Racial Equity in Public Budgeting: An Analysis of Three Pioneer Cases

Introduction

While it is agreed that the field of public administration has a role in taking action to tackle inequities (Blessett et al., 2019; Frederickson, 1971; Gooden, 2015b; McCandless et al., 2022), the overall focus of its scholarship, teaching, and practice has not been on equity (Blessett et al., 2019; Gooden, 2015a; Martínez Guzmán et al., 2024). The lack of attention to equity may be considered more pronounced when addressing racial inequities, an area where public administration systems have even contributed to inequitable outcomes (Martínez Guzmán et al., 2024; McCandless & Blessett, 2022; Moloney & Lewis, 2023).

Some events at the start of the current decade –including the murder of George Floyd and a global wave of protests- raised the urgency for public administrators to address lingering racial inequities (Zavattaro & Bearfield, 2022). As the sense of urgency to deal with contemporary racial inequities has become more evident, the availability of relevant public administration scholarship has also increased. Some recent examples include studies on the importance of gender and race intersectionality to address sexual harassment in the military (Breslin et al., 2022), the role of organizational socialization on the teacher's representational effect on students outcomes (Jung & Ronquillo, 2020), the racially diverse impact of urban renewal rehabilitation projects (Blessett, 2020), the role that race and ethnicity play in the access to public services (Cheng et al., 2022), among others.

This increase in scholarship that deals with racial equity has not yet flourished within one of the most sweeping public administration systems: the public budgeting cycle (Gooden, 2015a; Grossi et al., 2023). Until recently, gender-responsive budgeting (GRB) remained the only budgeting system that approached equity within a specific demographic (Rubin & Bartle, 2023a). In one of the first explorations of racial equity within public budgeting, McShea et al. (2022) discuss how principles used to analyze performance budgeting can be adapted to consider racial equity. More recently, McDonald and McCandless (2023) produced an exploration of some local governments in the United States that are starting to introduce racial equity in their budgetary decisions. Finally, Martínez Guzmán et al. (2024) used critical race theory to develop a racial equity budgeting framework to introduce racial equity throughout all stages of public budgeting processes.

In this article, we expand this nascent literature by providing the first in-depth scholarly analysis of budgetary reforms aimed at enhancing racial equity. We selected three case studies from local governments in the United States that advanced their reforms for several years: King County, WA, and the cities of Austin, TX, and Baltimore, MD. For each case study, we answer three research questions that are based on the racial equity budgeting framework proposed by Martínez Guzmán et al. (2024). The three questions include: Are governments taking measures to correct racial biases in past policies? Are governments enhancing the voice of non-dominant, intersectional groups? Are governments analyzing and mitigating potential racial biases in existing (baseline) and new policies?

Our findings show that these local governments have been modestly successful in introducing mechanisms that add an equity perspective to budgetary analysis and that open community participation for underserved populations. These advances, while anchored in legislation, remain fragile to changes in leadership and unfavorable political contexts. In upcoming years, even pioneer governments will continue to face challenges to ensure that they do not fall backward in their equity reforms and to add missing components, such as taking budgetary actions to correct racial biases from past policies.

Public Budgeting and Racial Equity

Public budgeting is an overarching, institutional process that directly affects all programs and policy areas, making it an appropriate mechanism for intentionally incorporating equity into an organization (Martínez Guzmán et al., 2024; McShea et al., 2022; Rubin & Bartle, 2023a). Early attempts to operationalize equity considerations in public budgeting have not explicitly focused on questions of racial or gender equity. The concept of “performance-informed budgeting” (Joyce, 2003) focuses on the aggregate level rather than on specific populations. Similarly, techniques like cost-benefit analysis (Cellini & Kee, 2015) strive to promote efficient resource allocation but often fail to address the distribution of resources across different subgroups. Finally, reforms in education finance (Duncombe & Yinger, 1998) aim to reduce income inequalities, and not explicitly focusing on racial or other demographic considerations.

