media

Selected Readings on Crowdsourcing Funds

Curated on November 21, 2013November 9, 2018 by Andrew Young

The Living Library’s Selected Readings series seeks to build a knowledge base on innovative approaches for improving the effectiveness and legitimacy of governance. This curated and annotated collection of recommended works on the topic of crowdsourcing was originally published in 2013.

Crowdsourcing funds, or crowdfunding, is an emerging method for raising money that allows a wide pool of people to make small investments, gain access to ideas and projects they feel personally connected to, and spur growth in small businesses and social ventures. Popular crowdfunding platforms like Kickstarter and Indiegogo helped bring the practice into the public consciousness. Now, civic crowdfunding platforms like Citizinvestor and Spacehive are helping to apply this innovative funding model already in use for helping to fund artists, charities and inventors to help address public concerns traditionally considered under government’s purview.

Crowdfunding has also received recent attention from policymakers in the US through the US Securities JOBS Act, which provides an exemption from the registration requirements for offerings of securities by a company made through an SEC registered Crowdfunding Platform.

Selected Reading List (in alphabetical order)

Tanja Aitamurto — The Impact of Crowdfunding on Journalism — an article exploring crowdfunding in journalism, particularly related to reporting for the benefit of the public good.
Peter Baeck and Liam Collins — Working the Crowd: A Short Guide to Crowdfunding and How It Can Work for You — a general overview of crowdfunding models and the technological advances that make them possible.
Jason Best, Sherwood Neiss and Davis Jones — How Crowdfund Investing Helps Solve Three Pressing Socioeconomic Challenges — a paper describing the various public benefits of the rise of crowdfunding.
Kristof De Buysere, Oliver Gajda, Ronald Kleverlaan, Dan Marom and Matthias Klaes — A Framework for European Crowdfunding — an exploration of the crowdfunding ecosystem in Europe with an eye toward developing strategic crowdfunding policy frameworks for the continent.
Matthew Hollow — Crowdfunding and Civic Society in Europe: A Profitable Partnership? — a paper on crowdfunding’s effects on civil society in Europe.
Ethan R. Mollick — The Dynamics of Crowdfunding: An Exploratory Study — an overview of the varied dynamics of success and failure in crowdfunding initiatives.
Abbey R. Stemler — The JOBS Act and Crowdfunding: Harnessing the Power—and Money—of the Masses — a discussion of the JOBS Act’s effects on the public, including changing the relationship between businesses and the government.

Annotated Selected Reading List (in alphabetical order)

Aitamurto, Tanja. “The Impact of Crowdfunding on Journalism.” Journalism Practice 5, no. 4 (2011): 429–445. http://bit.ly/1bk4wNI.

This article analyzes the impact of crowdfunding on journalism, where, “readers’ donations accumulate into judgments about the issues that need to be covered.”

Aitamurto’s central findings inspire optimism regarding the potential of crowdfunding for the public good. She finds that, “From the donor’s perspective, donating does not create a strong relationship from donor to journalist or to the story to which they contributed;” rather, “[t]he primary motivation for donating is to contribute to the common good and social change.”

Baeck, Peter and Liam Collins. Working the Crowd: A Short Guide to Crowdfunding and How It Can Work for You. Nesta, May 2013. http://bit.ly/Hkl3rx.

This report “aims to give a quick overview of crowdfunding, the different versions of the model and how they work.”

The authors list four technological innovations that have contributed to the growth of modern crowdfunding:
- An online place for pitches
- Moving your money with a click
- The social engine
- Fueling campaigns with algorithms

Baeck and Collins consider public and social projects to be one of the areas where crowdfunding can have a significant impact. They argue that civic crowdfunding “has the potential to disrupt how money for charitable causes is sourced and how public services and spaces are used and paid for.”

Best, Jason, Sherwood Neiss and Davis Jones. “How Crowdfund Investing Helps Solve Three Pressing Socioeconomic Challenges.” Crowdfunding PR, Social Media & Marketing Campaigns. http://bit.ly/1aaTGwQ.

This paper outlines the forces driving the widespread use of crowdfund investing, namely social media, the existence of funding systems that marginalize people outside of major urban centers and the ability of people to function remotely from their work spaces.

