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Rationale of Participatory Budgeting

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According to the World Bank Research on PB in Kenya, different counties implement a varied models of participatory approaches including Participatory Budget (PB) programs. Overall, more successfully designed and executed participatory processes have positively impacted the outcomes of governance systems and processes. From government accountability to equitable distribution of resources, services, and public goods, PB and other participatory processes in general have demonstrated  a progressive advancement of sustainable development once done in the right circumstances.

John Maritim, the Director of Economic Planning in Elgeyo Marakwet county, notes that there are several factors to explain the increase in Own-Source Revenue including an expanded taxbase. However, following the enactment and operationalization of the Elgeyo Marakwet County Equitable Development Act (EDA) in 2015 which requires citizens to  allocate a portion of the budget to their preferred projects through a participatory process led to an increase in citizen trust in government and subsequently, greater willingness to pay taxes. While there is no empirical evidence to support this argument in Kenyan context,  there is general agreement that the adoption of participatory approaches that empower citizens to make decisions has a fundamental direct or indirect effect in increasing tax revenue in the county.

The case of Elgeyo Marakwet is a classic example of how well structured public engagement positively impacts governance systems and can lead to inclusive governance as supported by experience from Porto Alegre in Brazil. In 1989, Participatory Budgeting was first adopted in Brazil in which citizens were accorded opportunities to allocate a portion of the government budget in efforts to shift priorities to better support the least developed parts of the city e.g. improved infrastructure which citizens direct funds. As a result, citizen participation increased quantitatively and qualitatively while citizens  were empowered to make decisions.  This, eventually , increased the support for the government tax agenda

Locally, at a recent webinar held by OGI on behalf of the Coalition of Participatory Governance (CPG) which brought together leading researchers and governance practitioners and civil societies to share their experiences and lessons learned on PB, there was a general agreement that PB holds a great potential to impact revenue collection and growth when deliberately designed and executed to bring citizens’ voices into the decision-making and provide real opportunities for those voices to shape the outcomes of the decisions made. Several benefits can accrue from the adoption, a well-designed and implemented PB, and public engagement in general. 

First, a well-designed participatory structure enhances inclusion and equity which in turn stimulates a sense of co-ownership of a government development agenda. When citizens deliberate together and build consensus they tend to take more active roles in the implementation of public projects. Moreso, when these projects directly identify with their needs including possible co-financing in some cases through community contributions as well as willful payment of taxes.  

Secondly, when civilian oversight is embedded in the participatory process in which citizens are involved in the monitoring and evaluation of projects implementation, and the government acts more accountable and transparent in the management of these projects, including the process of procurement and award of public contracts as well as payments of such contracts,  there is an increase in public trust that the government is managing their taxes well and are more willing to pay. The perception of corruption and fears of misappropriation of tax revenues is demotivation to pay taxes. 

For instance, in Makueni County the adoption of PB in the planning and budgeting process and also implementation of Open Contracting (OC), the county government was perceived to be more open and transparent. According to a World Bank Report, Makueni County Governor, Kivutha Kibwana reported that the citizens played an oversight role and no money could be incurred from public projects without proper inspection by citizens to ensure payments were only made for completed projects.

Lastly, county governments may consider targeted approaches and strategies to receive relevant and quality input and feedback on the decisions they intend to take. For example, to know whether a land rate charge is reasonable, a participatory approach could be designed to target land rate-payers relative to a general approach in which everyone participated. An assessment done by the Commission on Revenue Allocation (CRA) on revenue administration frameworks in counties show that targeted participatory approaches have been experimented in Tana River, Turkana, Uasin Gishu, and Samburu Counties. There is a need to document how successful these targeted approaches are and how to scale them up and across. 

In conclusion,  there are varied ways to meaningfully involve citizens in decision-making. A well-designed participatory process cultivates shared ownership of the outcomes of the decision-making process between citizens and leaders which in turn enhances public trust, tax morale and reciprocity. 

World Bank Research on PB in Kenya

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According to the World Bank Research on PB in Kenya, different counties implement a varied models of participatory approaches including Participatory Budget (PB) programs. Overall, more successfully designed and executed participatory processes have positively impacted the outcomes of governance systems and processes. From government accountability to equitable distribution of resources, services, and public goods, PB and other participatory processes in general have demonstrated a progressive advancement of sustainable development once done in the right circumstances.

