Paper short abstract:

Does the participation of citizens matter in steering public expenditures towards human development? This study on public participation in local government processes in the Philippines provides quantitative evidence that bolsters the advocacy for open governance. The relationship between participation and budget outcomes, however, is not always straightforward and clear.

Paper long abstract:

Advocates assert that opening government processes to the participation of citizens improves governance and service delivery, and ultimately help bring forth greater prosperity for all. One could even argue that the ability to participate in the affairs of one's government--particularly in the allocation of scarce public resources--is an essential element to the achievement of human development.

While qualitative evidence are abundant on the exemplars of participatory governance and the results they brought to citizens, the quantitative literature is inconclusive at best, and at worst proves the lack of a causal relationship between participation and desired governance and development outcomes. This study--submitted by the author as his thesis for his Master of Development Economics--contributes to the body of empirical evidence showing that participatory governance has generally positive, though mixed, effects on public financial management. In particular, this study investigates the effects of the participation of civil society organizations (CSOs) in local government units’ (LGUs) development councils, which is mandated by the Local Government Code in the Philippines.

Using panel regression, the study finds that CSO participation—particularly its more substantial forms like submission of action plans to follow through on council discussions and provision of technical support to the council—has a positive effect on increasing expenditures in the aggregate and on key sectors that promote development: education, healthcare, social services, and infrastructure. However, CSO participation is also associated with constrained fiscal resources, particularly LGU dependence on national transfers. Moreover, the effects of CSO participation on local budget outcomes are not always straightforward: these are significantly dependent on context and some effects may likely be nonlinear.

Though this study does not claim to establish causality, it nevertheless affirms the policy direction to broaden and deepen participatory governance. Nevertheless, reforms are needed to produce more substantive metrics of CSO and citizen participation, to understand and improve the enabling environment for participation, and to invest in studies that establish the elusive impacts of participatory governance especially on human development.