Andżelika Mirska, University of Warsaw
Relevance of the Practice
The practice of participatory budget initiated in Porto Alegre is widely known in the world. The democratic discussion and decision-making process was developed primarily in municipalities. In Poland, the participatory budget occurs in cities.  Yet, there is also a similar instrument in rural areas.
The fundamental difference is that the participatory budget for rural areas was introduced by virtue of the Act of 21 February 2014 on the ‘Village fund’, which regulates its functioning in a uniform manner throughout Poland.
The differences between the participatory budgeting procedure and the ‘Village fund’:
First, the participatory budget was created as an informal bottom-up initiative of city residents. Local governments of particular cities decided to conduct it in order to present themselves as friendly to residents and open to their needs. There was no top-down regulation in the form of a central parliamentary act. Each city decided on its own about introducing a participatory budget and the procedure form.
There was a difference with ‘Village fund’ as it was established by a central parliamentary act, which introduced the same procedure for all local governments in Poland. However, the decision concerning the village council fund establishment in a given commune is voluntary – it is passed by the commune council.
Second, the participatory budget in cities is financed only from the local government’s own funds. The different situation occurs in the case of the ‘Village fund’. The part of the financial resources comes from the communes’ budgets, while some funds are transferred from the central (state) budget.
Contrary to the idea that the participatory budget is not regulated from the top-down by a law, the central parliament passed an act in 2018 stating that the creation of a participatory budget is obligatory in cities with county rights. The act also regulates the participatory budget procedure and the minimum amount of funds allocated from the city budget to the participatory budget.
The ‘Village fund’ means the financial resources which can be separated from the budget of the rural communes and the urban-rural communes and guaranteed for the sołectwo (an auxiliary unit of a rural or urban-rural gmina) in order to carry out projects falling within the category of the gmina’s own tasks, aimed at improving living conditions of residents of rural areas. From the point of view of rural residents, it is an instrument of budgetary participation, i.e. co-decision on expenditures of determined parts of public resources included in the municipality budget and aimed at supporting grassroots initiatives of rural residents.
‘The Village fund’ may be interpreted as:
- a democratic discussion and decision-making process by rural community;
- an element of financial management of rural and urban–rural gminas;
- an instrument of direct task accomplishment by rural residents.
Gminas that separate financial resources from their budget in order to establish the ‘Village fund’ receive a financial bonus from the Polish government budget which amounts to 20 per cent, 30 per cent or 40 per cent of the expenditure made by sołectwos. The bonus amount depends on the wealth of gmina. Gminas with the lowest income receive the highest subsidies.
Description of the Practice
The ‘Village fund’ implemented according to the act requires compliance with procedures and time limits. However, the entire process is not complicated.
The establishment of the fund is the right of the gmina council, the resolution on granting the consent to separate the fund applies to the subsequent budgetary years, however, the resolution on not granting the consent to separate it applies only to the budgetary year following the year in which the resolution was adopted.
Therefore, the first step is the ‘Village fund’ establishment decided by the gmina councilin a particular rural or urban-rural gmina. The amount of the resources assigned to the given sołectwo is calculated on the basis of a formula determined in the act where the wealth of the municipality and the number of the village residents are the primary variables.
The second step is the decision of the sołectwo to benefit from the financial resources of the ‘Village fund’. The condition for granting the resources from the fund in the given budgetary year is that a request is submitted by the given sołectwo to the executive body (to the mayor).
For this purpose, the residents of the sołectwo must convene a village meeting at which such a request is adopted, including the description of an objective on which the financial resources from the municipality budget are to be spent (construction of a playground, repairs, construction of pavements, equipping of a voluntary fire brigade etc). As a general rule, the village meeting is convened by the village leader (sołtys)on his/her own initiative, and also on at the request of a certain numbers of residents entitled to attend the meeting (usually about 10 per cent).
The request can be made on the initiative of the village leader, village council or at least 15 adult sołectwo residents. Then the request is put to the vote of the village meeting. Voting procedures are determined by the statutes of each sołectwo.
The gmina council while adopting the municipality budget may refuse the sołectwo request when it considers that the tasks which the sołectwo is planning to implement do not meet the conditions determined in the act.