John Maritim, the Director of Economic Planning in Elgeyo Marakwet county, notes that there are several factors to explain the increase in Own-Source Revenue including an expanded taxbase. However, following the enactment and operationalization of the Elgeyo Marakwet County Equitable Development Act (EDA) in 2015 which requires citizens to  allocate a portion of the budget to their preferred projects through a participatory process led to an increase in citizen trust in government and subsequently, greater willingness to pay taxes. While there is no empirical evidence to support this argument in Kenyan context,  there is general agreement that the adoption of participatory approaches that empower citizens to make decisions has a fundamental direct or indirect effect in increasing tax revenue in the county.

The case of Elgeyo Marakwet is a classic example of how well structured public engagement positively impacts governance systems and can lead to inclusive governance as supported by experience from Porto Alegre in Brazil. In 1989, Participatory Budgeting was first adopted in Brazil in which citizens were accorded opportunities to allocate a portion of the government budget in efforts to shift priorities to better support the least developed parts of the city e.g. improved infrastructure which citizens direct funds. As a result, citizen participation increased quantitatively and qualitatively while citizens  were empowered to make decisions.  This, eventually , increased the support for the government tax agenda

Locally, at a recent webinar held by OGI on behalf of the Coalition of Participatory Governance (CPG) which brought together leading researchers and governance practitioners and civil societies to share their experiences and lessons learned on PB, there was a general agreement that PB holds a great potential to impact revenue collection and growth when deliberately designed and executed to bring citizens’ voices into the decision-making and provide real opportunities for those voices to shape the outcomes of the decisions made. Several benefits can accrue from the adoption, a well-designed and implemented PB, and public engagement in general. 

First, a well-designed participatory structure enhances inclusion and equity which in turn stimulates a sense of co-ownership of a government development agenda. When citizens deliberate together and build consensus they tend to take more active roles in the implementation of public projects. Moreso, when these projects directly identify with their needs including possible co-financing in some cases through community contributions as well as willful payment of taxes.  

Secondly, when civilian oversight is embedded in the participatory process in which citizens are involved in the monitoring and evaluation of projects implementation, and the government acts more accountable and transparent in the management of these projects, including the process of procurement and award of public contracts as well as payments of such contracts,  there is an increase in public trust that the government is managing their taxes well and are more willing to pay. The perception of corruption and fears of misappropriation of tax revenues is demotivation to pay taxes. 

For instance, in Makueni County the adoption of PB in the planning and budgeting process and also implementation of Open Contracting (OC), the county government was perceived to be more open and transparent. According to a World Bank Report, Makueni County Governor, Kivutha Kibwana reported that the citizens played an oversight role and no money could be incurred from public projects without proper inspection by citizens to ensure payments were only made for completed projects.

Lastly, county governments may consider targeted approaches and strategies to receive relevant and quality input and feedback on the decisions they intend to take. For example, to know whether a land rate charge is reasonable, a participatory approach could be designed to target land rate-payers relative to a general approach in which everyone participated. An assessment done by the Commission on Revenue Allocation (CRA) on revenue administration frameworks in counties show that targeted participatory approaches have been experimented in Tana River, Turkana, Uasin Gishu, and Samburu Counties. There is a need to document how successful these targeted approaches are and how to scale them up and across. 

In conclusion,  there are varied ways to meaningfully involve citizens in decision-making. A well-designed participatory process cultivates shared ownership of the outcomes of the decision-making process between citizens and leaders which in turn enhances public trust, tax morale and reciprocity. 

Rationale of Participatory Budgeting (PB)

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According to the World Bank  Research on PB, different counties in Kenya have tried and tested PB programs and have positively impacted the community hence progressing towards sustainable development. From government accountability to equitable governance, PB has proven to progressively advance sustainable development once done in the right circumstances.

John Maritim, the Director Economic Planning in Elgeyo Marakwet  county, notes there are several factors to explain the increase in own source revenue including an expanded tax-base. However, following the enactment and operationalization of the Elgeyo Marakwet County Equitable Development Act (EDA) in 2015 which required that citizens allocate a portion of the budget to their preferred projects through participatory process,  citizens ownership of the participatory process and the resulting projects led to an increase in citizen  trust in government and subsequently, greater willingness to pay  taxes and generally, support the government development agenda.  While there is no empirical evidence to support this argument,  the adoption of participatory approaches that empower citizens to make decisions has a fundamental direct or indirect effect in increasing tax revenue in the county. 

