PEMPAL 2019 Annual BCOP Plenary Meeting Tashkent, Uzbekistan, March 21, 2019 Key Outcomes and Avenues for Development of Participatory (Initiative) Budgeting in Russia Anna Belenchuk head, budget SYSTEM analysis and development unit, Ministry of Finance, Russian Federation

Current results of participatory budgeting development*  Indicator 2015 2016 2017 2018 1. Number of regions engaged in Participatory Budgeting practices, units 7 16 47 52 2. Regional subsidies for implementation of PB programs, bln rubles 1.4 5.1 7.7 n/a 3. Federal budget expenditures, bln rubles** - 38 4. Community and business co-financing, bln rubles 0.4 0.7 1.1 5. Total cost of projects, bln rubles 2.4 7.0 14.5 6. Number of projects implemented, units 2 657 8 732 15 942 * Data are based on a review of official responses by regional executive governments to a MOF request concerning PB practices in the respective period. ** - includes funding for priority project of the Ministry of Construction and HSU Shaping a Livable Urban Environment and Federal Targeted Program of Russia’s Ministry of Agriculture Sustainable Development of Rural Areas in 2014–2017 and to 2020.

Classification of Citizen Engagement Practices in Russia Criterion 1. World Bank’s LISP 2. People’s Initiative, People’s Budget 3. EUSPb Participatory Budgeting (EUSPb PB) 4. Youth Budget 5. Community-led areas development program (PORT) Launch 2007 2011 2013 2017 2018 Key characteristics 1. Citizens select projects at community meetings 2. Projects are competitively selected based on formalized criteria 3. Integration into national administrative, budget and legal systems 4. Projects are financed from regional budgets with mandatory cofinancing from local communities, businesses and municipalities. Regional variations of PB practices, presenting a synthesis of various PB approaches Allocation of earmarked municipal funds or borrowed funds based on decisions of a commission comprising randomly selected members from among project applicants and municipal representatives. The commission may propose initiatives concerning various areas of urban life. Provision of funds from the regional budget (3 mln rubles) on an annual basis, for allocation with the participation of high school seniors. 1. Type of projects: construction and rehabilitation of social infrastructure facilities in urban okrugs 2. Each community meeting selects 1 project and 3 delegates. 3. A congress of delegates selects 2 projects from each okrug. 4. Voting through the public services website Regional coverage Kirov, Tver, Nizhniy Novgorod oblasts, Stavropol, Khabarovsk krai, Republic of Bashkortostan, Northern Ossetia, Jewish autonomous oblast, and other regions Tula, Irkutsk and Tambov oblasts 13 towns and urban settlements in Leningrad, Vologda, and Kirov oblasts; in 2016 a PB project was launched in St. Petersburg Sakhalin oblast

Participatory (initiative) budgeting in Russia: Key stages 2015 2016 2017 2018 An IB Center was established within MOF’s Financial Research Institute World Bank’s Project to Promote Participatory Budgeting in the Russian Federation was launched A medium-term PB development program in the Russian Federation was drafted PB was incorporated in main strategic government documents

Key Areas of Activities of the Government of Russia until 2024 Included objectives: 5.3 Development of constituent regions and municipalities - Introduce and provide training in engagement mechanisms enabling citizens to participate in addressing issues of social and economic development of territories based on the participatory (initiative) budgeting concept, making sure that the share of regions that have approved PB programs (activities) within their government programs increases to 50% 6.2 Effectiveness of public spending, including procurement for state and municipal needs - Ensure openness of the budgetary planning process and involve civil society institutions in the process 6.8 Engaging citizens in state and municipal governance Expand citizen engagement in developing proposals, discussing and making managerial decisions Introduce participatory (initiative) budgeting mechanisms Expand public oversight practices

Concept for Improving the Efficiency of Budget Spending during 2019-2024 Included objectives: Improve a system of public discussions of draft laws and regulations concerning citizens’ interests, present draft laws and regulations that are of most social significance in an accessible format. Make sure that the published information on results of government activities, including public financial management, is understandable.   Enhance a system of public hearings for draft budgets and budget execution reports and improve mechanisms for review and consideration of citizens’ suggestions put forward during such hearings. Define a legal framework for PB and grant the authority for regional governments and local self- government bodies to establish particular aspects of PB implementation. Incorporate PB in possible implementation arrangements for various activities, including those aimed at enhancing urban environments. Develop methodological recommendations on PB project development and implementation for regional governments, local self-government bodies, and citizens. Summarize and disseminate best regional (municipal) practices of implementing PB projects. Make sure that citizens have free access to learning and information materials on PB practices. Disseminate budget knowledge and instruments enabling participation in public financial management and public oversight among various population groups. Improve presentation formats of citizens’ budgets.