The authors also discuss a number of public-facing benefits of crowdfund investing:
- Crowdfund Investing Creates Jobs
- Bringing capital in off the sidelines for use by small businesses
- Funding entrepreneurs everywhere
- Capital no longer for the chosen few
- Crowdfund Investing Grows GDP
- Reduction in the failure rate of small businesses
- Crowd monitoring reduces agency costs

De Buysere, Kristof, Oliver Gajda, Ronald Kleverlaan, Dan Marom, and Matthias Klaes. A Framework for European Crowdfunding, 2012. http://bit.ly/1aaTFsE.

This paper seeks to provide a “concise overview of the state of crowdfunding in Europe, with the aim of establishing policy and a distinct framework for the European crowdfunding industry,” which the authors believe, “will aid in the economic recovery of Europe.”

The authors, in their advocacy for greater crowdfunding opportunities for businesses in Europe, provide a rationale for the practice that also helps demonstrate the potential benefits of greater crowdfunding opportunities within government. They argue that, “Crowdfunding can offer unique support for budding and existing entrepreneurs on multiple levels. No other investment form, be it debt or equity, can provide the benefits of pre-sales, market research, word-of-mouth promotion, and crowd wisdom without additional cost.”

Hollow, Matthew. “Crowdfunding and Civic Society in Europe: A Profitable Partnership?” Open Citizenship 4, no. 1 (May 20, 2013). http://bit.ly/1cgzefL.

In this paper, Hollow explores the rise of crowdfunding platforms (CFPs), particularly related to civil society. He notes that, “[f]or civil society activists and others concerned with local welfare issues, the emergence of these new CFPs has been hugely significant: It has opened up a new source of funding when governments and businesses around the world are cutting back on their spending.”

Hollow argues that, “aside from their evident financial and economic benefits, CFPs also have the capacity to help foster and strengthen non-parliamentary democratic structures and practices. As such, they should be supported and encouraged as part of a framework of further European democratization and civic integration.”

Mollick, Ethan R. “The Dynamics of Crowdfunding: An Exploratory Study.” Journal of Business Venturing (June 26, 2013). http://bit.ly/1aaTJIV.

This paper “offers a description of the underlying dynamics of success and failure among crowdfunded ventures,” focusing on how personal networks and the project quality and viability have an impact on the success of crowdfunding efforts.

Mollick also highlights how other factors, like the geography of the project, design choices made by crowdfunding sites and developments in technology in this space all have an influence on the relationship between backers and project founders.

The paper finally demonstrates that projects that succeed do so by a small margin and those that fail seemingly by a large margin suggesting the influence of social bias and crowd influence.

Stemler, Abbey R. “The JOBS Act and Crowdfunding: Harnessing the Power—and Money—of the Masses.” Business Horizons 56, no. 3 (May 2013): 271–275. http://bit.ly/1ih9lts.

This paper discusses the Jumpstart Our Business Startups (JOBS) Act signed into law by President Obama in 2012, with a specific focus on the CROWDFUND Act, which enables entrepreneurs and small business owners to sell limited equity in their companies to a “crowd” of investors.

The objective of the Act is to exempt crowdfunding from registration requirement costs, allowing the potential of equity-based funding to be realized, by creating a pathway for underfunded entrepreneurs to access otherwise inaccessible streams of funding.
Stemler argues that the Act helps to legitimize crowdfunding as a community-building and fundraising tool for the business community, and also helps build better relationships between small business owners and government.