The case  of Elgeyo Marakwet is one of classic examples of how Participatory Budgeting and other participatory institutions positively impact governance systems, society and can lead to inclusive governance. A case of Porto Alegre in Brazil supports this conclusion. In 1989, Participatory Budgeting was first adopted in Brazil in which citizens were accorded opportunities to allocate a portion of the government budget in efforts to shift priorities to better support the least developed parts of the city e.g. improved infrastructure. As a result of citizens directly allocating a portion of the budget, the process increased citizen participation and empowered them to make decisions increased the support for government tax agenda

Locally, at a recent webinar held by the Coalition of Participatory Governance which brought together lead researchers and governance practitioners and civil society to share their experiences and lessons learnt on PB , there was a general agreement hat PB holds a great  potential to impact revenue when deliberately designed and executed to bring citizens into the decision-making. Several benefits can accrue from the adoption, a well designed and implemented PB and public engagement in general. 

First, a well-designed participatory structure enhances inclusion and equity which in turn stimulates a sense of co-ownership of a government development agenda.  When citizens deliberate together and build consensus and subsequently, tend to take more active roles in the implementation of public projects especially when these projects directly identify with their needs including possible co-financing in some cases through community contributions as well as willful payment of taxes.  

Secondly, when civil oversight is embedded in the participatory process in which citizens are involved in  monitoring and evaluation of project implementation the government acts more accountable and transparent in the management of these projects including procurement and award of contracts as well as payments of such contracts. Hence,there is an increase in trust that the government is managing their taxes well and are more willing to pay. The perception of corruption and fears of misappropriation of tax revenues is demotivation to pay taxes. 

 For instance,in Makueni County where Participatory Budgeting was adopted, citizens were part and parcel of the budgeting process and this led to government transparency on  public projects implementation. According to the theWorld Bank Report, Makueni County Governor, Kivutha Kibwana reported that the citizens played an oversight role and no money could be released  without proper inspection by citizens on the completed projects  and whether the same projects had been properly implemented.

In addition,when citizens are involved in the budget process planning , they get to understand the roles and responsibilities of different arms of the government. When citizens are involved in the decision-making process of participatory budgeting, they become more empowered to know the roles of different arms of the government in development.Nonetheless, it helps citizens understand the limitations of government for example,an MCA oversight and failure to supply water to their localities.

In conclusion,  the Participatory Budgeting process ensures all the marginalized groups in the society are included and have a voice in the decision making process of public budget expenditure. Therefore , adaptation of PB in all counties is paramount to ensure a just and equitable governance.

Written by Jane Mumo

Communications Specialist

How do Participatory Institutions Impact Revenue Collection at the County Level?

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As Kenya’s devolved system of government approaches the 10 years mark, the creation of opportunities for further self-governance in which governments and citizens can deliberate together to plan, budget, and address gaps in service delivery represents a great milestone. However, resource constraints remain a big and common challenge and a limitation for the devolved units to meet their constitutional obligations to the Kenyan citizens.

Kenya’s counties rely heavily on national transfers (equitable share) to finance their budgets alongside County Own-Source Revenue (OSR) which comprises fees, charges, rates, and other taxes assigned to county governments. Although the national transfer represents the largest share of county revenue and is a somewhat predictable and reliable source of financing, county governments have no control over the transfer timelines and frequency. In some cases, counties have gone for months without receiving their national transfer shares while the amount available through OSR makes a small portion of the revenue pot, thus raising concerns on the ability of county governments to sustain their operations.

Albeit representing a small portion of the financing pot the growth of Own-Source Revenue (OSR) represents the most viable and feasible opportunity for the devolved units to achieve self-reliance. County governments are directly responsible for its management including collection, policy, and legal frameworks. According to the COB, over the last three fiscal years through 2018/19, counties’ collections averaged 68% of the annual revenue target. Challenges in managing this function include low compliance by tax-payers which lead to costly enforcement of revenue laws and regulations and the application of complex collection mechanisms in some counties.   

