Governance and Performance in Public and Non-Profit

Organizations
Popular Reporting and Public Governance: The Case of “Bilancio in Arancio” in Milan
Municipality
Carmela Barbera, Elio Borgonovi, Ileana Steccolini,
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 POPULAR REPORTING AND
PUBLIC GOVERNANCE: THE CASE
OF “BILANCIO IN ARANCIO” IN
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MILAN MUNICIPALITY

Carmela Barbera, Elio Borgonovi and Ileana

Steccolini

ABSTRACT

Purpose The purpose of this contribution is to investigate whether

popular reports can strengthen public governance by fostering greater
transparency and public participation.
Methodology/approach The analysis is based on the case of the
“Bilancio in Arancio” of the Municipality of Milan. Data are collected
through a triangulation of sources, including the authors’ direct observa-
tion, conversational interviews, the press, and a questionnaire distributed
to the citizens participating in the experience.
Findings The analysis discusses how popular reports can improve
Public Governance, and identify related critical issues. More specifically,
four key aspects of Popular reporting appear to play a central role in
strengthening governance, that is, their capacity to ensure greater

Governance and Performance in Public and Non-Profit Organizations

Studies in Public and Non-Profit Governance, Volume 5, 3 30
Copyright r 2016 by Emerald Group Publishing Limited
All rights of reproduction in any form reserved
ISSN: 2051-6630/doi:10.1108/S2051-663020160000005001
3
 4 CARMELA BARBERA ET AL.

transparency, neutrality, enhanced participation and impacts on

decision making. We suggest that every aspect represents an important
“step” to be taken in an ideal “ladder of participation.”
Practical implications Governments that want to enhance public gov-
ernance may have an interest in developing popular reports, paying atten-
tion at ensuring transparency, neutrality, stakeholders’ participation, and
their contribution to decision-making processes.
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Social implications Popular reports can provide to citizens the educa-

tion on public budgeting issues required to consciously participate in
public decision-making processes and give them greater voice and power
to express their instances. Popular reports can also promote a two-way
communication and dialogue between citizens and governments.
Originality/value Drawing on the experience of the Municipality of
Milan, more general lessons are learnt on the role of popular reports in
strengthening public governance, and on the related strengths and
weaknesses.
Keywords: Popular reporting; public governance; public budgeting;
participation; transparency; accountability

INTRODUCTION
Over the past 20 years, the proponents of Public Governance models
(Kickert, 1997, 2003; Meneguzzo, 1997; Osborne, 2006, 2010) have sug-
gested that in an increasingly pluralistic1 and plural2 State, public adminis-
trations must, among other things, ensure transparency and a growing
stakeholders’ involvement. This has given rise to the emergence of practices
of coproduction, that is, the involvement of citizens in the provision of
public services (Pestoff, Brandsen, & Verschuere, 2012). Active citizen par-
ticipation is, indeed, relevant as it improves government capacity to provide
public goods (Marshall, 2004; op. cit. Sicilia, Guarini, Sancino, Andreani, &
Ruffini, 2015), and to better address increasingly complex stakeholders’
needs (Boyle, Coote, Sherwood, & Slay, 2010; Osborne, 2010; Sicilia et al.,
2015). However, this latter literature has mostly focused on how citizens and
stakeholders can be involved in the delivery of services (Alford, 2009;
Brudney & England, 1983; Judd, 1979; Parks et al., 1981), whereas it
 Popular Reporting and Public Governance 5

appears to have devoted less attention to processes of involvement of citi-

zens through popular reports or other simplified forms of communication
on governmental financial performance.
This dearth of scholarly interest is surprising, especially in a context
where public resources have been significantly shrinking, but citizens’
expectations are, on the contrary, becoming more sophisticated.
Communication may thus appear to be a useful way to make citizens aware
of the availability and use of public resources, better informing their deci-
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sions and evaluations, and, in turn, providing inputs to political processes

of resource allocation. A greater understanding on how public finances
work may allow citizens to better understand budgeting and resource allo-
cation processes, and the public administrations to regain legitimacy in the
face of increasing discontent among citizens. In short, informing citizens on
the state of public finances can strengthen their involvement, and, thus, be
an important tool for ensuring effective public governance.
This requires looking at accounting, budgeting, and reporting not as mere
technical tools, but as integral elements of public governance. Public-sector
accounting has traditionally been seen as the tool for allocating scant
resources to political programs, and budgets have been considered central in
such processes. Reports have generally been aimed at showing compliance
with budget, thus attracting limited attention from political bodies as well as
citizens. However, in a context where public governance is being heralded as
based on increased transparency and stakeholders’ involvement, and where
the use of public resources is under stronger public scrutiny, there may be a
greater room for relying on accountability tools, such as reports, to foster
communication between public administrations and citizens.
From this perspective, the recent development of citizens’ guides for
reading budgets (e.g., the 2015 guide of the City of San Diego3) or the pre-
paration of popular reports may be seen as a possible answer to the call for
greater transparency and participative democracy, promoting accountabil-
ity and an enhancement of the governance systems.
In the light of the above considerations, this chapter will present and
discuss the case of the Popular report of the Municipality of Milan
(2011 2013). In particular, the contribution aims to assess the experience
of popular reporting in Milan in the light of the conceptual lenses of Public
Governance literature, by investigating whether and how this document
may prove useful in promoting greater transparency and public participa-
tion, but also to discuss the related critical issues. The influence and beha-
viors of the different actors participating in the preparation of this
reporting tool, as well as the underlying processes and interactions, are
 6 CARMELA BARBERA ET AL.

investigated, to better understand how civil society can strengthen govern-

ance mechanisms and what the related critical issues are.
The chapter is structured as follows. The following section briefly
reviews the literature on Public Governance, participation, and account-
ability in the reporting process. The method used in the study is discussed
next. The section that follows specifies the contexts; the case of the Popular
report of the Municipality of Milan is presented next. Adopting the lenses
of public governance is discussed in the next section, and finally, conclu-
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sions and implications are drawn in the last section.