Without a specific focus on race or any other subgroup, public budgeting scholarship has seen public participation as an avenue toward increasing equity (McDonald & McCandless, 2023). The view that participatory budgeting can be a driver for equity rests on the assumption that minorities and underserved populations will be able to raise their concerns and convince policymakers that funding is warranted to address their needs. Nevertheless, participatory budgeting scholarship has predominantly concentrated on outcomes such as enhanced transparency and accountability without much focus on social and racial equity (No & Hsueh, 2022). Furthermore, besides limited exceptions -such as, but not limited to, Kuenneke and Scutelnicu's (2021) examination of participatory budgeting in New York City from a perspective of racial equity and McNulty's (2015) analysis of participatory budgeting in Peru from a gender lens- most studies that analyze equity in participatory budgeting do so exclusively from the viewpoint of income inequality, and not from the lens of race or gender.

GRB is considered a pioneer in pushing for equity considerations to have an explicit role in public budgeting decisions. GRB recognizes that budgets are often not neutral and, specifically, not gender neutral. In addition, GRB reforms are not only concerned with aggregate measures of equity or inequalities, but instead, its “emergence in the early 1980s in countries around the world signaled recognition that government budgets could be used to advance equity for a particular demographic subgroup” (Rubin & Bartle 2023a, p. 22). In recent years, a growing scholarship has shown that GRB has expanded to over 80 governments around the world, and in some cases, it has resulted in policy changes that make budget decisions more equitable (Martínez Guzmán, 2024; Rubin & Bartle, 2023b).

Within the past year, public budgeting scholarship has moved beyond gender equity and towards racial inequities. McShea et al. (2022, p. 4) suggest that “the argument for adopting a more racially sensitive perspective in public budgeting parallels that for gender-based budgeting.” The authors make the case that the literature has not yet produced a framework equivalent to that of GRB to analyze racial equity in budgeting. They advance the field by proposing a racial-equity lens to a set of principles that were originally developed to evaluate performance management systems. They also provide an aggregate view of some local governments in the United States that have started to promote racial equity in their budgeting systems. From these incipient reforms, the authors find that some governments have tried to analyze racial equity in budget decisions through a set of equity goals that apply to the entire jurisdiction.

Similarly, McDonald and McCandless (2023) take an exploratory analysis of how local governments in the United States are starting to apply a racial equity perspective to budgetary decisions. Their analysis identifies three main themes. First, they highlight leadership from community organizations and elected officials as the key enablers for jurisdictions that have initiated reforms. Second, they list some institutional factors -including the establishment of a driving agency and buy-in from civil servants, among others - as critical for success. And third, the authors explain that many governments struggle to find appropriate ways to measure equity. McDonald and McCandless (2023) conclude with a list of aspects that could be implemented within the traditional public budgeting cycle to facilitate the integration of racial equity.

Both McShea et al. (2022) and McDonald and McCandless (2023) present an aggregate view of local government's experiences and argue that the public budgeting scholarship needs a framework to incorporate racial equity into decision-making processes. This gap was arguably addressed by Martínez Guzmán et al. (2024), who take a comprehensive approach to incorporate equity into every step of the public budgeting cycle by developing a budget framework that is informed by critical race theory. For each phase of the budget cycle, they provide a three-pronged series of recommendations and examples that address three key tenets of critical race theory: (1) acknowledge and address past discriminatory practices, (2) center the voices of the marginalized, and (3) disrupt the status quo with intentionally equitable practices. In this article, we build from that framework to produce an in-depth qualitative empirical analysis.

Methods

This paper analyzes case studies of local governments in the United States. Our analysis is mostly inductive, as we conduct three in-depth case study analyses that enhance understanding by observing internal processes (Nowell & Albrecht, 2019). We strengthen our observation of internal processes by using a replicable framework built from the available literature that can be applied to similar case studies (Yin, 2009). Through this approach, we aim to answer the following questions concerning these three local governments:

Are they taking measures to correct racial biases in past policies?

