Expanding Participatory Budgeting (KR0053)

Why is this commitment relevant to OGP values? Citizen participation

What is the public problem that the commitment will address? The Korean government introduced the Participatory Budgeting (PB) system in the central government’s budget process in 2018 to enhance fiscal transparency and democracy through citizen participation. The system allows citizens to propose publicly funded projects for the central government and participate in the budget planning process through activities such as setting priorities. However, the development process for projects in various sectors was insufficient because citizen participation was concentrated on the call for citizen proposals and preference voting at the beginning of the year. Furthermore, debates were held on limited topics such as certain social problems, making it difficult to find solutions for the fiscal problems of ministries promoting different projects.

What is the commitment? Under Article 16 of the National Finance Act (Budgeting Principles) and Article 7 (2) of the Enforcement Decree of the National Finance Act (Citizen Participation in the Budget Process), while continuing to operate PB, the government will expand citizen participation in the project development process in the following ways: 1) Proposal-type participation where citizens propose and develop projects Citizen proposals will be developed into concrete publicly funded projects through online calls for proposals, proposal contests, citizen visits to collect suggestions and policy meetings. The Participatory Budgeting Citizen’s Committee composed of more than 2,000 citizens, including 100 from the vulnerable classes, will be able to participate in the project development process and voice their opinions through votes on citizen proposals and on- and off-line discussions. 2) Debate-type participation by suggesting ways of improvement for various social problems Opportunities will be provided for citizens to suggest ideas in the process of responding to major social problems. In particular, existing debates originally hosted by the Ministry of Economy and Finance (MOEF) will be reorganized into calls for proposal-type debates (hosted by MOEF) and debates hosted by each ministry. The government’s solution will be suggested and citizen opinion will be collected. Debates should be held both on- and off-line for about a month.

How will the commitment contribute to solve the public problem? This commitment will address the problem of citizen participation being concentrated on calls for citizen proposal and preference voting and expand opportunities for development by adopting two types of participation; proposaltype participation and debate-type participation. Furthermore, the status of PB activities will be regularly examined to enhance the effect of citizen participation. Exchange and Peer Learning N/A Additional Information 2.4 billion won of budget for 2021 * Open to further discussion with civil society in the implementation process

Milestone Activity with a Verifiable Deliverable Start Date End Date The Participatory Budgeting Citizen’s Committee composed of members over the age of 19 reflecting the population ratio of gender, region and age will be formed and meet every fiscal year to ensure representativeness. The Committee will follow the reform schedule for year-round operation. May 2020 August 2021 August 2022 July 2021 July 2022 July 2023 MOEF will sort citizen proposals for the central government budget before sending them to each ministry to be reviewed for eligibility. Ministries will submit review results to MOEF. February 2021 February 2022 February 2023 April 2021 April 2022 April 2023 Hold online discussions on the Participatory Budgeting website to select topics for debate. September 2020 September 2021 September 2022 April 2021 April 2022 April 2023 Hold offline discussions to build on the results of the online debate for each issue. December 2021, March 2022 December 2022, March 2023 December 2021, April 2022 December 2022, April 2023 Hold debates for further development and votes on citizen proposals on the website. April 2021 April 2022 April 2023 April 2021 April 2022 April 2023 Carry out preference voting after the Participatory Budgeting Citizen’s Committee reviews the projects. June 2021 June 2022 June 2023 July 2021 July 2022 July 2023 Reflect the projects in the government’s budget through MOEF’s project review. June 2021 June 2022 June 2023 August 2021 August 2022 August 2023

Action Plan Review

Commitment 4.1. Expand participatory budgeting

● Verifiable: Yes

● Does it have an open government lens? Yes

● This commitment has been clustered as: Participatory Budgeting (Commitments 4.1 and 4.2)

● Potential for results: Substantial

Commitment Cluster 4.1 and 4.2: Participatory budgeting

Ministry of Economy and Finance Participatory Budgeting Division and Ministry of the Interior and Safety Local Finance Cooperation Division

For a complete description of the commitment, see Commitment 4 in South Korea’s 2021–2023 Action Plan.