In this webinar, we brought together key stakeholders to explore ways in which county governments can enhance the management of OSR through efficient and effective governance systems and processes, with a focus on the role of Participatory Institutions. A panel of lead researchers and governance practitioners reflected and shared lessons to establish ways in which the existence of Participatory Institutions and ideals of governance systems such as public accountability and transparency impact collection and general management of local revenue (OSR). 

Notes from panelist 

  • Participatory Budgeting (PB) is an example of a participatory institution that has been tested and adopted across the World. PB is a rapidly growing program that can be customized to produce desired development outcomes. The adoption and application of PB in Brazil present a classic example of its effect on local governance. PB draws its power and effectiveness from the fact that the process involves the public in allocating real money; thus, the process leads to real outputs that are also binding on the government. 
  • When complemented with governance ideals such as government transparency and accountability in the management of taxes and other public resources, and properly designed, Participatory Budgeting has the potential to improve the credibility of government and build trust which then leads to long-term and sustainable improvement in tax compliance, low-cost enforcement of tax laws and policies, and overall cost-effectiveness in the collection and administration of tax revenues. 
  • To enhance the credibility of government and build trust, participatory budgeting and other participatory mechanism result in citizen’s sense of ownership of the projects identified and allocated resources to address common and immediate needs, creates platforms for deliberation and collective decision-making while the government is more obligated to accountability and transparently deliver on the commitments made through participatory processes. More so, through transparency and accountability of taxes revenues,  governments persuade citizens by demonstrating the value of taxes through the publishing of budget information including quarterly reports that show revenue collection performance and status of programs and project implementation. According to County Budget Transparency Surveys (CBTS), only five (5) counties consistently published quarterly implementation reports.

Relevant lessons from county governments

Governance practitioners in Kenya argue that there is limited empirical data to link participatory institutions and ideals of governance such as transparency and accountability to tax revenues in Kenya, however, some county governments have experienced incremental changes in revenue, although marginal. 

In Elgeyo Marakwet County, the revenue registered an annual revenue growth of 10% since the enactment of the county’s Equitable Development Act (EDA) 2015  – a law that empowers citizens in each ward to directly allocate an average of KES 35 million (or USD 350,000) annually. Mr. Maritim suggests that the county may not authoritatively attribute the revenue growth to public participation and the ability of citizens to allocate a portion of the budget; however, he notes that the level of taxpayer compliance to tax revenue laws has equally improved and may not be a coincidence. To demonstrate the direct correlation between factors that affect taxpayer willingness and accountability of government on the actions it takes,  delayed construction of a market and Boda Boda (motorbike) shades in West Pokot County. resulted in the users of the respective shades refusing to pay respective fees and charges in protest. This is a common experience across most counties in Kenya including extreme cases in Kiambu and other counties where taxpayers consider litigations as alternative measure mechanisms for corrective action. 

Annette Omollo, World Bank Kenya sharing her experience on how PB has impacted development in different counties. John Kinuthia, from IBP Kenya discusing on how trust and transparency can persuade taxpayers

Obervations and reflections from Participants 

  • There is a need to expand the scope of conversation both vertically and horizontally going forward. Horizontally, the discussion should consider exploring examples of relevant case studies from across a representative number of counties in Kenya and also international experiences from a wide variety of contexts to provide an expanded list of applicable lessons and practices. 
  • Meaningful participation is a resultant effect of an informed citizenry, thus, there is a need to incorporate knowledge and capacity development in the participatory processes. The outputs of participatory institutions should include civic education to citizens on various governance practices, roles of various government institutions as well as citizens’  rights and responsibilities and how they are to play these roles. Limited access to information, including budget data and information, budget financing mechanisms, and the expected outcomes represents a major challenge to the informed participation of citizens and eventually impedes taxpayer reciprocity.
  • The link between various parts of the PFM system is inadequate to stimulate a structured debate on how to grow local revenue through stronger participatory institutions, especially on how these taxes are used and accounted for. For example, to demonstrate the value of a new market or market structure and understand and appreciate the return in value from the payment of fees and charges, tax-payers must be proactively engaged in setting the fees, charges, and rates and subsequently made to share the vision and objectives of tax revenue-raising measures. 
  • An assessment done by the Commission on Revenue Allocation (CRA) on revenue administration frameworks in Tana River, Turkana, Uasin Gishu, and Samburu supports the value of deliberate efforts to engage taxpayers in setting revenue targets. According to the Commission, these county governments implement targeted public participation approaches in which specific taxpayers e.g. ratepayers are convened to deliberate on land and property rates. 