The examination of each case study was built around a research framework informed by the available literature (see Table 1). The framework disaggregates our three research questions into operational factors that measure if a racial-equity perspective is used in policymaking. These factors, which are the ones that will most directly respond to our research questions, are based on the racial equity budgeting framework developed by Martínez Guzmán et al. (2024) to introduce racial equity throughout all stages of public budgeting processes. The other variables included in our framework are a list of public administration mechanisms that previous literature has shown to be important in understanding why budgetary reforms succeed or fail. The list of mechanisms is based on a literature review conducted for an in-depth analysis of GRB, which groups the main mechanisms into five categories: leadership support, the capacity of civil servants, formal and informal rules, systems and resources, and contextual factors. ¹ The inclusion of these explanatory variables allows us to provide a more meaningful analysis of what has happened in each case and make this a replicable framework.

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Table 1.

Research Framework.

Influence of Racial-Equity Perspective

Public Administration Mechanisms

Correcting for racial biases in past policies Quantifying the past negative effects of discrimination to inform potential redresses Taking administrative actions to correct for biases in hiring and other processes Evaluating the results from restorative efforts Enhancing the voice of nondominant, intersectional groups Soliciting input from nondominant and intersectionally diverse groups Using input from those groups to allocate resources, design policies, and monitor progress Mitigating potential racial biases in existing and new policies Enhancing data requests during budget formulation and approval Including equity in performance information systems Analyze the distributional effects of existing and new policies

Leadership support Building support Overcoming resistance Institutionalizing change The capacity of the civil servant Civil servant's capacity to analyze data Buy-in and biases from civil servants Training and capacity development Formal & informal rules Budgetary process rigidities Budgetary roles and responsibilities Budgetary structure and classifications Systems & resources Resources for reform implementation Information management systems Guidelines and methodologies Contextual factors Legal and strategic framework The economic and political context

Note: adapted from Martínez Guzmán et al. (2024) and Martínez Guzmán (2024).

Our case selection focused on the relevance and availability of information. In terms of relevance, we conducted an initial exploration of governments that have implemented and institutionalized budgetary reforms aimed at promoting racial equity. The initial exploration was informed by a review of public reports, conversations with practitioners, and the list of governments that have worked with the Government Alliance on Race and Equity (GARE), as listed on their website, to promote racial justice through more inclusive policymaking (GARE n.d.). We developed a short list of relevant cases by selecting those for which we found preliminary evidence that they worked significantly to introduce racial equity considerations into budgeting discussions. ² Finally, from the shortlist, we selected those cases that presented an information-rich environment while trying to choose governments from different geographic regions of the country. Our final selection includes the governments of Austin, TX, Baltimore, MD, and King County, WA.

Data for each case was collected between January 2022 and March 2023, and the information we provide in this study represents the situation during that period. The first few months of this process focused on collecting and analyzing public documentation, such as budgets, strategic plans, official reports, and legal frameworks. A total of 24 in-depth interviews were conducted between March 2022 and May 2023. In total, there were nine interviews for the case of Austin, nine for Baltimore, and six for King County. All cases include a mix of interviewees from inward-facing departments that regulate or provide services to other departments (a total of 11 interviewees, including budget, equity, auditing, sustainability, and planning departments) and executing departments that provide services directly to society (total of 13 interviewees, the departments are detailed in the analysis of each case). All interviews followed a semi-structured conversational protocol informed by our research framework, and all of them adhered to the processes mandated by the Institutional Review Board. One interview was conducted via phone, and all the remaining interviews were conducted via videoconference. Initial interviewees were contacted through publicly available contact information and/or through referrals made directly to the authors. Subsequent interviewees were recruited using snowball sampling. The focus of the snowball sampling was twofold: getting interviewees from key regulatory institutions -such as central budget offices- and from individual departments where reforms have been implemented.

