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Background: Challenges & Objectives
Background
Before the introduction of the participatory budgeting (PB) system, the budget of Seoul City had been allocated and spent, in most cases, in accordance with the government-led process outlined by the Seoul City Ordinance on Financial Operation. Every July, the Ministry of the Interior distributed the budgeting guidelines to the local governments, which then delivered it to all departments, so that they could make budget allocation decisions for next year based on the guidelines and submit their budgets to Seoul Metropolitan Council 50 days before the beginning of the next fiscal year.
Challenges
The biggest problem with this budgeting process is that it does not sufficiently reflect the opinions of citizens as taxpayers, who are affected most directly by the financial plan. This top-down approach to budgeting based on the decisions made by city officials and a small number of experts had been accepted as standard procedure and those who were able to express, as well as how they expressed, their opinions about the budget had been determined exclusively by the governments.
Since the launch of the local government system in Korea in 1995, the government has introduced a wide range of direct democratic projects, such as the “Citizens’ Suit,” “Recall Election,” and “Citizens Initiative,” in a bid to allow the local government system to take root and citizens to exercise their right to participate in the decision-making process.
Unfortunately, however, the government made little effort to lay the foundation for the direct democratic process in the area of finance in public administration. Even in the late 1990s, when the basic framework for citizen autonomy was established with the enactment of the Local Autonomy Act and Local Finance Act, the PB system was excluded from any discussion in the field of public administration. It was only in 2003 that the Presidential Committee on Government Innovation and Decentralization finally included the adoption of the PB system in its “Roadmap for Decentralization.”
Civic society, on the other hand, showed interest in making the PB system law as early as 2001. In 2013, the Budget Monitoring Network, a government budget watchdog, officially proposed the introduction of the PB system to local governments, which motivated civil society organizations in all regions to call for the enactment of a PB ordinance in each region.
The top-down approach to the budgeting process prior to the introduction of the PB system excluded taxpayers, the main agent of financial democracy, from the area of finance, an important axis of public administration. Without citizen engagement, the traditional budgeting process was fraught with misallocations of public financial resources and failed to reflect local residents’ needs for funding in their everyday lives.
Since the launch of the local government system in Korea in 1995, the government has introduced a wide range of direct democratic projects, such as the “Citizens’ Suit,” “Recall Election,” and “Citizens Initiative,” in a bid to allow the local government system to take root and citizens to exercise their right to participate in the decision-making process.
Unfortunately, however, the government made little effort to lay the foundation for the direct democratic process in the area of finance in public administration. Even in the late 1990s, when the basic framework for citizen autonomy was established with the enactment of the Local Autonomy Act and Local Finance Act, the PB system was excluded from any discussion in the field of public administration. It was only in 2003 that the Presidential Committee on Government Innovation and Decentralization finally included the adoption of the PB system in its “Roadmap for Decentralization.”
Civic society, on the other hand, showed interest in making the PB system law as early as 2001. In 2013, the Budget Monitoring Network, a government budget watchdog, officially proposed the introduction of the PB system to local governments, which motivated civil society organizations in all regions to call for the enactment of a PB ordinance in each region.
The top-down approach to the budgeting process prior to the introduction of the PB system excluded taxpayers, the main agent of financial democracy, from the area of finance, an important axis of public administration. Without citizen engagement, the traditional budgeting process was fraught with misallocations of public financial resources and failed to reflect local residents’ needs for funding in their everyday lives.
Objectives
Seoul City adopted the participatory budgeting system, which allows citizens to propose how and where to spend a portion of the citywide budget and then has the Participatory Budget Council deliberate on the proposals, as a solution to the lack of citizen participation and failure to reflect their opinions in the budgeting process.
Actions& Implementation
The ultimate purpose of Seoul City’s PB system is to promote citizen engagement in the budgeting process. To that end, Seoul City holds discussions on how to improve the system early every year with the Participatory Budgeting Committee, civic organizations, and financial experts.
For this year’s PB management, Seoul City formed a financial democracy taskforce and held over 20 discussions to draw up plans for PB projects.
Any resident of Seoul is welcome to propose PB projects via the Internet, by mail, or in person over a period of 40 days from March to April every year.
The following is a summary of the process through which PB projects are prioritized:
- 1. Review of project feasibility by each relevant office in terms of legal, economic, and various other factors
- 2. Presentation by citizens who proposed projects and on-site inspections by citizens
- 3. Written reports on project feasibility, efficacy, and budget by civil servants in related areas
- 4. Evaluation of project feasibility, efficacy, and benefits through discussions and deliberative polls
- 5. Selection of top 30 percent of projects in each category at joint public-private meetings and prioritization of the projects in accordance with the evaluation by all Participatory Budgeting Committee members and a majority vote.