PUBLIC GOVERNANCE, PARTICIPATION, AND

ACCOUNTABILITY

Public governance has gained momentum in recent years, in line with an

increasing governments’ reliance on cooperation, networking, institution
building and maintenance, and in response to “the declining relationship
between jurisdiction and public management” in a “fragmented and disarti-
culated state” (Frederickson, 1999, p. 702, op. cit. Bingham, Nabatchi, &
O’Leary, 2005).
Public Governance approaches (Kickert, 1997, 2003; Meneguzzo, 1997;
Osborne, 2006, 2010) place public administrations at the center of a net-
work of economic and social actors, whereby policies need to be defined
jointly with stakeholders and service provision is increasingly the result
of collaborations and partnerships between public-sector, nonprofit, and
private-sector entities. The Public Governance model implies that public
administrations take a leadership role, creating inter-organizational strate-
gic coalitions with external actors (Peters & Pierre, 1998). This scenario
poses new challenges to governmental accountability. As Grossi and
Steccolini (2014, p. 87) point out:
In response to stakeholders’ increasing heterogeneity, public governance advocates the
need for governments and public sector entities to strengthen accountability, transpar-
ency, openness and participation. In response to the pluralism in service delivery, it
emphasizes the importance of the governments’ capacity to manage, steer and monitor
contracts, partnerships and relationships with private and public sector entities, and to
take part in public networks in the pursuit of the public interest.

Along these lines, there has been a widespread recognition that “‘new
accountings’ that foster democracy” (Brown, 2009, p. 313) are required
to promote participation to decision-making processes and greater
 Popular Reporting and Public Governance 7

accountability (e.g., Boyce, 2000; Gray, 2002; Morgan, 1988; Mouck, 1995;
O’Dwyer, 2005), and to tackle with the “democratic deficit that charac-
terizes contemporary accounting” (Brown, 2009, p. 337). However, interest-
ingly, the relationship between accountability, accounting, and public
governance ideas and principles has, so far, attracted only limited attention
(Biondi & Lapsley, 2014; Grossi & Steccolini, 2014).
Focusing on the stakeholders’ side, an active citizens’ role is increasingly
becoming relevant in the context of the definition of public policies
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(see Cooper, Bryer, & Meek, 2006; King, Feltey, & O’Neill Susel, 1998;
Thomas, 1995; Vigoda, 2002; Walters, Aydelotte, & Miller, 2000; Yang &
Callahan, 2005; Yang & Pandey, 2011) and decision-making processes
require an active involvement of civil society (Brown, 2009). This results
into a growing demand for accountability (GASB, 1987; Patton, 1992;
Sinclair, 1995; Staats, 1990; Steccolini, 2004; Taylor & Rosair, 2000),
through its multifaceted meanings of responsibility, attention to transpar-
ency, participation strengthening, and stakeholders’ involvement.
Indeed, stakeholders’ participation and involvement are increasingly high-
lighted as being central to reap “the benefits of (good) governance” (Béné &
Neiland, 2006, p. 25; see also Yang & Pandey, 2011). Participatory
approaches have increasingly attracted scholarly attention. Some scholars
have looked at the intensity of participation (e.g., Arnstein, 1969; Deshler &
Sock, 1985), others at the “institutional design” that characterizes different
mechanisms of participation and the administrative values that participation
serves (e.g., Fung, 2006), still others have considered the related dilemmas
(Innes & Booher, 2004). More specifically, Michels and De Graaf (2010) have
argued that, while being seen as fostering greater democracy (see also Irvin &
Stansbury, 2004; Michels & De Graaf, 2010), citizens involvement may have
both positive (e.g., increasing public engagement, encouraging people to listen
to different opinions, strengthening the legitimacy of decisions) and negative
(in terms of degree of representation of interests and social groups) effects.
However, the abstract principles of participation and involvement need
actual processes to be put in place so as to give them concrete application
and substance. Accounting, budgeting and reporting may provide such pro-
cesses, under different forms, including participatory budgeting, social
reporting, and popular reporting. Participatory budgeting is the typical tool
adopted for involving citizens in resources’ allocation (e.g., Goldfrank &
Schneider, 2006; Krenjova & Raudla, 2013; Lerner, 2011; Rossmann &
Shanahan, 2012; Wu & Wang, 2011, 2012; Zhang & Liao, 2011); social
reports (Condosta, 2008; Manni, 2011; Marcuccio & Steccolini, 2005,
2009; Steccolini, 2004) are aimed at informing citizens on the programs
 8 CARMELA BARBERA ET AL.

implemented, in terms of services provided and investments as well as

areas of intervention and public needs covered. Extant literature on partici-
patory budgeting and social reporting has highlighted that these tools
may promote greater accountability and transparency, thus enhancing
governmental governance and also provide opportunities for learning and
organizational change (Barbera, 2013). Popular reporting, that is, the
reader-friendly communication on public administrations financial condi-
tions and performance, as well as decisions on the allocation of public
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resources (Yusuf, Jordan, Neil, & Hackbart, 2013), may represent an

important form of stakeholders’ involvement. The preparation of popular
reports has been particularly encouraged for many years by the
Government Finance Officers Association (GFOA), that is, the public
finance officials throughout the United States4 and Canada. Recognizing
the difficulties faced by those who are not familiar with accounting and
financial reporting, the GFOA invites governments to “supplement their
CAFR [comprehensive annual financial report] with simpler, ‘popular’
reports designed to assist those who need or desire a less detailed overview
of a government’s financial activities.”5 GFOA also displays the characteris-
tics that popular reports may follow in order to be more effective, such as
presenting their scope; showing data in an easily and understood manner as
well as attractive way and using a concise and clear style; avoiding technical
jargon to meet the general audience; using comparative data to help identify
trends. They should also be uploaded on governments’ websites, encourage
readers’ feedbacks and present credible and objective information. In 1991,
the GFOA has also established the Popular Annual Financial Reporting
Awards Program (PAFR Program) addressed to any type of government at
either the state or local level that creates a popular annual financial report
for the general public.6 In sum, popular reporting combines a voluntary nat-
ure with a distinctive orientation toward a specific category of stakeholders
(citizens). This results in a dual effort to present the budget in a
simplified but not simplistic way and to select only those information
that are supposed to be more relevant in order to satisfy citizen expecta-
tions. Our analysis focuses on this latter type of tool. Interestingly, in Italy,
in spite of timid references to simplified forms of communication in a few
laws, there are no specific principles or rules governing popular reporting,
which, when adopted, becomes a voluntary exercise. However, recent laws
have encouraged the publication of simplified versions of public final
reports for citizens on Municipal websites, showing the main budgetary
data, highlighting the financial, human, and instrumental resources used
by the Municipality to implement its institutional activities, as well as
 Popular Reporting and Public Governance 9

the results achieved (e.g., the degree of coverage and the quality of public
services provided to citizens).

