Beginning in FY 2005 Ichikawa's Participatory Budgeting scheme involves citizens in the distribution of tax dollars to NGOs and citizen activities. The project empowered citizens by raising awareness on the use of taxes in the community development process.
Problems and Purpose
Beginning under the name "The 1% Support Scheme" before becoming the "Ichikawa Citizen Activity Support System," Ichikawa's participatory budget has three main purposes:
- Increase citizens’ motivation to pay taxes (Laratta, 2014),
- Gain support for the new budgetary policy introduced by Mr Chiba (Sintomer et al., 2013),
- Increase citizens awareness and involvement in the community through the support of non-profit organizations (Matsubara, 2015).
Background History and Context
Since 2000 the process of budget-making in Japan has been revisited. Up until that time the central government was in charge of regulating local governments’ budgets. The process of decentralization has resulted in promoting forms of participatory budgeting (PB) at local level. With the Omnibus Decentralization Act, mayors of municipalities have been given authority over the budget-making process and have been emancipated from their subordinate relationship with the central government. When the concept of citizens’ participation was firstly introduced, it was not perceived positively by many since it presented a possible threat to representative democracy. Some mayors, though, found in PB a valid administrative tool especially in a situation of financial crisis (Matsubara, 2015) as the case of Ichikawa demonstrates.
The 1% Support Scheme was introduced in Ichikawa in 2004 (FY 2005) by former mayor Mr. Mitsuyuki Chiba. He was first elected in 1997 and re-confirmed for three consecutive mandates. Since the very beginning Mr. Chiba was driven by a strong will to strengthen the local community by collaborating with non-profit organizations (Laratta, 2014) which started to flourish after the NPO law, that promoted non-profit activities, passed in 1998 (Matsubara, 2015). This vision of partnership has been defined by Mr. Chiba as “Kyo-Do” which literally means “work done in cooperation” (Laratta, 2014).
Although willing to promote collaboration with such organizations, Ichikawa was in an unstable financial situation at the time so that the allocation of funds to services was problematic since there was not enough budget to satisfy all citizens’ needs. Mr. Chiba found in the 1% Scheme, inspired by the similar Hungarian model, the solution to this problem by allowing taxpayers to decide which organization to support, indirectly suggesting what issues were to be considered most important (Laratta, 2014).
Organizing, Supporting, and Funding Entities
Ichikawa’s Participatory Budgeting "1% Support Scheme" was originally implemented by the city’s mayor Mitsuyuki Chiba and is managed by the Citizen Volunteering Unit of the Directorate for Relations with Non-profit Organizations of Ichikawa City Municipal Government. The Unit fulfils various duties and has a vast range of responsibilities, the most important of which is the assessment of non-profit organizations’ eligibility through a process of selection based on specific qualifications. Other activities carried out by the Unit involve: public marketing to increase public awareness and participation, giving support to local communities and organizations interested in the programme, offering guidance to citizens in the voting process and evaluating and further developing the scheme (Laratta, 2014). The budget is constituted by 1% of resident taxes which amounts to approximately 3.8 million yen considering a population of 474,000 inhabitants, 230,000 of which are taxpayers (Sintomer et al., 2013). This budget is then transferred, in proportion to the votes received, to a non-profit organization which can not receive more than 50% of the stated operating cost for the project (Laratta, 2014). The organization needs to spend half of this amount towards the voted project and half can be devolved towards other activities under the condition that these, as well, are beneficial to the community (Ichikawa City, 2015).
Methods and Tools Used
Ichikawa's system is an innovative form of Participatory Budgeting (PB) for two reasons: the budget derives from citizens’ taxes and the organizations funded are nonprofit (NPO). NPOs publicly present their projects and activity proposals in order to allow residents to choose up to three organizations which best suit their needs. Funding is then distributed in accordance to the number of votes received hence the number of residents who have decided to devolve 1% of their taxes to financially support specific projects (Alliance for Healthy Cities, 2008). The combination of tax payment and participation can be considered as the practical expression of the principle held by American colonies against the British Crown of “No Taxation Without representation” (Sintomer et al., 2012).
