Paticipatory Budgeting
Today’s budget day played out an old ritual. One man with a red bag of office will reveal what he has decided the nation will spend and how it will raise taxes to finance this.
This is the way it is done, and this is the way it seems always to have been done, ‘democratic politics’ is played out around his decisions. The Labour Party will go into the election on the basis of these decisions and the Tories will oppose them, offering some half revealed alternative package deal.
The voters will, for once, have a yes no decision to make on the package in a couple of months. But what if you agree with some of the buget and not other parts, what if you agree with the level of education expenditure but not the level of naval procurement. What if you would prefer the top rate of tax to be 55% not 50%.
Tough!
Its take it or leave it.
There has to be a better way. If phone voting can be used to decide trivial issues like who should leave Big Brother, why can the public not have a say on the important issues that affect them.
It would be quite possible to put up a website with say half a dozen key questions
Should the top rate of tax go up 5%, down 5% or stay the same.
Should VAT go up by 2%, down, 2% or stay the same.
Should health expenditure go up 5%, down 5%, or stay the same.
Provided that the government had previously decided on the overall level of borrowing it is quite simple to count the votes and decide on a consensus level of taxes and expentitures. I show this in the talk I will be giving to the BCS conference next month.
If such a democratic budgeting system were introduced, and if there were provision for citizens initiatives on what questions were to be included in the vote, politics would change. Campaigns would arise focused around specific changes to the tax system that benefited different social classes.
These are questions that directly affect peoples pockets, and would provide a motivation for greater democratic engagement.
In Germany the new Die Linke programme drawn up by Lafontaine commits to this sort of budgeting.
There would of course have to be all sorts of provisions to protect against fraud, but we know how to make mobile phone voting secure, anonymous and verifiable. The Handivote system is one example.
Not a comment for Paul: This is a snippet from work I’ve written elsewhere:
– The expansion of local autonomy for equally local development through participatory budgeting and oversight by local assemblies, as well as through unconditional economic assistance (both technical and financial) for localities seeking to establish local currency alternatives to government money
– Socio-income democracy through direct proposals and rejections, at the national level and above, regarding all formal and effective tax rates on all types of income – such as ordinary employment income, self-employment and managerial income, individual property income such as interest, both individual and corporate business income, both individual and corporate dividend income, and both individual and corporate capital gains – annual plebiscites with the ability to create or raise upper tax rates on a steeply graduated basis, including changes to alternative minimum tax rates, transfer pricing tax rates, and gross-ups or multipliers for income outside of ordinary employment
I can see the virtue of some of this, but the creation of local currencies is only something that makes sense in the context of communes which are both economic and political entities as the rural ones in China were. Then the local time credits issued can entitle the recipient to a share in the communal product. If there is no communal product, only communal services, local time credits only make sense if the services have to be paid for.
Hi Paul,
They have a variant of this in some American states, and it doesn’t seem to work very well, e.g. the well documented problems in California.
One point about participatory budgeting is that it works best when it is deliberative, when people come together to discuss different ideas and then make their minds up, rather than just individuals voting in referenda or suchlike.
I think that for this kind of democracy to become widespread there would need to be a variety of forums set up for such debate. There could obviously be a parliamentary debate, but also debates on TV with politicians and members of the public, and also web forums.
We need to exercise ingenuity in how such deliberative processes can be enhanced.
Isn’t there a slight danger of taxes going dramatically down and expenditure dramatically up?
You are right unless one builds in a prior constraint on the agreed level of public borrowing.
If you have that, then it is feasible to chose the compromise position which both achieves that level of public borrowing and maximises the achievement of voter preferences. The talk I gave a link to for the British Computer Society conference gives the maths.
I don’t think it would work, and I don’t think a phone poll is particularly democratic. I’m all for more participatory stuff, but it needs to be deliberative, localised and with rights to paid time off from work etc which are rigorously enforced. Then meetings need to be run in such a way that the people who are more educated or more confident don’t dominate them.
My worry would partly be that participation would be lower than at a general election when representatives are elected, and that the people who don’t participate are more likely to be people who are working class and people who are on lower incomes.
Why is a phone poll less democratic than a poll at a polling station?
The problem with the sort of face to face deliberation that you are talking about is that it is only applicable to small groups. That means either it is applied to local issues only, or you have to give up on participative democracy and opt for representative democracy.