Context and objectives:

Participatory budgeting has been mandatory at the local level since the amendment of the Local Finance Act in 2011. The law does not outline a precise definition of participatory budgeting, [1] but allows local governments to consider their particular context in the adoption and operation of participatory budgeting. In 2014, further amendments required local governments to attach citizen opinions to the budget draft. [2] The South Korean model for participatory budgeting builds on the Porto Alegre experience. It consists of a participatory council of neighborhood representatives elected by communities and mayor-recommended experts. They assume responsibility for discussing, evaluating, and prioritizing citizens’ proposals. [3] In 2018, the government also implemented a national participatory budgeting system known as My Budget. [4]

This cluster of commitments includes two initiatives to enhance participatory budgeting by central and local governments. At the national level, Commitment 4.1 intends to expand the Participatory Budgeting Citizens’ Committee and continue to facilitate online and in-person opportunities for citizens to submit proposals, as well as debates hosted by ministries on potential projects. Developing existing practices at the local level, Commitment 4.2 proposes yearly Citizen Participatory Budgeting processes, guaranteeing participation in all stages of the budget process, from preparation to the settlement of accounts. Through this initiative, the government will offer consulting to town, township, and neighborhood governments to develop tools for collecting citizen input, including surveys, public hearings, and electronic voting. [5] These commitments advance the OGP values of transparency and civic participation, offering access to information on budget development and expanding opportunities for citizens to provide input on government projects.

Potential for Results: Substantial

At the national level, the proposed activities have the potential to improve participatory budgeting by expanding the number of participants and taking steps to promote representation of marginalized groups. The national participatory budgeting system established a Citizen’s Committee of 400 representatives, assisted by 68 experts. In 2020, over 1,399 proposals were received, with 38 added to the final budget, representing approximately 244 billion won (224 million USD). These introduced projects such as wheelchair accessible buses, marine pollution surveillance, and counseling for sexual assault victims. [6] Commitment 4.1 plans to expand the Participatory Budgeting Citizens’ Committee to 2,000 representatives, with a composition reflective of the national population in terms of gender, region, and age. [7] Inclusion of women, children, and people with disabilities could expand the range of issues that are considered during the process. In addition, a more exhaustive online and in-person deliberation process could ensure that all initiatives included in the budget consider stakeholder perspectives. According to the Ministry of Economy and Finance Participatory Budgeting Division, the commitment intends to extend participation beyond early-stage opportunities, given that the existing process limits participation to the call for citizen proposals and preference voting. [8]

Under Commitment 4.2, developing tailor-made solutions could lead to the progressive adoption of citizen participatory budgeting as a permanent local government policy, according to the Ministry of the Interior and Safety Local Finance Cooperation Division. The Ministry did not clarify how many projects were to be implemented under this commitment. [9] Participatory budgeting has already allowed cities to address safety, sanitation, employment, and welfare issues. To illustrate, one city installed fire extinguishers to prevent fires in narrow alleys, while another city coordinated home repair visits for marginalized people with poor living conditions. [10] However, a 2020 study showed that there are multiple factors that influence the adoption of participatory budgeting policies, such as administrative capacity and the progressiveness of mayors and councils. [11] In some cases, a lack of political investment in participatory budgeting has limited its scope. For example, in Seoul, a new mayor reallocated a large portion of the budget for participatory budgeting to infrastructure projects in 2021. [12] Building local governments’ commitment to participatory budgeting can contribute to fiscal transparency by facilitating information sharing between citizens and budget authorities; enhancing bottom-up monitoring of municipal governments by citizens; and providing a public forum where citizens bond socially and create political consensus. [13] This, however, requires governments to make resources available for successful implementation of projects relevant to citizens. This commitment could also expand public engagement in participatory budgeting, which previously has only included a small portion of citizens due to the low level of awareness of opportunities to participate in the budgeting process. [14]