Conclusion and recommendations

In conclusion, submissions of the panelists support the argument that citizens are willing to pay taxes when they know they have power over allocations and are guaranteed that the government will keep its commitment to utilize the taxes transparently and accountably. 

The adoption of Participatory Budgeting (PB) is possible in the Kenyan context, however, a clear and shared purpose and vision for the adoption must be established. Whereas PB has proven to be a successful approach to participation, the counties that have attempted to adopt it have either stagnated or abandoned its implementation, thus, the need for institutionalization of the participation. Partially, this is because of limited knowledge and understanding of its effect on other parts of governance systems beyond citizen empowerment, transparency, and accountability. Another way to increase the adoption and institutionalization of PB and other effective participatory institutions is to entrench it in the political agenda of political leaders to leverage on political structures and ambitions in deepening the practice.

“Increase trust and tax morale increase reciprocity” Michael Touchton

Resources:

To listen to the zoom meeting click on this link https://drive.google.com/file/d/1TDmp_yC1Qh7lj8Oj-5LGKnsdRYJWMp_C/view?usp=sharing

OGI Kenya submission: The Division of Revenue Bill (N/A Bill No. 3 of 2020)

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In response to a recent invitation for submissions to the subject, OGI Kenya submitted comments and input. The DoRB 2020 proposes to maintain county revenue share of nationally raised revenue at a similar share to 2019/2020 of Ksh. 316.5 billion. In this submission, OGI Kenya’s Director argues among other factors, contradictory and inadequacies in the justifications given for freezing the share for devolved units in the coming financial year, 2020/2021. Read more about the submission

The Journey from Plan to Budget_Role of Program-Based Budgeting (PBB)

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This brief reviews Elgeyo Marakwet County Annual Development Plan (ADP) 2020/21. It looks at the process from which the document was developed and assess decisions taken by both arms of government regarding the content.

Traditionally, the county has adopted a blank-slate approach in getting communities to input into the budget decision making that generated a list of projects in August every year, two months after approval of another budget in June. In other words, citizens were being asked to identify projects for the coming year even before the implementation of the present financial year’s projects commenced. This approach also meant that budget programs, targets and performance indicators were designed on the basis of projects selected as opposed to such processes responding to broader policy goals.

In an attempt to streamline the budget processes, the executive submitted a program-based budget format ADP 2020/21 – with no projects this time. Assembly rejected the document on that basis that it did not contain projects. In summary, three things stand out from the review.

  1. Executive’s shift to begin the budget processes with program design, target and indicator setting presents a remarkable turning point resulting out of experience. Identification of projects is a budgeting stage function in the budget cycle that preceding the setting of program targets and indicators, thus, inverts the planning and budgeting processes to begin with budgeting. Ideally, good planning processes identify broad development and service delivery goals, set targets to be achieved over the year and identifying indicators to measure progress then follow the identification of suitable projects and interventions to achieve the set targets.
  2. Apparent misconceived definition of development in Kenya to imply capital projects by most leaders and citizens weaken the value of Program-Based Budgeting (PBB) and negatively affects the county’s planning and budgeting. In order to develop and deliver services sustainably, the county planning and budgeting must follow from a well-designed process.
  3. Inadequate or lack of shared understanding of the value of good planning and budgeting processes between assembly, executive and communities. Even as the executive attempted to shift and streamline the budgeting processes, there is very little evidence that both arms of government understand the shift, particularly the application of Program-Based Budgeting (PBB) approach and/or that executive has sufficiently caused the assembly and other stakeholders to understand its shift in approach. Read more>>>

 

 

 

 

Policy Brief Inequality thrive where policies fail

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In summary, this brief presents a review of job creation policy intervention in Kenya. It reviews policies formulated and implemented by the government of Kenya to address unemployment over the past half a century since 1963, with a focus on the assessment of efficiency and effectiveness of adopted interventions to create new, quality and sustainable jobs to meet highly growing and skilled young labor force.