The main limitation of our approach is that, as a limited set of case studies, we cannot draw inferences about other jurisdictions. Our sampling is neither random nor representative of other local governments in the United States, therefore, we suggest caution when making inferences. Finally, while we cover a comprehensive list of factors based on the available literature, we acknowledge that there might be relevant unobserved factors that could have helped explain the phenomena we observe.

Findings

Discussion

The findings of this paper support some critical aspects of the nascent literature on the use of a racial equity perspective on budgetary decisions. The case studies of Austin, Baltimore, and King County reinforce the findings from McDonald and McCandless (2023) that local governments in the United States that are starting to apply a racial equity perspective to budgetary decisions are doing so by relying on the support of public administrators, community organizations, and elected officials. However, our study provides a more dissected view of the roles of those three groups. Our findings suggest that political leaders are not often involved in the everyday push to operationalize racial equity but that, instead, the most successful efforts often come from decentralized initiatives that involve departmental leaders, civil servants, and community leaders. This does not mean that centralized reforms are unimportant, as they catalyze the appearance of decentralized ones. The lesson for practitioners is that reforms need to encourage innovation and transformation at the departmental level.

Our findings also show that local governments are not taking a holistic budgetary approach to racial equity. While Martínez Guzmán et al. (2024) propose that racial equity considerations need to be introduced in all stages of the budgetary cycle -preparation, approval, execution, and evaluation- case studies show that almost all efforts have been directed to budget formulation, leaving most reformers blind during the implementation and with minimal feedback for upcoming budgetary cycles. In the upcoming paragraphs, we argue that an incremental approach to racial equity reforms and the lack of institutionalization of operational capacities can explain this finding.

Our first research question asks if governments are taking measures to correct racial biases in past policies. Out of our three research areas, this is the one with the least progress (see Table 2 for a summary of how the three case studies fared in each of the three areas covered in our research questions). In all three cases, governments are offering clear acknowledgments of biases in their past policies. Austin's apologies for the 1928 Master Plan and King County's declaration of racism as a public health crisis are two strong examples. However, these declarations have seldom been followed by concrete budgetary reparations to address those biases financially. The most striking example comes from Baltimore, where five years after legally creating a fund that could address some of these past biases, the required resources have never been appropriated, and the fund remains unused.

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Table 2.

Summary of the Main Reforms for Each Research Area, Per Case Study.

	Austin, Texas	Baltimore, Maryland	King County, Washington
Correct racial biases in past policies	Official apology for the 1928 Master Plan and decades of discriminatory land, housing, and urban renewal policies.	Creation of an equity assistance fund to help reduce race, gender, and economic inequities. The fund has never been used.	Working to undo systems of oppression through “Best Starts for Kids” and making contracting practices more inclusive.
Enhance the voice of nondominant, intersectional groups	Requests for budget recommendations from non-dominant groups managed at the departmental level.	Planning academy to train community members for public engagement.	Development of strategic plans through participatory processes. Participatory budgeting fund for the BIPOC community.
Analyze and mitigate potential racial biases in existing (baseline) and new policies	Mandate for the equity assessment tool (self-assessment) to be used during the budget process. Mixed results across departments. Establishment of equity managers within departments. Creation of mini grants with equity focus.	Mandate for the equity assessment program (self-assessment) to be used to assess policies and budget. Establishment of equity coordinators within departments. Equity evaluation of capital projects.	Equity considerations included as standard component of budget analysis. Reporting of equity data, including disparities between communities of color and white communities on key performance measures.

Note: author's elaboration.