METHOD

This research is based on an investigation of the case study of the

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Municipality of Milan. The Popular report of the Municipality of Milan

was prepared by a local Civic List named “Movimento Milano Civica”
(MMC), a nonprofit association whose purpose is to support the Mayor by
“actively and independently participating to the political municipal life,
and complying with the principles of participation, transparency and collec-
tive decision making, in order to concretely contribute to a proper and effi-
cient management of public goods. […] The Association pursues its aims
through a series of activities: study, research, debate, publishing initiatives,
and training and cultural updating in the fields of politics, economy, culture
and in relation to social problems.”7
MMC is currently also one of the Council Member Groups8 of the
Municipality of Milan. One of the authors was involved in the process by
virtue of her technical competences and was thus in the position to person-
ally observe its development over time.9 In particular, the role of the
researcher was aimed at answering MMC’s request for information about
the main contents of public budgets and year-end financial reports. For
example, the researcher answered to questions such as “What is the differ-
ence between the budget and the year-end report?,” “Why are the revenues
for investments reported in the budget always higher than those reported in
the year-end report?,” “How can I interpret the final financial results of the
Municipality?”10 This ensured neutrality of the researcher as well as reason-
able freedom from unacknowledged research biases (Miles & Huberman,
1994) as the document per se was directly written by MMC and the con-
tents to be included were identified by the Civil List. Moreover, also
the participation of the researcher to the meetings organized for the pre-
paration of the document and those aimed at presenting it to citizens
was intended to provide technical support when specifically requested.
The researchers were guided by the following presuppositions: first, we
are firmly convinced that popular reporting (as well as all the tools that are
aimed at increasing accountability and transparency, and in the end greater
levels of democracy, such as social reports and participatory budgeting)
should be characterized by clear, comprehensible, and truthful information,
 10 CARMELA BARBERA ET AL.

and they should be technically correct. Second, we think that the role of
academia should be aimed at incentivizing more informed choices in terms
of the reasons, the meaning and the different logics behind specific deci-
sions, including those related to the allocation of public resources. As a
consequence, we recognize our role being both a source of technical exper-
tise and aimed at promoting critical thinking.
To ensure a richer and reliable analysis, we relied on a triangulation of
informants, data sources and methods (Berg & Lune, 2012; Patton, 2002;
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Pettigrew, 1990; Taylor & Bogdan, 1998). More specifically, the analysis is
based on data coming from the media; official documents of Milan
Municipality (such as annual reports, plans, and budgets); personal memos
gathered during the drafting process and meetings organized for the presen-
tation and discussion of the document; informal e-mails exchanged with
the players involved in the process of popular reporting; conversational
interviews (Werner & Schoepfe, 1987) as well as a questionnaire adminis-
tered to the citizens attending a public presentation of the popular report.
More specifically, a questionnaire with both closed- and open-ended ques-
tions was distributed to citizens during the meetings organized to present
and discuss the second edition of the “Bilancio in Arancio” in 2013 (of 50
questionnaires distributed, 38 were collected and, for the purposes of this
analysis, 1 questionnaire was discarded due to missing information).
Among the 37 citizens that answered the questionnaire, 10 were member of
MMC Civic List, 16 were not members of MMC (of these, 2 declared to be
part of the political minority), and 12 did not made explicit this informa-
tion. Eighty-four percent of them declared to have supported the candida-
ture of the current Mayor during the 2011 political election. The average
age was 68 years (with only one person under 30).
Direct observation and interviews with the authors of the Popular
Report proved particularly useful to understand the approach used in
defining the contents, the reasons, the processes, and the impacts of the
new tool. They also allowed us to reconstruct the stages of report prepara-
tion and the critical issues identified by the different actors involved in the
drafting process and by the end users (i.e., the citizens).

THE CONTEXT: THE MUNICIPALITY OF MILAN

The Municipality of Milan is the hub of a metropolitan area and it is the

main financial and economic center of Italy. In recent years, Milan
 Popular Reporting and Public Governance 11

Municipality has faced significant financial difficulties, related to balancing

an increasingly constrained budget while ensuring the continuous provision
of services to an increasingly heterogeneous and demanding citizenship and
keeping pace with necessary investments. These difficulties have been exa-
cerbated by the need to re-qualify local areas and to develop infrastruc-
tures, especially in view of the Expo 2015; the size of the Municipality and
the strong attraction it exercises on students, workers, tourists, and foreign
investments, which make it complex for the local administration to plan
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services, investments, and development programs; as well as the recent

financial crisis, which has translated into reduced revenue streams,
increased financial constraints, and increased demand for social services.
Indeed, since 2009, the Municipality of Milan has witnessed a decrease
in tax revenues and transfers from the State, the Region, and other public
bodies. In addition, swaps investments made in 2005 and following years
caused, at least until 2011, huge losses.11 Balancing both operating expendi-
tures and investments, and facing the increasing cuts of State transfers,
became the main challenges between 2011 and 2012, and were declared as
such both in budgetary documents and in public speeches by the current
Mayor, the CEO and the Executive Member to budget. To absorb these
challenges and restore a balanced budget, the municipality increasingly
relied on raises in taxes and fees, including highly unpopular increases
in public transport tickets, and the enlargement of the Municipality area
subject to an entrance fee (Area C). Also, the Municipality resorted to
“extraordinary” dividends from subsidiaries, the establishment of Real
Estate Funds to improve the management of public assets and the renego-
tiation of derivatives. All of these choices attracted the attention of media
and citizens and were widely discussed in the local (and, in some cases,
national) press.
All these dynamics seem to have contributed to a growing interest of
citizens in better understanding how public resources are allocated and
used. This led the Civic List MMC to start an initiative aimed at preparing
Milan’s Municipality Popular report. This experience represents an inter-
esting example of bottom-up governance mechanism which witnessed the
participation of different actors (namely, the member of the Civic List
MMC, academics, the municipal CFO unit) in the preparation of this
document.
The following sections will describe the preparation of the popular
report in the Municipality of Milan (2011 and 2012) and focus on the
related processes and actors involved, discussing its implications for public
governance, and pointing to its strengths and critical issues.
 12 CARMELA BARBERA ET AL.