- 6. Final decisions made on project priorities based on the approval of the Participatory Budgeting Committee members (40 percent), m-Voting (50 percent), and Budget School members (10 percent).
- 7. Follow-up monitoring of the PB projects by the Participatory Budgeting Committee to identify any budget waste and ensure the smooth implementation of the projects.
Impacts & Replication
The greatest achievements of the PB system in Seoul City are that it has encouraged citizens to participate in the most closed-door process of fiscal decision-making, enhanced transparency in the management of public funds, helped identify the problems closely intertwined with citizens’ everyday lives, and thus improved financial democracy and secured taxpayers’ control over the budgeting process. Moreover, numerous projects have been proposed for underprivileged people and those who have fallen through the cracks of the traditional budgeting process. Also, the wide array of local projects developed by citizens to address the problems in their everyday lives has enhanced the self-sustainability of the local districts, which has in turn contributed to the sustainability of Seoul City’s PB system. The following is a list of the projects that have been proposed and prioritized by citizens.
1. Creation of Eunpyeong-gu Sharing Center (KRW 1.2 billion)
- The world’s first sharing center created through a participatory project proposed by a citizen in 2013. It won the grand prize at the 2015 Creative Seoul Awards in the Innovation category.
2. Jung-gu Safe Village for Women (KRW 230 million)
- This project was based on an idea proposed by students majoring in police administration at Dongguk University as a way of promote the safety of women when walking alone at night. It was chosen in 2015 and won the grand prize at the 1st Korean Crime Prevention Awards held by the Seoul Metropolitan Police Agency and the daily newspapier Joongang Ilbo.
3. Seongbuk-gu Multicultural Library (KRW 340 million)
- Seoul City’s first multicultural library, opened in Seongbuk-gu, serves as an education center for the over 9,000 multicultural residents living in the Seongbuk-gu area. Through books, it aims to help local residents better understand diverse cultures and improve their communication skills.
4. Forest Book Bus in Ssangmun Park on Choansan Mountain, Dobong-gu (KRW 100 million)
- A children’s library run by local volunteer workers. A Dobong-gu-based bus company donated a large bus, which Dobong-gu remodeled to create the library.
5. Gwangjin-gu Toy Library (KRW 286 million)
- A toy library with over 600 toys that visitors can rent for up to two weeks. This project was chosen in 2015.
Expectancy effects & Need for Improvement
To promote the PB system, Seoul City formed a team of seven civil servants from the Planning and Coordination Office working in areas related to financial management, and tasked them with the operation and administration of the system.
There is also a budget team in each of the 25 local districts, the members of which include one or two civil servants in charge of the PB system who serve as liaisons to promote cooperation between Seoul City and the local district. In addition, Seoul City operates the Participatory Budgeting Committee, consisting of 250 citizens, and there is a local participatory budgeting committee in each of the 25 local districts.
Seoul City sets aside KRW 50 billion every year for the PB projects, which accounts for as much as 31.7 percent of the KRW 157.1 billion in available public funding, excluding uncontrollable expenditures and mandatory spending, in the citywide budget of KRW 27.5038 trillion (in 2016). Over the last five years, citizens have proposed 10,967 projects, requiring funding of KRW 3.2617 trillion (average of KRW 652.3 billion f 2,193 projects annually), and a total of KRW 240.6 billion has been spent so far for 1,993 PB projects.
It has been Park Won-soon, the mayor of Seoul, who has played the most decisive role in securing financial resources. The PB system was Mayor Park’s major by-election promise in terms of city finance in 2011. He began pursuing the PB system after he took office.
There is also a budget team in each of the 25 local districts, the members of which include one or two civil servants in charge of the PB system who serve as liaisons to promote cooperation between Seoul City and the local district. In addition, Seoul City operates the Participatory Budgeting Committee, consisting of 250 citizens, and there is a local participatory budgeting committee in each of the 25 local districts.
Seoul City sets aside KRW 50 billion every year for the PB projects, which accounts for as much as 31.7 percent of the KRW 157.1 billion in available public funding, excluding uncontrollable expenditures and mandatory spending, in the citywide budget of KRW 27.5038 trillion (in 2016). Over the last five years, citizens have proposed 10,967 projects, requiring funding of KRW 3.2617 trillion (average of KRW 652.3 billion f 2,193 projects annually), and a total of KRW 240.6 billion has been spent so far for 1,993 PB projects.
It has been Park Won-soon, the mayor of Seoul, who has played the most decisive role in securing financial resources. The PB system was Mayor Park’s major by-election promise in terms of city finance in 2011. He began pursuing the PB system after he took office.
Department / Contact
- International Relations Division, Seoul Metropolitan Government / international@seoul.go.kr
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