Government Program Public Finance Management and Financial Market Regulation As adopted by Government Resolution № 340 dated March 29, 2018 Key activity 3.4. Implementation of the PB Development Program in the Russian Federation Actions: - Put in place a regulatory framework governing PB practices in the Russian Federation; - Build an institutional infrastructure to develop PB at the regional and municipal levels; - Accompany, regulate, and provide information support to the process of PB development; - Monitor and evaluate PB programs and practices. Expected outcomes: - Better public awareness about opportunities to participate in identifying and selecting areas for budgetary spending and in subsequent oversight over implementation of selected projects. - Higher demand for information on formulation and execution of budgets in the Russian Federation. Indicator 3.5 – share of Russian regions (%) that have approved PB programs (action plans) as part of their regional government programs

MOF’s Citizens’ Budget Project: Areas Review international standards on budget management openness, design and implement individual instruments based on best international practices. Design a methodology and monitor budget data openness at the regional level in Russia. Enhance mechanisms for engaging citizens in the budget process at the local level based on participatory (initiative) budgeting practice that is wide-spread globally. Design activities to improve citizens’ budget literacy. Organize contests of ideas among the public on how to present Citizens’ Budgets. Prepare and publish annual MoF reports on best regional and municipal practices for various project parts (Citizens’ Budget, initiative budgeting, etc.).

Best PB Practices in Russian regions in 2018 Criterion Region 1. Share of regional budget allocated to PB projects Yaroslavl Oblast 2. Share of PB project beneficiaries Kirov Oblast 3. Comprehensive approach to PB Republic of Bashkortostan 4. Citizen engagement in meetings to propose PB projects Republic of Sakha (Yakutia) 5. Enhancing budget literacy of PB participants St. Petersburg 6. Extent of citizen engagement in decision-making Tula Oblast 7. PB support infrastructure Krasnoyarsk Krai 8. PB awareness-raising campaign Stavropol Krai 9. Visual presentation of a PB program Altai Krai 10. Implementation of income-generating PB projects Republic of Komi 11. Setting up PB in a single municipality Sosnovi Bor (Leningrad Oblast) Source: MOF Report on best PB practices in Russian regions and municipalities

Best Practice of Financing PB Projects from the Regional Budget Let’s Decide Together! Project Yaroslavl Oblast RUR443.8 million (1.04% of total regional expenditures) allocated to finance PB projects Implemented as a priority Governor’s project A portion of funds used from a priority project Shaping a Livable Urban Environment supervised by the Ministry of Construction of Russia An integrated project office has been created at the Yaroslavl Oblast Council of Municipalities Information support in mass media and on municipal websites. A web portal has been designed for the project www.vmeste76.ru

Best Practice by the Number of PB Project Beneficiaries Local Initiatives Support Project Kirov Oblast Share of PB beneficiaries is 65.4% of total population. Social focus of PB projects. Identifying social target groups of beneficiaries of PB projects. Various types of tenders for different projects, with different project selection processes, procedures and cofinancing terms. PB projects addressing local community needs are treated as investment programs. Projects are evaluated on the basis of objective (calculated) and subjective criteria, with consideration for financial, statistical and social conditions in municipalities.

A Comprehensive Approach to PB Development Participatory Budgeting in the Republic of Bashkortostan Strategic indicators (from the Republic of Bashkortostan Social and Economic Development Strategy): It is planned that by 2030 10% of Bashkortostan residents will be engaged in participatory budgeting projects. It is expected that by 2030 10% of the consolidated budget will be spent through PB mechanisms. New PB mechanisms (practices) implemented in Bashkortostan: PB mechanisms (practices) used in the Republic of Bashkortostan: LISP “Real Actions” “Ufa (Bashkir) Backyards” “Our Village” Income-generating projects 2019: Engaging non-profit organizations in PB; TV shows 2021: Implementing PB projects through the Web 2020 : Purchasing of communal equipment Engaging school students in PB

Local Initiatives Support Program (LISP) Republic of Sakha (Yakutia) Best Practice of Citizens’ Participation in Community Meetings to Propose PB Projects Local Initiatives Support Program (LISP) Republic of Sakha (Yakutia) Share of municipal residents who took part in meetings: - Preliminary meetings – 28.2%; - final meetings – 14.1%. Effective tool for engaging citizens through the media, social networks, and messengers. Identifying relevant and urgent issues during preliminary reviews of projects. Recording decisions adopted by residents and the number of participants attending final meetings by taking minutes, photos and videos of the meetings held. High level of citizen co-financing of PB projects (7.4% of total project cots).

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