The political context has been an obstacle for corrective policies (see Table 3 for an overview of the impact of the key explanatory variables). In Austin, one interviewee suggested that terms like “reparations” must be avoided for political reasons. However, there are practical reasons that may better explain the lack of corrective action, even in cases where the political context might be favorable. In all cases, the introduction of racial equity considerations has stretched administrative capacities. Within a context of limited resources, public officials have focused on current and new policies to the detriment of correcting those from the past. This is well in line with the foundational theory of budget incrementalism, which suggests that high complexity and limited analytical capacity result in budgets being only marginally reviewed while keeping a larger component, known as the budget base, mostly unaltered (Wildavsky, 1964).

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Table 3.

Overview of the Impact of Public Administration Mechanisms.

PA Mechanism	Overview of Impact
Leadership Support	Leadership support was deemed critical for all case studies. In the cases of Baltimore and King County, leadership from senior officials helped push the reforms forward and increase overall buy-in. Interviewees from Austin and Baltimore argued that having leaders who know their communities has facilitated progress. The case of Austin also shows that high turnover in leadership positions and unengaged leaders can hinder growth.
The Capacity of the Civil Servant	Civil servant capacity was, together with leadership support, highlighted as a critical enabler for racial equity reforms. All the case studies show initiatives that explicitly aim to expand the capacity of the civil servant to analyze equity issues, including the establishment of centralized equity offices, coordination teams, and departmental equity managers, among others. Any limitations did not reside on current officials but in the need for additional full-time equivalent positions to help with burdensome processes and coordination.
Contextual Factors	Reformers who work for racial equity are very aware of how the broader political context might affect their efforts. The cases of Austin and Baltimore show that fears of legal or political backlash impact how they frame initiatives and the information they make public. A common characteristic of all three cases is that interviewees highlighted the importance of developing legal or strategic frameworks to ensure that reforms can survive when the context is unfavorable. This safeguard appears to be especially important for the case of Austin, which has a favorable political context at the local level but a more hostile one at the state level.
Formal & Informal Rules	The formal and informal rules did not represent either a significant obstacle or a facilitator for the implementation of equity-oriented reforms. Nevertheless, the cases of Baltimore and King County exemplify that racial equity can be embedded within existing budgetary processes by mandating an equity analysis as part of the existing processes. At the same time, the case of Baltimore has pending challenges due to a multitude of related processes that run in parallel without proper coordination. Overall, the three cases suggest that racial equity reforms can be made part of traditional budgetary rules and processes.
Systems & Resources	The introduction of racial equity reforms has been accompanied by the provision of basic resources for their implementation. This has included the creation of new positions and the establishment of new offices. The development of guidelines and methodologies was a common initial step in all cases and might have helped with the institutionalization of processes. With appropriate leadership, resources for additional full-time personnel could help expand the reach of equity assessments.

Note: author's elaboration.

All governments have introduced participatory mechanisms to enhance the voice of their communities. There is evidence suggesting that many of these efforts are very positive and have intentionally focused on diverse communities. Two examples are Austin's incorporation of the input and feedback of marginalized populations during the development of departmental self-assessments and King County's extensive participatory mechanisms to prepare the county's strategic plans. Finally, the planning academy in the City of Baltimore includes a particularly comprehensive approach as it provides a six-week training program so that community members can participate and engage more efficiently.

Despite these advancements in participatory mechanisms, there are critical aspects that remain unaddressed. First, none of the three jurisdictions systematically and routinely collect data on the demographics of those who are joining their participatory initiatives. There is space for a more intentional and targeted recruitment process to ensure that participants meet specific diversity targets. This finding reinforces the cautions expressed in other studies that participatory mechanisms can fail to enhance the voices of those who need it the most (Clark, 2018; Kuenneke & Scutelnicu, 2021). Second, even though most interviewees highlighted the importance of intersectionality, there are no specific strategies to ensure it is addressed. Third, as many of the participatory processes are decentralized through different departments, results and practices remain heterogeneous.