POPULAR REPORTING IN MILAN

In 2011, the MMC Civic list decided to adopt a Popular report to commu-
nicate to Milan citizens about the state of their municipality’s finances. The
awareness of the existence of similar experiences undertaken in other
European countries and the belief in the importance of the theme of com-
munication and transparency toward citizens were two of the reasons that
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led MMC to transform its general interest in the public budget of the
Municipality of Milan in a project of active democracy, leading to the pre-
paration of this document. In particular, the aim was to give citizens the
opportunity to understand how public resources are spent, to “train people
to read financial data and to become aware and active citizens,” and to
allow citizens to evaluate the performance of their Municipality.12 The idea
behind the project was that the Municipality itself would become aware of
the importance of this tool and decide to adopt it in the following years.
Given the lack of specific skills in the area of public finances within
MMC, qualified people needed to be involved. In particular, one of the
authors of this contribution gave her technical support through the
exchange of e-mails, phone calls, as well as the participation to the meet-
ings organized by MMC during the drafting process. Moreover, she was
also asked to explain basic budgetary principles to citizens attending public
meetings, and answer their possible questions on technical aspects of public
finances (see also the section “Method”).
MMC received also support from the Municipality’s CFO unit, which
provided information and clarifications on Milan budgets and reports. The
interactions between MMC, the CFO unit, and the academic resulted in
the elaboration of the structure of the popular report (see Table 1) and the
definition of its contents.
The drafting processes of the two editions of the Popular report did not
take place without difficulties. On the one hand, within MMC there was a
lack of expertise on public budgeting themes. In this sense, academics con-
tributed to ease such difficulties by explaining the accounting documents of
the Municipality and supporting their analysis. As anticipated in “Method”
section, clarifications were given, for example, on the main differences
between the budget and the year-end report; how to interpret the final
financial result; and also the nature of the different revenues and the desti-
nation of the expenditures reported in the accounting documents. On the
other hand, the CFO unit provided additional updates and clarifications on
the budgetary reports of the Municipality.
 Popular Reporting and Public Governance 13

Table 1. The Popular Report of the Municipality of Milan: Table of

Contents.
Paragraph Title Contents

Introduction • The municipal budgetary system

• The characteristics at the basis of a good budget
Why a Popular report? • The purpose of the Popular report
• What are the contents of the popular report?
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What are the contents of the
municipal budget?
What tells you the municipal
budget?
How big is the “Milan Family”?
Some proposals from MMC
Conclusions
• The main contents of a municipal budget and
report: revenues, expenses, indicators
• The main items of expenditure and revenues of the
Municipality budgets and reports
• The main fiscal indicators
• The financial result
• The difference between public budgets and private
budgets
• Particular events that affected the Municipal
budget in recent years
• The Municipality’ subsidiaries
• The Municipal population, personnel
• MMC proposals for improving the Municipal
budget
• Some MMC reflections on choices made by the
previous administration and suggestions for the
current administration

The popular reports were immediately published on the MMC website

and open meetings were organized to disseminate them. In particular, the
first Popular report was completed at the end of 2011 and four meetings
were organized in 2012 by MMC (three meetings between January and
February and a last meeting in mid-December) in order to differentiate
their location and audience. For example, at the third meeting organized
by MMC in collaboration with the Association “Facciamo Rete,”13 also
high school and university students participated in the debate. The first
edition of the Popular report was also presented during an initiative orga-
nized by “Principia network,”14 on February, 2012, in which MMC and
the academics were invited to discuss the document. Six thousand and two
hundred copies of the document were printed: the first 200 were given out
to the Mayor, the Councilors, the Executive Members, the CEO and its
municipal unit, some journalists, and to the Presidents of the different
areas of decentralization or constituencies in which the Municipality of
Milan is subdivided.15 The others were distributed to MMC members,
 14 CARMELA BARBERA ET AL.

who, in turn, were responsible to spread the document to their personal

contacts.
Also the second edition of the Popular report, completed in March,
2013, was followed by four meetings organized between April and May
2013. The document was first presented in a municipal building to MMC
members, with the participation of the Municipality CEO and one of the
author of this study; the three following meetings were organized in three
different areas of decentralization or constituencies. 1,000 copies of this
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second version of the document were printed and given out, with a similar
process undertaken for the previous edition.
In both editions, the dissemination process took place also through
e-mails and the distribution of leaflet. Importance was given to the infor-
mal dissemination through personal contacts. Within the Municipality,
the reaction of Councilors, the Executive Body Members, and the Mayor
toward these experiences was positive although they did not show a
higher interest in becoming more closely involved. MMC was thus
encouraged to carry on with the preparation and dissemination of popu-
lar reporting. The openness of some Executive Body Members,
Councilors, the CEO, and the vice-mayor to attend some of the meetings
witnesses the interest in the initiative and their willingness to use this
opportunity to open a dialogue with citizens on public finances and
related political decisions. Indeed, the Mayor, the Councilors, and the
Executive Members were invited to comment upon the Municipal finan-
cial situation at the debates organized by MMC (in the first edition,
the invitation was accepted by the Executive member to budget, the
one responsible for Trade, Productive Activities, Tourism and Local
Marketing, the one responsible for Municipal Assets and the one respon-
sible for Labor Policies, Economic Development, University and
Research; the second edition saw the participation of the vice-mayor).
Also the CEO of the Municipality of Milan attended two meetings,
one per each edition. The Popular report therefore encouraged public
discussion and promoted debate between the citizens, administrators,
and politicians16 who attended them. The meetings gave evidence of
the reasons behind specific decisions taken by the public administration,
the difficulties related to the identification of new sources of income,
and showed the financial results attained by the Municipality. The
meetings were also intended at promoting discussion around the
Popular report itself, in order to collect useful suggestions for further
editions.
 Popular Reporting and Public Governance 15

IS POPULAR REPORTING A PUBLIC

GOVERNANCE TOOL?