Opportunities, challenges, and recommendations during implementation

This commitment provides the government an opportunity to define the minimum requirements participatory budgeting mechanisms should include in order to improve these processes going forward. The proposed activities can also advance participatory budgeting in local governments that have made little progress, strengthen local politicians’ investment in participatory budgeting, and expand citizen engagement. During implementation, inclusion of vulnerable populations will require all materials to be adapted to the specific needs of each group (e.g., braille for people with visual impairments). The government should also consider citizens’ levels of familiarity with budgeting and public finance processes, which in some cases may require additional training. The following recommendations can strengthen this commitment’s implementation:

● Adopt rules of procedure for the national Participatory Budgeting Citizens’ Committee to guarantee that all proposals are evaluated following standardized criteria. Information on proposals must be publicly available during all stages of the process, including implementation of selected projects. Ministries must also provide citizens with feedback on their decisions to include or exclude a proposal.

● The government and the national Participatory Budgeting Citizens’ Committee could assess the proposals received to analyze whether affirmative actions should be adopted to include more participation of marginalized groups.

● The national Participatory Budgeting Citizens’ Committee could monitor implementation of prioritized projects.

● A local citizens’ committee, similar to the national Participatory Budgeting Citizens’ Committee, could be considered to provide a formal and permanent dialogue mechanism that reflects the particular characteristics of the community.

● The government needs to consider the needs of specific groups, such as the elderly and the disabled, when designing and implementing information collection tools to guarantee equal participation.

Results Report

Commitment 4. 1: Expand participatory budgeting

This commitment’s milestones were completed but early results were offset by a contraction in annual national participatory budgeting. The Participatory Budgeting Citizen’s Committee, comprised of one to two thousand people (size and composition by gender, vulnerability status, age, and residence determined in accordance with the population census) solicited citizen inputs for participatory budgeting annually. [28] The Ministry of Economy and Finance coordinated relevant ministries and the Participatory Budgeting Citizen’s Committee to: (i) solicit proposals from the public for possible inclusion in the following year’s national budget (January–February); (ii) examine and determine projects eligible for consideration as well as respond to all proposals (February–March); (iii) facilitate online public discussion and voting to narrow eligible proposals (April–July); (iv) facilitate offline discussions to further develop selected proposals, with about 100 persons participating in each session (June–July); and (v) consider the potential impact of projects as well as citizen preferences, select projects, and include them in the annual national budget request to the National Assembly (August). [29] In addition, broader public participation processes were enhanced and systematized utilizing the mybudget.go.kr portal to publicize opportunities, solicit and document input, and keep the public informed of participatory budget decisions and projects, including monitoring of execution. However, the operation and inputs of the Participatory Budgeting Citizen’s Committee could be more open, transparent, and publicized.

While this commitment made improvements to the system for participatory budgeting, the national participatory budget has been significantly cut in recent years. The first national participatory budget in 2018 was 42.2 billion KRW. Reflecting the previous administration’s policy prioritization, the participatory budget more than doubled in 2019 to 92.8 billion KRW, and then continued to increase to 105.7 billion KRW (2020), 116.8 billion KRW (2021), and 142.9 billion KRW (2022). The budget then decreased to 50 billion KRW in 2023 and 17 billion KRW in 2024. [30] While there is some correspondence with the previous and current administrations’ respective fiscal stances [31] i.e., government spending as share of GDP expanding from 20.38% in 2018 to 28.65% in 2022 and contracting in 2023 (25.32%) and 2024 (24.85%), the participatory share of the overall budget shrunk by a proportionally larger share than warranted by the overall contractionary national budget trend. The participatory budget started at 0.01% of the overall budget in 2018, rose to 0.02% in 2019–2022, and shrunk to 0.007% and 0.002% in 2023 and 2024 respectively. [32] According to government stakeholders, this is because rather than focusing on quantitative expansion of citizen proposals, the government is focused on participation in government budget formulation, performance management, and execution. [33] Other trends also suggest de-prioritization of participatory budgeting within the current administration’s policy priorities. The Ministry of Finance changed the name of its Participatory Budgeting Division to the Fiscal Policy Cooperation Division in 2023 and reduced the proportion of participatory budgeting in the division’s responsibilities. The government stopped publishing press releases on the participatory budget as of late 2022 and efforts to expand participatory budgeting are not continued in the 2023–2027 OGP action plan. [34]