The following conditions should be met:
- the arrangements fall within the scope of the gmina’s own tasks;
- the arrangements comply with the gmina’s development strategy;
- the arrangements contribute to the improvement of residents living conditions.
If the following conditions are met the gmina council shall adopt the resolution on the inclusion of the financial arrangements from the ‘Village fund’ resources contribute to the gmina’s budget.
The tasks from the ‘Village fund’ resources are implemented as described in the request. The ‘Village fund’ is a part of the gmina’s budget for which implementation the mayor is responsible.
The role of village leader (sołtys) and residents is not limited to adopting and submitting requests. It involves:
- controlling the implementation term and the arrangements quality;
- participation in the arrangements implementation if it was decided during the village meeting. It may be their work or contribution in-kind.
Residents have the right to ask the mayor about the implementation term. This is guaranteed by the Polish Constitution, in Article 61. The mayor must respond within 14 days.
Assessment of the Practice
The aim of the Act on the Village Fund was to ensure opportunities for the village residents to decide independently and jointly their environment and life quality.
The sołectwo may spend – in accordance with their needs – the financial resources but the residents must show initiative and cooperate with each other. The decision is made by the village meeting. It must be held democratically and lawfully. Such a possibility mobilizes leaders or groups of residents who not only initiate concrete actions but persuade others to implement them as well.
The data show large dynamics in the use of this instrument of public participation. In 2009 the number of gminas in which the Village fund was separated amounted to 1178, then, it increased steadily to reach the number of 1596 municipalities in 2018 where the authorities allow the village residents to take over a part of responsibility for the village development. The number of municipalities where the Village fund was established amounted in per cent: in 2009-2013 – 55 per cent, in 2015 – 65 per cent, in 2016 – 68 per cent, in 2017 – 71,3 per cent. In 2018 the number of gminas in Poland is 2478, the number of municipalities with (rural and urban-rural) sołectwo is 2174, and the number of sołectwo – 40 725. The amount of the return of a part of expenditures executed within the framework of the Village fund from the state budget increased steadily, in 2011 the return amounted to approx. PLN 44 million, but in 2018 – PLN 124 million.
It was 10 years ago that this participation instrument of village residents was launched. This may enable the assessment of ‘Village fund’ function and the collection of a catalogue of good practices as well as the indication of possible weaknesses which should be eliminated. Certainly, the ‘Village fund’ will be continued by rural and urban-rural gminas, also because of the financial bonus from the government budget. The second factor will certainly be the desire to maintain the image of a ‘residents-friendly commune’, i.e. one that leaves part of the decisions directly to residents.
References to Scientific and Non‐Scientific Publications
Bednarska-Olejniczak D and Olejniczak J, ‘Participatory Budgeting in Poland in 2013-2018 – Six Years of Experiences and Directions of Changes’ in Nelson Dias (ed), Hope for Democracy – 30 Years of Participatory Budgeting Worldwide (Epopeia Records Oficina 2018)
Jacobsson K and Korolczuk E (eds), Civil Society Revisited: Lessons from Poland (Berghahn Books 2017)
Mirska A, ‘Village fund’ ( Encyclopedia of Public Administration, 2019) <http://encyklopediaap.uw.edu.pl/index.php/Fundusz_so%C5%82ecki/en>
Strzelecki A, ‘The Development of Participation Budget in the Civic Society of Kujawsko-Pomorskie Voivodship’ (2018) 5 Law and Administration in Post-Soviet Europe 52 <https://doi.org/10.2478/lape-2018-0006>
 See report section 6.4. on the Participatory Fund in Cities.
 A sołectwo is an auxiliary unit of the gmina that does not have the status of local government unit and legal personality. The sołectwo has its own elected bodies: village meeting, village leader, village council. The sołectwo are established, transformed and liquidated independently by the gmina. The sołectwo operate in the area of rural gminas and rural-urban gminas. By contrast, in the area of cities, auxiliary units are usually entitled ‘districts’ (dzielnica).
 These issues are regulated in the sołectwo statute. The statute of the sołectwo is adopted by the gmina council. Each gmina defines the text of the statute for all sołectwos that have been established on its territory. Therefore, the content of the statutes of various solectwos may differ from each other.
 1 PLN (Polish zloty) is 0.23 Euro.