In this section, we discuss the experience of popular reporting in the

Municipality of Milan as a form of public governance, to assess its
strengths and emerging critical issues. More specifically, we discuss lessons
to learn from this experience in terms of whether it ensures greater trans-
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parency, neutrality, enhanced participation and impacts on decision making.

We can look at these four aspects as a “ladder” of participation, whereby
the first requirement is for popular reporting to contribute to better trans-
parency on governmental financial results, the second is for it to ensure
neutrality and representation, the third is to also strengthen stakeholders’
participation, and the fourth refers to the ability of popular reporting to
actually impact on decision-making processes and, thus, the allocation of
resources.

Popular Reporting and Transparency

In a process of popular reporting, the first step toward a higher citizens’

participation is represented by a greater understanding and transparency
about public budgeting and financial results.
Transparency can be intended on the one hand in terms of comprehensi-
bility, thus the appropriateness of the Popular report to allow citizens to
better understand budgeting processes and financial data present in tradi-
tional public budgets and reports; on the other hand, in terms of compre-
hensiveness, that is, the richness and quality of information.
The observation of the reactions of citizens who participated to the
meetings organized by MMC (translated by the authors into personal
memos) was useful for assessing whether the Popular reports were
perceived as tools to make traditional budgets and reports more compre-
hensible to nonexperts. According to citizens, the Popular report effectively
meets this goal: many citizens, during the meetings, declared that this tool
had helped them to better understand the municipal budget:17
I think that this document sheds light on how revenues collected in terms of taxes and
tariffs from services are used by the Municipality, or at least what expenditures they
should cover.
I had heard about derivatives but I had no idea about their meaning and problems
caused to the Municipal budget. Now I have a more clear understanding about them.
 16 CARMELA BARBERA ET AL.

I find this document effective in how it shows data and it gives more transparency to
the contents of the Municipal budget.

This may be associated to the fact that, while usually the decision
to adopt forms of popular reporting is generally taken by governments,
the “Bilancio in Arancio” experience has its origins in the civil society,
and in particular individuals actively involved in the Municipality
political debates, whose purpose was to make municipal financial data
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comprehensible to people who, like them, have no expertise on public

finance.
Critiques, however, emerged during the meetings with reference to the
presentation of data within the documents: some people proposed to make
greater use of tables, in order to highlight historical trends, and to show
data more clearly, for example, in terms of results achieved by the
Municipality with reference to its main areas of intervention:18

From a visual perspective, I think that the use of tables in this document would help
citizens to better identify the main trends of budgetary and year-end financial data.

I think that people would be interested in identifying expenditures related to some main
areas, for example how much the Municipality spends for education. How much does it
spend for social services? I would also like to have more information about the initial
objectives related to the amount of resources oriented towards these areas of interven-
tion and the results achieved.

I would like to see in the Bilancio in Arancio a greater detail of expenditures.

I would like to have more information about the subsidiaries of the Municipality and
its property assets.

Some of these proposals were accepted in the second version of this

document (e.g., Table 2 shows a detail of operating expenditures of the
Municipality of Milan for the 2010 and 2011 year-end reports and the 2012
budget).
Considering the comprehensiveness of the document, not only numbers
are exposed in terms of incomes and expenditures, or indicators, but the
documents also explain to citizens the meanings and characteristics of
financial data. For example, the differences between the budget and the
year-end statement; the different types of revenues and expenditures, and
the most critical and “controversial” aspects of the municipal public
finances are detailed.19 As a consequence, not only through this document
data extracted from the comprehensive annual financial budgets and
reports are reported (e.g., the main budgets and financial statements
numbers), but other information such as the municipal strategies adopted
 Popular Reporting and Public Governance 17

Table 2. Operating Expenditures Presented by Typology, 2010 and 2011

Year-End Reports and 2012 Budget, Municipality of Milan.
Comune di Milano 2010 2011 2012

Personale 628 28% 622 26% 608 18%

Acquisto di beni di consumo 7 0.3% 7 0.3% 11 0.5%
Prestazione di servizi 1.312 58% 1.478 62% 1617 48%
Utilizzo di beni di terzi 13 1% 13 1% 14 0%
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Trasferimenti 131 6% 104 4% 156 5%

Interessi passivi 109 5% 117 5% 126 4%
Imposte e tasse 41 2% 38 2% 39 1%
Oneri straordinari della gestione corrente 13 1% 18 1% 452 13%
Ammortamenti
Fondo svalutazione crediti 0% 0% 359 11%
Fondo di riserva 0% 0% 10 0%
Totale 2.252 2.398 3.391

Source: Extract from “Bilancio in Arancio,” 2013 Edition.

to approve balanced budgets, with the related pros and cons. Moreover,
within the documents, information about the municipal staff and the subsi-
diaries are provided. Some citizens also proposed to extend the content of
the Popular report so as to encompass not only financial data, but also
more explanation about the main political and technical assumptions
underlying decisions on public resources. For example, they asked for more
information on the external constraints that affect public policy (i.e., laws,
governance systems, budget levers). One citizen, in particular, asked “Why
is the Stability Pact so relevant for approving a balanced budget?” and the
ensuing debate attracted great attention from the other citizens. Not sur-
prisingly, details on expenditures were the most important information on
which citizens focused their interest (and, as reported above from observa-
tions made by some citizens and recorded in the form of personal memos,
they were also the aspects on which they proposed to focus greater
attention).
In short, the information contained in the popular reports and the meet-
ings organized to present them appear to have stimulated citizens’ curiosity,
and “trained” them on public finance and accounting issues, by providing
technical explanations through the use of a simple terminology and the
opportunity to openly discuss them. Interestingly, among the citizens who
answered the questionnaire, 73% of the respondents stated that it met its
information needs (yes/no question). So, at least for those that were
 18 CARMELA BARBERA ET AL.

involved in the process, the popular report appears to have reached the aim
of increasing more transparency on public finances.

