funding Entities
Seoul City Council passed an ordinance ordering the establishment of a system of participatory budgeting in May 2012. The decision was the outcome of a five-month multi-stakeholder deliberation between city council executives, municipal assemblymen, civil society organizations, experts, and the budget department in Seoul City government. Wonsoon Bak became mayor in 2014 and has dedicated his term to the promotion and development of participatory budgeting.
Seoul City Council determined the size of the participatory budgeting to be 50 billion Won (approximately 43 million US dollars), 2.2% of the total city budget of 23,000 billion Won (equivalent to 19.7 billion US dollars).
Participant Recruitment and Selection
The number of members for the General Committee that decides the final participatory budget in Seoul was decided to be 250 in order to involve as many citizens as possible. At least three-fifths of the members must be selected by public invitation which is extended to any ordinary citizens. If citizen applicants are above the number allotted, an open casting lot is drawn to determine who is going to be in the committee.
What is peculiar is that there are additional characteristics to be considered, such as gender and age. It should also guarantee participation of social minorities such as the physically-challenged, single parents, senior citizens and multi-cultural families (one spouse is a foreigner). Seoul City tried to reflect minority issues in the Committee as much as possible. Specifically, Seoul City Government and Seoul City Council could recommend 25 individuals as members respectively and 25 District Offices can recommend one member each, which in total accounts for 30% of the 250 committee members. Another 150 members of the committee—6 individuals from each of the 25 districts—are selected by applicants. If the number of applicants is over 150, the committee members are selected by open casting lots. The remaining 25 seats are filled by individuals from 25 civil society organizations that are selected by another lottery drawn among candidate civil organizations.
Methods and Tools Used
Participatory budgeting is an innovative and democratic mechanism that enables ordinary citizens to get involved in the decision-making process of allocating public budgets. In the process, citizens can provide input regarding their priorities and often even change the direction of policies. The World Bank states that participatory budgeting systems provide citizens more access to budget information, increase transparency and reduce corruption in the public sector, eventually enhancing the government's trustworthiness. Furthermore, citizens’ direct participation in providing opinions, making decisions, and solving problems for the community where they live is desirable for making society more democratic and sustainable. In particular, citizens’ participation in budget and allocation decisions is significant in that it can have an effective influence exerted directly by the public because each item on the list of plans in the government, both central and local, is based on budget schedule.
Seoul City Council has also implemented a Participatory Budgeting School which holds open meetings to introduce residents to the system in an attempt to encourage and prepare as many people as possible for participation.
What Went On: Process, Interaction, and Participation
The main functions of the participatory budgeting system in Seoul are:
- gathering opinions for mid- and long-term budget plans, and big business investments;
- deliberating ideas and plans;
- submitting the results for an overall budget plan to the City Council; and
- evaluating the business plans of the participatory budget.
In the ordinance of the participatory budgeting system in Seoul, the committee can provide its inputs in every budget set up by the Seoul City Government. In 2012, a conference for the participatory budgeting system was held. The conference had the time to coordinate its opinions through briefing sessions and discussions, and submitted the result to Seoul City Council. In the Council, the size of the participatory budget was set at 50 billion Won (approximately 43 million US dollars). The total budget of Seoul City was about 23,000 billion Won (equivalent to 19.7 billion US dollars), which means the participatory budget of Seoul was only 2.2% of its total budget. However, considering time constraints and a lack of professional knowledge, the committee could not review every budget of Seoul and submit its opinions to the City Council in time.
Public Opinions Gathering Phase
The participatory Budget Committee could request that Seoul City Government and twenty-five District Offices conduct an administrative review on the opinions that it gathered through local committees and citizens’ propositions. Each Local Participatory Budget Committee in each district could request a budget for its business plan within the budget of three billion Won (three million USD), and any ordinary citizens who want to participate in the budget decision process could suggest their ideas or plans through the Internet, mail, and direct visit to the Committee.
Deliberation and Reflecting Phase
For the purpose of effectiveness and efficiency, each Local Committee in twenty-five Districts reviews the business plans that were proposed in their Districts. After that, every subcommittee under the General Committee reviews the business plans in its field. Subcommittees are divided into eight sections: construction, economy and industry, park, traffic and housing, culture and physical training, health and welfare, women and childcare, and environment. With regard to the business plans introduced to the General Committee, all 250 members of the Committee decide final business plans of the participatory budget by majority vote. Seoul City Government finally submits the budget plan including the participatory budget to the City Council.