Deliberation, Decisions, and Public Interaction
The 1% Support Scheme ran in Ichikawa for two years, from FY 2005 to FY 2007, before being renamed the "Ichikawa Citizen Activity Support System". The process, however, has varied little and is carried out in four stages.
In the first stage, which stretches from January to February, non-profit organizations (NPOs) need to become eligible for funding by registering and submitting a form to the City office, containing a description of the type of activities they specialize in and the program they are willing to propose. Once non-profit organizations have enrolled to receive support from the 1% scheme, they will no longer be able to receive any other kind of fund from other donors (Ichikawa City, 2015).
Following this, forms and projects will then be assessed by a committee formed by four academics and three selected citizens recruited on the basis of proven past experience working for a non-profit organization. In order to be taken into consideration as potential fund receivers, each organization needs to meet specific requirements such as being active for over a year at the time of application, have an office in Ichikawa City, not be involved in any illegal dealing and not have taken part in political or religious activities (Laratta, 2014).
Once the screening process has terminated, the committee publishes on the Ichikawa City website a short-list of non-profit organizations. The latter will then make their projects visible by informing the citizens on the effectiveness of the programs, how these work and how the funds will be spent. They do so by distributing flyers and organizing interactive public speeches and talks (Matsubara, 2015).
In the third stage of the process resident taxpayers and volunteer workers are called to vote in June and are allowed to choose up to three organizations. There are several ways in which citizens can vote: by filling out the voting forms they can find in the local newspaper, in magazines and flyers; in person at a voting station in the Town Hall by presenting an ID card; by filling out the postcard received with their tax note; electronically via email (Laratta, 2014). The latter has proven to be the preferred voting system above all (Matsubara, 2015).
In the final stage funds are distributed according to the amount of votes received by each non-profit organization which, in the name of transparency, once the project has been terminated, is required to submit a report later published on the Ichikawa City website (Laratta, 2015).
Influence, Outcomes, and Effects
The Ichikawa experience has been very influential in Japan to the extent that other municipalities adopted a similar scheme. The “1 percent summit” organized by the Ichikawa administration in 2009 helped spread the knowledge about participatory budgeting and created a network of cities interested in implementing such model of community development (Sintomer et al., 2013). The innovation in the 1% Scheme is represented by the use of non-profit organizations in order to satisfy citizens’ needs. The other municipalities that adopted this method following from the Ichikawa example are: Ichinomiya, Oushu, Ohita, Eniwa, Yachiyo, Izumi, Ikoma and Saga (Matsubara, 2015).
The peculiarity of the 1% Support Scheme is that the money goes to non-profit organizations. In the list of the positive outcomes, in fact, it can be added that before the 1% ordinance passed non-profit organizations were only given a grant of 2 million yen, an amount which has significantly increased since the ordinance. This not only allows for the budget allocation to mirror more closely the citizens’ necessities, but also stimulates the creation and involvement in grassroots organizations.
Between 2005 and 2014, the number of NPOs proposing projects, increased from 81 to 133 and the funded amount has varied from 12 million yen to 15 million yen (Ichikawa City, 2015). The Scheme produced significant outcomes in terms of the positive impact the chosen projects had in bettering the community and helping vulnerable groups. One of the projects, for example, provided swimming lessons for persons with mental disabilities (Sintomer et al., 2013). In 2014 the Scheme provided funding for 117 local non-profit organizations and their projects which varied from organizing home sing lessons for elderly people, to cleaning and protecting a local river or helping people connect and integrate if new to the city (Laratta, 2014).
On a negative note, the Scheme did not attract as many voters as hoped. Although voter turnout doubled between 2005 and 2014, the amount of votes for the year 2014 is still very low: approximately 11,000 (Ichikawa City, 2015) against approximately 230,000 taxpayers. It has to be said that the increased percentage is also due to the inclusion, in 2007, of the volunteers of non-profit organizations as part of the population having right to vote which makes the proportion of voters against the number of taxpayers even less encouraging.