Popular Reporting and Neutrality

Transparency on data and information are required if citizens are expected

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to participate to, and affect, decision-making processes; however, neutrality

from specific interests of any group of stakeholders is crucial for the pur-
poses of accountability and fair evaluations on public activities.
A few citizens during the meetings highlighted the importance to
adopt an apolitical and critical approach during the drafting process of
popular reports in order to objectively report information and acquire
both internal and external credibility. This latter instance is bound to the
values of impartiality and neutrality in participatory and stakeholders’
involvement processes. For example, they suggested MMC to include
other political movements and parties, with various political colors, in
order to provide the document with information that had passed under
the scrutiny of different political lenses and come out with agreed-upon
data:20
I really appreciate your work, it is important to give citizens the possibility to under-
stand how the resources collected from them by the Municipality are used. However, I
think that this sort of document should be also shared within the Municipality by the
different parties in order to be more credible and to have different perspectives.
How can I be sure about the data, or at least their interpretation, if this document is
the expression of your ideas and so come from the ranks of your Movement?

These insights from citizens highlight that popular reports may thus
respond to the need of raising awareness about public activities and
achievements, both internally and toward external stakeholders, and to
assess public actions and revise decisions, if necessary. Public administra-
tions may also want to adopt it following a “managerial fashion” (e.g.,
Marcuccio & Steccolini, 2005; Steccolini, 2009). In this case, the main
objective is to legitimize public actions through a relatively new and appre-
ciated tool. As a consequence, the risk that popular reporting is used
instrumentally to enhance legitimacy may also arise. Among the values
typically associated to accountability and public governance, impartiality is
certainly considered as a relevant aspect (Haque, 2000), also in relation to
the “contents of public-service communications to the media and the public
[and] positive or negative comments on matters of government policy or
 Popular Reporting and Public Governance 19

Table 3. The Contribution of the Government, the Academia and

Citizens to the Preparation of the “Bilancio in Arancio.”
Pros Cons

Government • Hold the relevant information • Popular report as instrumental

• Have technical skills and knowledge for political consensus
Academia • Technical approach • Difficulty in fully capture the
information needs of citizens
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Citizens • Can better understand citizens • Do not hold knowledge in

difficulties when approaching public accounting themes
accounting documents
• More inclined to translate instances of
greater clarity and comprehensibility
in the popular report
• More oriented toward the aim to
bring truthful information out

behavior to the media, legislative committees, or various attentive publics”

(Aucoin, 2012, p. 179). The question thus arises on which actors should be
involved in, and who should be the real promoter of, popular reports. The
“Bilancio in Arancio” experiences prove useful in identifying the main pros
and cons, further detailed in Table 3, associated to the involvement of
governments, the academia or citizens. The simultaneous presence of differ-
ent actors seems to promote a good mix of technical expertise, knowledge
and sensibility toward comprehensibility and transparency of information
that popular reports should incorporate. However, it also shows some
drawbacks.
It should be noted that, in the case analyzed, MMC is a political Civic
List, thus composed of politically engaged citizens that inevitably adhere to
a specific political ideology. In this sense, MMC nonetheless expresses the
concerns and the attention of a group of citizens. Certainly, this could be a
critical point in the evaluation of the degree of impartiality related to the
selection process of key information to be included in the “Bilancio in
Arancio.” Collaboration with budget experts within the organization and
with academics may allow, however, a mix of quality, reliability and clarity.
One aspect that is important to highlight is that only members of the politi-
cal majority decided to participate in the public debates; political minority
involvement would have favored further insight about the policies and
budgetary data.
When asked who should be responsible for the creation of the popular
report, most of the citizens responding to the questionnaire (21.6%)
 20 CARMELA BARBERA ET AL.

9
8
8
7
6 6
6
5
5
4
4
3 3
3
2
1
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0
Associations Municipality Municipality Political Political Municipality, University or
with no and Political movement movement Political research
declared movement and University movement center
political or research and University
affiliation center or research
center

Fig. 1. Who Should Prepare Popular Reports.

declared that it should be an initiative promoted by the Municipality, while

others suggested the involvement of both universities or other research
centers and political movements (16.2%) or associations with no declared
political affiliation (16.2%) (see Fig. 1). Two citizens emphasized the need
to involve as many different stakeholders as possible in the preparation
and presentation of the popular report in order to guarantee greater hetero-
geneity and impartiality.

Popular Reporting and Citizens’ Participation

Citizens’ participation is stated to be a prerequisite for better governance.

What lessons can be learnt from the “Bilancio in Arancio” experience
as to the capacity of popular reporting to strengthen participation and
stakeholders’ involvement? To answer this question, it is essential to
look at the communication process and at citizens’ participation in the
meetings.
The dissemination process of the “Bilancio in Arancio” started with the
publication of the documents on the MMC website, its circulation by
e-mail and the distribution of original copies and leaflets mainly to munici-
pal representatives and MMC members that, in turn, were asked to further
disseminate the documents, as described above. The underlying strategy
was to first test the impact of the document on a sample of citizens, in
order to identify critical factors and areas for improvement; the high costs
 Popular Reporting and Public Governance 21

for the dissemination of the document on a large scale would not have
allowed, however, a greater diffusion. Thus, only few actors were directly
involved in the first edition, where only the second meeting was extended
to high college and university students, while in the second edition three of
the four meetings were organized in three different municipal areas of
decentralization or constituencies. This was made possible thanks to the
support of the Presidents of these areas to whom the task to inform the
members of the respective local Councils (and, indirectly, other citizens)
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was delegated; 20 citizens on average participated in the meetings.