I would be open to the argument that an alternative democratic way to organise the budget would be to select 100 people at random from the population and have them deliberate over it for a few days and then vote, but I feel that there are some issues which are of sufficient importance that the public as a whole should have a say.
The level of turnout to vote on these issues would depend on political activity. It would mean that if Labour for example wanted to win a vote on the budget, it would have to mobilise its political constituency rather than its MP’s. This would entail a much more activist form of politics.
Paul, I guess this next comment has to do with deliberation. Someone asked this on RevLeft:
http://www.revleft.com/vb/direct-democracy-and-t128876/index.html?p=1668811&highlight=policy
“How do we get a better handle on how much policy making will be required in a direct democracy?”
Me: Actually, comrade, I was thinking about that myself and almost started my own thread. As you know, Marx wrote about the Paris Commune’s organs combining legislative and executive-administrative power, but nowhere in the Marxist tradition is there any significant commentary on policy-making, which is still quite different from legislation: a “policy” or part of it becomes a “bill(s)” which becomes “law(s).”
To which he said, “Your ‘latest blog entry’ contains the framework for legislative/executive aspects. As I understand it, policy is more general in scope and supposedly requires the widest possible input. But how much would reasonably be needed? Politicians like to pretend they are busy. Legislation does get passed and laws become byzantine, but policy change is mostly talk.”
“Edit: In a recent thread with Paul, the concept of council or ‘group wisdom’ was brought up. ie. that a panel of non-experts can analyze and provide advice comparable to that of a single expert.”
I’d question the philosophical basis of these. How should the ubiquitous Clapham omnibus person know whether the percentage of the budget going towards policing should be 9%, 11% or 13%? And if they decide to lower the police budget, who is to say whether the decrease will be in the number of tasers or the amount of rape counselling? It also politicises government departments unnecessarily because, say, the head of the FSA may need to appear in adverts or editorials to justify his department’s existence. That’s not a bad thing in general, perhaps, but I’m living in Turkey at the moment where a politicised military regularly tells the democratically elected government about its displeasure with internal policy in the form of thinly veiled threats. If generals become celebrities with their own voices in public policy, a real problem with military interference could arise. And we all know which side The Sun would be cheering for.
I did not propose that people set the total budget for each heading of government expenditure, but vote on whether to raise or lower each heading by a few percent.
The existing structure of expenditure thus provides the starting point, I think people generally do have an order of preference between different headings like health, education, transport and defence.
There could be legislation prohibiting serving officers or civil servants from publicly lobbying on these topics if that is thought to be a problem, but remember that if any group was allowed to lobby, they all would. On the one side you would have the Admirals and Generals, and on the other the Nursing unions and BMA.
1) A very low percentage of the electorate will understand your maths. The system will be as transparent as mud, e.g. in the very possible situation where people vote for mass lower taxes and mass higher spending.
2) Assuming people do have ordered preferences do we think those preferences are based on any degree of knowledge or study? Aren’t they more likely to be based on prejudice, a couple of scattered experiences, or whatever the Sun has been banging on about recently?
Well I agree that a very low percentage of the electorate will understand the maths of the general case but the basic principle can be explained very simply.
Suppose that overall people vote for a 4% increase in expenditure and only a 2% increase in taxes.
In that case the maths resolves to the compromise position of a 3% increase in both expenditure and taxes.
In general if voted increases in taxes and expenditure do match, the maths means that you split the difference. That is readily understandable.
Your final point about the people being ill informed is the same basic argument against democracy that conservatives have been advancing since Plato. To which the democrats replied that man was a a zoo-politikon and that all had the capacity to exercise political judgment on the questions that affect them.
To British inheritors of a couple of centuries of aristocratic tradition, trust in the people seems alien.
I’ll concede the maths point.
On the second point, there must surely be concerns that citizens voting on the basis of a very little data are less likely to allocate resources efficiently than politicians advised by legions of civil servants and with access to lots of data. In making this argument I am by no means blind to the failings of politicians, nor am I suggesting that the man on the street isn’t capable of rational reflection. It is simply a point about access to data and technical expertise.
Paul, I think you made an affirmative remark somewhere about consumer markets allowing consumers to “vote with their dollars.” However, participatory budgeting makes a huge dent in this popular but ultimately absurd argument.