Over the past half a century, the government of Kenya adopted several policies segmented into three typologies according to Omollo (2012). These were: a) Kenyanization and tripartite agreements (1963-1979); b) active labor market policies (1980-1989) and; c) macroeconomic management (1990-2011). In the post-2011 period, the government shifted focus to the creation of jobs through public works programs such as Kazi Kwa Vijana (KKV – jobs for youth), National Youth Service (NYS) as well as most recent efforts to strengthen the informal sector through structural, legal and legislative reforms towards ease of doing business.

Reorganization, replacement of non-locals in the job market and enhanced linkages between supply and demand sides of the labor market are notable achievements during this period, with insignificant effects on the creation of new, quality and sustainable jobs. Most jobs created were low paying and temporary labor-based employment.

Corruption, policy inefficiencies and inadequate civic engagement of beneficiaries in the formulation, execution and, evaluation of policy interventions are fundamental factors that undermine job creation.  Also noted is a weak learning framework as well as limited involvement of young people. As a result of notable inadequacies of these policies, young people, especially those in rural areas, low-income families and minority communities remain highly marginalized in the job market especially in regards to access to formal and quality jobs.

There is a critical need to better align policy and budgetary interventions to the needs of the target beneficiaries. This requires that the process in which budget and policy priorities are designed must be open, transparent and sufficiently participatory to accommodate the voices of young people. Interventions must also be regularly evaluated to assess the impact and learnings from implementation. Read more >>>

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Submission to Senate | 3rd Generation Revenue Sharing Formula

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The Commission of Revenue Allocation (CRA) has finalized and submitted the proposed third (3rd) generation formula to Senate for consideration. As required by the constitution, the Senate has invited public input and comments in its ongoing public consultations on the formula. We made a submission attached here.

Our review indicates that the proposed third-generation formula is comparatively aligned to functions compared to its predecessors – first and second basis. The commission has made great steps towards a greater objective, rational and transparent resource sharing criterion in efforts to ensure local governments are commensurately resourced to deliver on their respective mandates, but also held accountable for its obligations.

As the Senate consider approving the recommendations, we take this opportunity to share our observations, comments and input for consideration. The comments, reviews and input in this document applies to selective parts of the formula and builds from similar submission we made earlier to the commission. Read a simplified version of the formula here while you can access the complete formula here

Why youth-friendliness of healthcare delivery systems could enhance fight against cancer in Kenya

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Over the past few years, Kenyans have engaged in an emotional debate over whether cancer should be pronounced a national disaster. Rarely this debate is structured enough to deliberate on the root causes of cancer and explore innovative ways to save Kenyans and the World from losses of loved ones and leaders at prime age of leadership. Cancer and other chronic diseases are normally diagnosed at middle age, yet, the debate rarely consider young people as a stakeholder in efforts to trace the menace to its root causes.

70% of non-communicable diseases (NCDs) are linked to habits, or risk behaviors that start at adolescence and go on throughout adult life. Perceived stigma, judgement and lack of privacy in healthcare delivery systems prevent access to healthcare, thus, young people find alternatives in the practice risk behaviors e.g. drug abuse, unsafe sex etc.

Youth-friendliness of healthcare delivery systems has been discussed and recognized globally as one way to address unique needs of young people, yet, policies, economic planning and budgetary programs do not reflect efforts to unpack what friendly healthcare system constitute in Kenya. Even with budgetary programs on SRH and efforts such as Universal Health Care (UHC), access is not guaranteed without addressing negative perceptions and lack of trust in the delivery systems.

In this paper, we discuss current state of access to Sexual and Reproductive Health (SRH) by young people in Kenya – reflections on findings from a survey we conducted in July 2019 to collect ideas and experiences of young in regards to access to SRH. Young people rated public health facilities as the least friendly for the access of SRH.

Finally, in effort to win the trust of young people in healthcare delivery systems and broadly, make efforts to free the middle age population in the near future, from the agony of cancer and chronic diseases, we discuss and recommend participatory co-design of an ideal youth friendly healthcare delivery system. On this, we call upon health policy practitioners, advocates of young people’s issues as well as young people in their organizations and individuals to take action.

In summary, we argue that Kenya’s healthcare delivery system is in violation of young people’s social and economic rights – whether by design or otherwise. Even though social and economic rights are guaranteed and anchored in Kenya’s supreme laws and policies, intended and unintended actions of government and facility management have perpetuated inequalities and discrimination against young people. Access full paper here

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