Regarding our third research question, the three governments showcase serious attempts to implement broad solutions that ensure that racial equity is analyzed as part of budgetary decisions. Most notably, King County has made equity considerations a component of its budgetary instructions, and Baltimore includes a strict equity analysis for their capital budget. Nonetheless, the three governments are struggling to maintain practices transparently and timely and to ensure that they run throughout the government. In all three case studies, governments have either stopped publishing some key data from their equity assessments that were previously available and/or are failing to meet their timelines. The disparities across departments are significant, with all jurisdictions, including departments ranging from pioneers in analyzing equity to departments that have barely taken any action.

The initiatives that enhance the voice of non-dominant groups and those that consider racial equity within budgetary processes have been affected by similar issues. Consistent with studies of GRB (Martínez Guzmán et al., 2024; Rubin & Bartle, 2023b), which also aims to introduce equity consideration into budgetary processes, a key factor uncovered by interviewees in all case studies is that appropriate leadership is a necessary condition for reforms to succeed. Our examination uncovers that the impact of leadership is not limited to central political and managerial positions but also leadership within departments.

Conclusion

This study presents the first in-depth scholarly analysis of budgetary reforms aimed at enhancing racial equity. Our in-depth analysis of three pioneer cases shows actual tangible progress that can serve as learning points for other jurisdictions. Informed by a framework based on key tenets from critical race theory, we find that governments are introducing equity analysis of programs and are opening channels to give a voice to underserved communities, but we also identify weaknesses that need to be addressed if governments want to achieve and sustain meaningful results.

First, our study delves into a nuanced exploration of the roles played by political leaders, departmental leaders, civil servants, and community leaders in the operationalization of racial equity. Contrary to common assumptions, our findings reveal that political leaders are not consistently at the forefront of the day-to-day efforts to implement racial equity initiatives. Instead, our research indicates that decentralized initiatives, engaging departmental leaders, civil servants, and community leaders, tend to yield the most successful outcomes. While centralized reforms are acknowledged as pivotal catalysts for change, our study underscores the importance of fostering innovation and transformation at the departmental level. This revelation holds a valuable lesson for practitioners, emphasizing the need for reforms that empower and encourage localized initiatives to drive sustained progress in achieving racial equity goals.

Second, our study emphasizes the crucial role of building organizational capacity when incorporating racial equity considerations. We observe that the integration of these considerations often strains administrative capacities, particularly within the context of limited resources. In this challenging environment, public officials tend to prioritize the development and implementation of current and new policies, while sidelining the correction of historical inequities. This pattern aligns with the foundational theory of budget incrementalism and stresses the necessity for strategic investments in capacity-building initiatives to ensure the sustained success of reforms aimed at achieving racial equity.

Overall, our findings show that these local governments have been moderately successful in introducing mechanisms that add an equity perspective to budgetary analysis and that open community participation for underserved populations. These advances, while anchored in legislation, remain fragile to changes in leadership and unfavorable political contexts. In upcoming years, even pioneer governments will continue to face challenges to ensure that they do not fall backward in their equity reforms and to add missing components, such as taking budgetary actions to correct racial biases from past policies.

The case studies we analyzed share some key similarities. First, they are all considered as urban areas, have population than ranges from 1.8 to 2.2 million individuals, and are ranked within the 30 most populous cities (for the cases of Austin and Baltimore) and within the 15 most populous counties (for the case of King County) in the United States (United States Census Bureau, 2024). Second, they are all predominantly Liberal localities, having only had mayors (county executive for the case of King County) that identify with the Democratic Party for at least the last 20 years. Scholars and practitioners should carefully consider how these findings may relate to other jurisdictions.

In moving forward, we recommend multiple lines of research that can build from and complement this study. First, future studies should complement our findings with research that covers other stages of the budgeting cycle, such as budget execution and budget evaluation. Second, scholars could analyze whether similar reforms have been implemented in other countries or in American jurisdictions that are not large, urban, and Liberal leaning. Finally, exploring the catalysts that bring reforms to the forefront, including the role of grassroots groups, could potentially yield advances to the public administration scholarship.