Almost 49% of citizens who completed the questionnaire got knowledge
about the document after receiving an e-mail, 30% through word of mouth
(of these, about 11% directly by MMC members) and 13.5% looking at
MMC website. The main communication channels used for informing
about the meetings organized for the presentation of the document were
e-mail (59.5%), followed by word of mouth (27%, with 8% of the respon-
dents being directly informed by MMC members).
Citizens’ intervention during the debates was rather high in both edi-
tions; many of them asked questions and made observations on the con-
tents of the Popular report, not only about the type of information
provided (see previous subsection) but also on how to improve it in terms
of distribution processes. This emerged not only during the meetings but
was also confirmed in the questionnaires, where many of the respondents
highlighted the importance to distribute the document through the different
municipal areas of decentralization or constituencies (13.5%), thus con-
firming MMC choice; others21 suggested to publish the document on the
Municipality website, to distribute it in secondary schools and universities,
in meeting places such as squares and libraries, to send e-mails to citizens
and to disseminate it through the local press. A few citizens also high-
lighted the importance to receive more frequent updates on the status of
municipal finances and budgetary processes; this may also allow to avoid
media sensationalism and to reduce citizens’ confusion or surprise in the
face of municipal decisions.
In general terms, the experience shows that a bottom-up perspective
seems to promote greater simplicity, clarity, and impartiality, as seen
above, but it raises concerns about the widespread diffusion of the initia-
tive. This is due on the one hand to resource scarcity, and on the other to a
lower chance to access a wide range of communication channels. This
means that without an institutional support, the popular report may not
ensure high inclusiveness. The absence of a wider institutional support in
the case under analysis may also be the cause of the law participation rate
 22 CARMELA BARBERA ET AL.

at the meetings organized by MMC. However, from this perspective, the

literature on citizens’ participation shows that the public tends to alienate
itself from the public affairs process (Berman, 1997; op. cit. Irvin &
Stansbury, 2004), as a consequence even an higher institutional support
without the conditions for citizens’ participation may not lead to high rates
of attendance.
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Popular Reporting and Impact on Decision Making

The attitude of the “Bilancio in Arancio” to affect policies and decision

making is particularly difficult to assess. This is also due to the fact that
only two editions have been so far implemented.
Certainly, the eight meetings organized promoted a debate among
citizens, municipal representatives, representatives of political parties, and
the academics about budgetary decisions and financial constraints. It also
arouse a great interest from the Executive Member to budget, that in
February, 2012, defined the Popular report as “a brilliant idea that the
Municipality should adopt,”22 and the Executive Member to Trade,
Productive Activities, Tourism, Local Marketing, that in June, 2012, made
public considerations about several issues highlighted in the first edition of
the “Bilancio in Arancio.”23
At the time of writing this chapter, there is no evidence that the
Municipality of Milan has embraced the idea to adopt a Popular report.
Nevertheless, a first reporting tool for financial institutions and rating
agencies has been prepared at the end of 2012. According to what it is
reported on the Municipality website,24 the Executive Member to budget
defined this document as “the first step towards the realization of a simplified
budget, in the coming months, for families.”
The popular report may represent a key tool for gaining access to the
last step of the ladder of participation, that is, actual impact on budgetary
decisions. The meetings organized by MMC promoted an open debate
between citizens and public administrators; this seems to prove that, consis-
tently with political and managerial willingness to get involved, the popular
report may be a possible way for improving a two-way dialogue between
citizens and the public administration. This was observed in Milan where
some Executive Members, the CEO, and the vice-mayor accepted the
invitation to discuss with citizens, although this does not represent yet
a consolidated and generalized attitude within the Municipality to open
public debates. Not only participatory budgeting (as advocated, e.g., by
 Popular Reporting and Public Governance 23

Ebdon & Franklin, 2006, p. 441), but also popular reports can, thus, represent
an opportunity “to gather input.” Popular reports, with respect to participa-
tory budgeting, may give citizens the premises and basic useful competences to
participate with greater awareness to decision-making processes.

CONCLUSIONS
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The proponents of Public Governance models (Kickert, 1997, 2003;

Meneguzzo, 1997; Osborne, 2006, 2010) have suggested that in an
increasingly pluralistic and plural State, public administrations must,
among other things, ensure transparency and a growing stakeholders’
involvement. While the literature has mostly focused on how citizens and
stakeholders can be involved in the delivery of services (Alford, 2009;
Brudney & England, 1983; Judd, 1979; Parks et al., 1981), less attention
has been devoted to the processes of involvement of citizens through
simplified forms of communication on governmental financial perfor-
mance. Communication, indeed, is a useful way to inform citizens and
allow them to participate to political processes of resource allocation,
thus ensuring effective public governance. Popular reports may represent
an answer to the call for greater transparency and participative democ-
racy, promoting accountability and an enhancement of the governance
systems.
The chapter discussed the case of the Popular report of the Municipality
of Milan (2011 2013) adopting the conceptual lenses of Public
Governance literature. Focusing on behaviors, decision-making processes,
and the relationships among the various actors involved, the analysis shows
that popular reports can improve Public Governance, but also highlights
some possible risks that promoters of such processes should try to avoid.
More specifically, four key aspects of Popular reports, to be considered
as a “ladder of participation,” appear important, that is, their capacity
to ensure greater transparency, neutrality, enhanced participation, and
impacts on decision making.
The analysis shows that the popular report, to the extent to which it
presents information in a comprehensible and comprehensive way, can
allow citizens to better access financial data and become aware on the use
of public resources, thus increasing transparency and accountability. A
bottom-up approach may promote (i) the identification of information
needs that are not satisfied by traditional accounting documents defined
 24 CARMELA BARBERA ET AL.

