Research On Participatory Budgeting, Decentralized Governance And Local Government Accountability

Since the 1990s, it has been a core issue for the governments around the world to strengthen local government accountability by governance. As an innovative model of citizen participation to governance, participatory budgeting experiences rapid worldwide expansion. The logic of its system and institutional performance are paid more and more attention by academia. Most existing studies on participatory budgeting focus on its descriptive analysis of the facts such as conceptual content, evolution features, development prospects and so on. Theoretical and empirical analysis of the results is still limited. This article attempts to introduce a new framework of political economics and takes the participatory budgeting as an accountability mechanism of citizen participation in governance. It focuses on the theoretical logic, mechanism and system performance of the participatory budgeting on improving the accountability of local governments under China’s political centralization and economic decentralized model of governance.In fact, under different political systems, modes of governance and accountability mechanisms of local government are different. In most transition or developing countries, and even developed countries, Local government accountability relies on the political and economic systems factors, which causes general lack of government accountability in governance. It leads to strong institutional demand of accountability mechanism for citizen participation in governance in these countries. The major work of this paper is as follows:using the mainstream economics analytical tools combined with analysis methods of political science and public administration, finding the origin of economic nature and function on the participatory budgeting on the basis of reviewing relative research, revealing the fundamental driving force of the participatory budgeting reform in and abroad, comparing the similarities and differences of typical mode of participatory budgeting in domestic and foreign countries, deducting the inherent mechanism that maintains and promotes domestic participatory budgeting reform by building dynamic game model, testing the effect of participatory budgeting on local government public expenditure structure by empirical models, combined with a typical case of Xinhe Town in Wenling City, the positive effect of the participatory budgeting on the performance of governance are discussed in depth. The major conclusions are as follows:(1) As an innovative approach to decentralized governance, the participatory budgeting is introducing accountable governance mechanism that grass-roots citizen participates in traditional decentralized model of governance. (2) In China, residents generally lack an effective way to express their demands except petitions. Local government accountability mechanism is mainly administrative accountability under vertical control model of governance. The dual increasing pressures of accountability punishment and spending of holding stability promote the inherent power of grass-roots government’s implementation of participatory budgeting reform. Model analysis shows that the participatory budget reform can indeed improve the accountability mechanism of local government to some extent and solve the problem of inadequate livelihood expenditure from the source. It can ease social conflicts and aspiration of the people more effectively and thus help maintain social stability, which benefits both residents and grass-roots government. (3) The implementation of the participatory budgeting significantly increased the spending proportion of education closely related to livelihood, social security and health care on budget expenditure, which reduces the proportion of general public services expenditure on the total financial expenditure budget. Participatory budget helps the openness of budget information and improve budget transparency, which alleviate information asymmetries of local residents and soft budget constraint of the grass-roots government. It strengthens the responsiveness for public spending on the local residents demand, improve the proportion of local public expenditure of the livelihood projects and public service, and thus achieve the goal of continuous improvement in governance performance and strengthen local government accountability.In this paper, perspectives of governance are introduced creatively. Accountable governance mechanisms are brought into the mainstream research of decentralized governance and local government accountability. It clarifies the basic theoretic logic of accountable governance mechanism in local governance, which provides a new research idea of interpretation of accountable governance mechanism in terms of new theoretical framework of political economy. On this basis, simple models of governance transformation are constructed initially. Intrinsic motivation and enforcement mechanisms of accountable governance mechanism reform are analyzed. Through the in-depth research, first-hand field data and regional panel data are collect systematically. The effects of participatory budgeting on improving the role of local public expenditure management are tested by econometric models, which make up for deficiencies and gaps in existing domestic and foreign research.