Analysis and Lessons Learned
Participatory Budgeting (PB) is a democratic practice which has attracted the attention of many countries since its successful application in Porto Alegre (Brazil) in 1988. The first lesson learnt by looking at the Ichikawa case study compared to the Porto Alegre one, is that PB does not have a uniform form across the world as each one is structured to fit in a different kind of environment (Sintomer et al., 2012).
One of the critiques often associated to PB, in general, is to what extent is to be considered inclusive. In Porto Alegre levels of participation were very high attracting citizens from different socio-economic backgrounds. The poorest inhabitants were, however, the ones who, for various reasons, engaged the least in the decision-making process (Smith, 2009). In Ichikawa participation was limited to taxpayers and NPO volunteers so that a large part of society was excluded.
As well, the role of “taxpayer” was very closely related to the figure of businessmen often commuting to Tokyo for work. Women and children who were the most involved in community activities were then excluded from the decision-making process. This raised the question of whether discrimination could ever be entirely absent in a democratic system. Schumpeter (1976) argued that this is not possible as there will always be forms of social exclusion (Schumpeter, 1976). The Support Scheme in Ichikawa, in fact, left behind unemployed, students and housewives creating doubts on whether citizens’ involvement should be limited by strict qualifications such as being a resident, having a taxable income or volunteering for NPOs (Sintomer et al., 2012).
Following an analysis, however, Ichikawa’s administration modified the ordinance and in 2007 introduced in the scheme the inclusion of volunteers for non-profit organizations in the voting process (Laratta, 2014). The community service points, which are distributed for voluntary work, are converted into money vouchers which allow their bearers to cast their vote (Sintomer et al., 2012).
Another issue found in the design of the scheme is related to the necessity to include the number from the tax form or a copy of driving licence or life insurance when casting the vote. Since citizens are reluctant to providing such sensitive information, levels of participation are quite low. The administrative expenditure for the running of the scheme also represents an obstacle as it detracts money from the available funds aimed at the NPOs chosen by the citizens. The cost of the NPO division which manages the scheme is of approximately 10 million yen a year. The activities run by the NPO are also becoming expensive as the printing of the 1% newsletter, for example, costs approximately 5 million yen (Laratta, 2014).
This problem of inclusiveness was worsened by the lack of an interactive process of deliberation where even non-voters could publicly express their opinions and concerns. On the other side, this exclusion, represented an incentive for citizens to take part in NPOs or set up new ones. The 1% Support Scheme in Ichikawa can be considered, to a certain extent, the achievement of what Rousseau defined as the “Common Good” (Rousseau in Schumpeter, 1976 p. 250). Schumpeter argued that there can not be a “uniquely determined common good that all people could agree on” (Schumpeter, 1976 p. 251). The common good, though, can be achieved if this is intended as the good of the community as a whole, aimed at satisfying everyone’s different necessities. In the case of Ichikawa the possibility that voters have to choose up to three projects is the expression of how everyone’s needs can be taken into consideration especially because every single organization that receives votes is given financial support.
The argument of what represent the needs of the citizens leads to the analysis of another critique to popular participation proposed by sceptics who believe that citizens lack the competency and skills to make political judgments (Smith, 2009). In the case of Ichikawa, though, the implementation of PB was instrumental exactly because the local government was unsure on which of the necessities of the population to prioritise and how to equally distribute the budget. The votes of taxpayers and volunteers represented an asset to the local administration as it granted an equal distribution of resources which coherently followed the community’s needs. This process of participation not only empowered citizens but also rose the level of awareness as it actually stimulated the members of community to think about the problems that surrounded them.
The implementation of the 1% Support Scheme laid the basis for the creation of a “participatory society” (Pateman, 1970 p. 44 ) in Ichikawa; participation which went beyond the right to vote, but encouraged people to actively contribute to the development of the community by setting up more and more NPOs. As stated by Cole, in fact, individuals are only able to “learn democracy” by participating at local level and in local associations (Cole in Pateman, 1970 p. 38).
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