by public budgeting rules; (ii) the identification of information that may be

of interest to citizens; (iii) a less opaque presentation of data; (iv) a higher
quality of information reported to citizens. However, as emerged from the
study, specific attention needs to be devoted to how data are reported in
the document (e.g., the use of tables, the presentation of historical trends,
the reference to specific areas of intervention when showing resources’
allocation).
At the same time, the analysis shows that in order for the popular report
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to be an effective public governance tool, it should not reflect specific inter-

ests of any group of stakeholders, but it should be characterized by the
neutrality of the information provided. From this perspective, the involve-
ment of the civil society, public administrators, and experts from academia
should encourage the creation of a document that is both technically
correct and truthful in relation to information provided (e.g., financial data
and public policies), as well as clear and understandable in his reading. The
participation of administrators from all the political parties may also
ensure greater neutrality, transparency, and credibility.
Popular reports can also increase stakeholders’ participation. On the
one hand, they should represent the basis for a broader debate, promoting
citizens’ involvement. From this perspective, choices as to the places
where to present and discuss reports are relevant if a wider participation
is to be achieved. On the other hand, the study analyzed shows that
resource scarcity and the need to disseminate the report on a large scale
require (at least) a certain degree of institutionalization, to access broader
communication channels, thus promoting a widespread diffusion of the
initiative.
Finally, this study highlights that the popular report can also educate
citizens on budgeting processes and financial data and thus enhance dialo-
gue between them, politicians and the municipal administration, thus
providing the bases for promoting a more informed participation to
decision-making processes.
As any piece of research, this study presents limits. First, 84% of the
citizens that answered the questionnaire declared to have supported the
candidature of the current Mayor during the 2011 political election. A pro-
blem related to representativeness may thus arise; however, only 10 citizens
specifically declared to be member of the MMC Civic List. In general
terms, this experience remains a case of popular reporting deeply rooted
within a political movement, which is an expression of a part of the local
community. Second, although the Bilancio in Arancio promoted a dialogue
between the administrators and those administered, the participation to
 Popular Reporting and Public Governance 25

the process and to the meetings did not take place on a large scale: it is
therefore not possible to ascertain the effects of a more heterogeneous
involvement of citizens, both with regard to different segments of society
(e.g., different associations, political movements, etc.), and in relation to
the territory (the inclusion of more city districts). Moreover, the impact
on the decision-making processes of the Municipality still appears to be
limited. Finally, in the experience analyzed, the document specifically
referred to the accounting performance of the Municipality. From this per-
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spective, the popular reporting may also give more evidence of the pursuit
of the outcomes in relation to public actions (Peters & Pierre, 1998), in
terms of whether public responses meet real needs and the quality and
quantity of services provided.
Further research may, thus, compare different experiences of popular
reporting (or reader-friendly budget) currently underway, in the Italian
context and/or at the international level, in order to investigate how these
documents increase the clarity and understandability of public budgets to
nonexperts.

NOTES

1. Characterized by heterogeneous interests (see Borgonovi & Mussari, 2011;

Mussari, 2011).
2. In which the public interest is pursued through integrated actions of different
actors.
3. The Guide to the budget of the City of San Diego has been created with the
aim of being “a solid foundation of knowledge of the City’s budget process” (http://
www.sandiego.gov/iba/pdf/bpguide.pdf).
4. According to the study conducted by Yusuf et al. (2013) examining the state
of local popular financial reporting in U.S., 75 percent of local governments have
created popular financial reports.
5. http://www.gfoa.org/preparing-popular-reports, last access April 19th, 2015.
6. http://www.gfoa.org/popular-annual-financial-reporting-awards-program-
pafr-program. At the local level, some examples of municipalities that have received
this Award are the City of Pittsburgh, Pennsylvania (http://pittsburghpa.gov/
controller/pafr); the City of Buffalo, NY (https://www.ci.buffalo.ny.us/Home/
Leadership/City_Comptroller/pafr); The City of Edmonton, Canada (http://www.
edmonton.ca/city_government/facts_figures/coe-annual-reports.aspx).
7. http://www.movimentomilanocivica.it/source/istituzionale/pagina.asp?id=7.
8. In Italy, the City Council is composed by a President, who runs the work
and activities of the Council; Board committees, with advisory and control tasks;
the Assembly Member Groups, i.e. members who share the same political
orientation.
 26 CARMELA BARBERA ET AL.

9. Note that our support to the Popular report drafting process is closely linked
to our specific technical skills; none of the authors is enrolled in the Milan Civic
Movement (MMC).
10. Source: e-mail exchanges with the MMC members and personal memos.
11. Losses were linked to unfavorable interest rates for the Municipality of
Milan, hidden fees to be paid to the four International Banks (Deutsche Bank,
Depfa Bank, JPMorgan and UBS) involved in derivative transactions, the resources
allocated to a specific fund for losses on derivatives established by the Municipality
in order to cover possible losses on these instruments (provisions amounted to h80
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million in 2011). The new City Council, in late 2011, concluded an agreement with
the four International Banks. This agreement enabled the Municipality to have
useful resources for improving budget balances for the year 2011 and, to a lesser
extent, for 2012.
12. Movimento Milano Civica (2011), Bilancio in Arancio Lettura trasparente
del Bilancio del Comune di Milano.
13. http://www.facciamorete.eu/blog/chi-siamo
14. http://smartdust.ning.com/
15. The Municipality of Milan is administratively divided into nine areas of
decentralization or constituencies; in each one there is a local Council, that is
elected simultaneously to the Mayor and the City Council.
16. Note that, with reference to the City Council, the political opposition decided
not to take part in the meetings.
17. From personal memos collected during the meetings organized with citizens.
18. From personal memos collected during the meetings organized with citizens
and questionnaire.
19. For example, the increase in the budget item “Function concerning roads and
transport” was due to the subscription of a new service contract with the local pub-
lic transport operator.
20. From personal memos collected during the meetings organized with citizens.
21. From the questionnaire, open question “Please, indicate any suggestions for
improving the communication and diffusion processes of the Bilancio in Arancio”.
22. http://www.z3xmi.it/pagina.phtml?_id_articolo=573-Bilancio-2012-il-dilemma-
del-Comune-di-Milano-Come-coprire-un-disavanzo-di-spesa-corrente-di-580-milioni-
di-euro.html#.VUINrJNt_j8
23. http://www.arcipelagomilano.org/archives/19717
24. http://www.comune.milano.it/dseserver/webcity/comunicati.nsf/weball/A0A
A0A0FBBCC6902C1257A9C00530D04

ACKNOWLEDGMENTS
The authors wish to acknowledge MMC members’ support in providing
useful information to this contribution and in particular to thank Nanni
Anselmi, Cristina Jucker, Nicola Antonucci, Edoardo Ugolini, Grazia
Francolini, Giuliana Nuvoli, Titti Sperandeo, and Paolo Pozzi.
 Popular Reporting and Public Governance 27

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