In 2013, the Act was revised so that the ratio of men and women in the number of chairmen of the subcommittees should be the same. In 2015, projects of Seoul City and Districts were separated in the participatory budget to increase clarity and fairness in decision making, and an electronic ballot system was introduced to increase efficiency and transparency of the decision-making process for the final budget in the General Committee.
Influence, Outcome, and Effects
The system, when managed well, helps establish financial democracy, supplement representative democracy, strengthen citizens’ role of control and bring about collaborative governance. So far, one cannot say with confidence that they have all been achieved. However, even though the portion of the participatory budget is only 2.2% of the whole budget, Seoul citizens have started to think of their roles in the decision-making process and the workability of the system. Seoul citizens changed their roles from object to subject of responsibilities and rights.
Seoul City is the last local government in South Korea that introduced participatory budgeting. The budget covers people commuting to Seoul from other areas as well as Seoul citizens. It is the first case in the world for a big city like Seoul to introduce this participatory system. Even though its history is just four years old, in this time, Seoul citizens learned that balanced composition of the Committee, fairness and transparency of decision making process, and citizen’s voluntary participation are very important for the success of the system. Indeed, participatory budgeting is not just a tool to get the required budget—the most crucial aspect of the process is to provide citizens with a venue to understand and discuss issues in the community where they live and come up with solutions to the issues for the benefit of the community.
Experience in participatory budgeting is an intangible civic asset. If it is managed well, it can raise trust among citizens in governments, confidence in commonly shared vision, and cooperative networks between a government and the public. Development of participatory budget systems requires basically strong political wills of heads of local government, cooperation of public officials, and support of local councils. However, the most substantial elements are properly played roles of civil society, and continuous interests and participation of the public in general.
Analysis and Lessons Learned
Too many business cases have to be reviewed
In 2014, out of 1,533 propositions, 560 projects were introduced to the General Committee. Finally, 352 projects were decided as the participatory projects of 2015. This means that 250 members of the Committee should review all 560 projects over a short period of time. Some of the members have complained the time for review given was too short, and other members have even confessed to their lack of professional knowledge.
Intervention of District offices and fierce competition among Districts
In 2014, public officials in Seoul City and Districts were banned from participating in the Committee. Since then, city officials’ direct interventions were not visibly detected, but some citizen members of the Committee said in a survey that they felt the process was not carried out in a fair manner due to District Offices’ interventions.
In 2014, the budget gap between the most received District and the least received District was 4.5 billion won (4.5 million US dollars). Considering the total budget of 50 billion won, the difference was considerable. One of the main reasons is intensifying competition among Districts. Competition often delivers good results, but if the competition is too fierce, it could cause unexpected side effects. Officials in some Districts complained that the system was misused by Districts to get additional budget, and others thought the process itself, even though the size of the budget was not big, was an extra burden added to already mounting administrative works.
Excessive burden to Districts
Officials in District Offices said what was included in the citizen’s propositions for the participatory budget was nothing but titles and brief explanations. The rest of the work related to the propositions went directly to officials in District Offices, who have to come up with detailed business plans and estimate the budget for the plans in detail. Officials appealed that they were overburdened, and they had trouble managing all the additional tasks.
 Im, Tobin, Hyunkuk Lee, Wonhyuk Cho, and Jesse W. Campbell. "Citizen preference and resource allocation: The case for participatory budgeting in Seoul." Local Government Studies 40, no. 1 (2014): 102-120. https://www.researchgate.net/profile/Wonhyuk_Cho/publication...
 Choi, Intae. "What explains the success of participatory budgeting? Evidence from Seoul autonomous districts." Journal of Public Deliberation 10, no. 2 (2014): 9. https://delibdemjournal.org/article/id/482/
Gwon, S. (2014, April 8). Participatory Budget System in Korea. The Weekly Kyunghyang. Retrieved from http://weekly.khan.co.kr/khnm.html?mode=view&artid=201404011055571&code=113.
Han, Y. (2014). Outcome of the Participatory Budgeting System in Seoul (Rep.). Seoul: Seoul City.
Lim, S. (2014). Participatory Budgeting System in Seoul (Rep.). Seoul: Seoul City.
Seoul PB Committee. (2015). Retrospect of the Participatory Budgeting System in Seoul. Seoul: Seoul City.
Song, C. (2014). Making a community with participatory budget (Rep.). Seoul: The Hope institute.