Healthcare.gov and the Gulf Between Planning and Reality

Curated on November 20, 2013August 3, 2018 by Stefaan Verhulst

Clay Shirky: “This is not just a hiring problem, or a procurement problem. This is a management problem, and a cultural problem. The preferred method for implementing large technology projects in Washington is to write the plans up front, break them into increasingly detailed specifications, then build what the specifications call for. It’s often called the waterfall method, because on a timeline the project cascades from planning, at the top left of the chart, down to implementation, on the bottom right.
Like all organizational models, waterfall is mainly a theory of collaboration. By putting the most serious planning at the beginning, with subsequent work derived from the plan, the waterfall method amounts to a pledge by all parties not to learn anything while doing the actual work. Instead, waterfall insists that the participants will understand best how things should work before accumulating any real-world experience, and that planners will always know more than workers.
This is a perfect fit for a culture that communicates in the deontic language of legislation. It is also a dreadful way to make new technology. If there is no room for learning by doing, early mistakes will resist correction. If the people with real technical knowledge can’t deliver bad news up the chain, potential failures get embedded rather than uprooted as the work goes on….
Given examples of technological success from commercial firms, a common response is that the government has special constraints, and thus cannot develop projects piecemeal, test with citizens, or learn from its mistakes in public. I was up at the Kennedy School a month after the launch, talking about technical leadership and Healthcare.gov, when one of the audience members made just this point, proposing that the difficult launch was unavoidable, because the government simply couldn’t have tested bits of the project over time.
That observation illustrates the gulf between planning and reality in political circles. It is hard for policy people to imagine that Healthcare.gov could have had a phased rollout, even while it is having one.
At launch, on October 1, only a tiny fraction of potential users could actually try the service. They generated concrete errors. Those errors were handed to a team whose job was to improve the site, already public but only partially working. The resulting improvements are incremental, and put in place over a period of months. That is a phased rollout, just one conducted in the worst possible way.
The vision of “technology” as something you can buy according to a plan, then have delivered as if it were coming off a truck, flatters and relieves managers who have no idea and no interest in how this stuff works, but it’s also a breeding ground for disaster. The mismatch between technical competence and executive authority is at least as bad in government now as it was in media companies in the 1990s, but with much more at stake…
Now, and from now on, government will interact with its citizens via the internet, in increasingly important ways. This is a non-partisan issue; whichever party is in the White House will build and launch new forms of public service online. Unfortunately for us, the last new technology the government adopted for interacting with citizens was the fax; our senior political figures have little habit of talking to their own technically adept employees.
If I had to design a litmus test for whether our political class grasps the internet, I would look for just one signal: Can anyone with authority over a new project articulate the tradeoff between features, quality, and time?
When a project cannot meet all three goals—a situation Healthcare.gov was clearly in by March—something will give. If you want certain features at a certain level of quality, you’d better be able to move the deadline. If you want overall quality by a certain deadline, you’d better be able to delay or drop features. And if you have a fixed feature list and deadline, quality will suffer.
Intoning “Failure is not an option” will be at best useless, and at worst harmful. There is no “Suddenly Go Faster” button, no way you can throw in money or additional developers as a late-stage accelerant; money is not directly tradable for either quality or speed, and adding more programmers to a late project makes it later. You can slip deadlines, reduce features, or, as a last resort, just launch and see what breaks.
Denying this tradeoff doesn’t prevent it from happening. If no one with authority over the project understands that, the tradeoff is likely to mean sacrificing quality by default. That just happened to this administration’s signature policy goal. It will happen again, as long politicians can be allowed to imagine that if you just plan hard enough, you can ignore reality. It will happen again, as long as department heads imagine that complex technology can be procured like pencils. It will happen again as long as management regards listening to the people who understand the technology as a distasteful act.”

Why We Engage: How Theories of Human Behavior Contribute to Our Understanding of Civic Engagement in a Digital Era

Curated on November 19, 2013August 3, 2018 by Stefaan Verhulst

New paper by Gordon, Eric and Baldwin-Philippi, Jessica and Balestra, Martina: “…Just as the rapidly evolving landscape of connectivity and communications technology is transforming the individual’s experience of the social sphere, what it means to participate in civic life is also changing, both in how people do it and how it is measured. Civic engagement includes all the ways in which individuals attend to the concerns of public life, how one learns about and participates in all of the issues and contexts beyond one’s immediate private or intimate sphere. New technologies and corresponding social practices, from social media to mobile reporting, are providing different ways to record, share, and amplify that attentiveness. Media objects or tools that impact civic life can be understood within two broad types: those designed specifically with the purpose of community engagement in mind (for instance, a digital game for local planning or an app to give feedback to city council) or generic tools that are subsequently appropriated for engaging a community (such as Twitter or Facebook’s role in the Arab Spring or London riots). Moreover, these tools can mediate any number of relationships between or among citizens, local organizations, or government institutions. Digitally mediated civic engagement runs the gamut of phenomena from organizing physical protests using social media (e.g., Occupy), to using digital tools to hack institutions (e.g., Anonymous), to using city-produced mobile applications to access and coproduce government services, to using digital platforms for deliberating. Rather than try to identify what civic media tools look like in the midst of such an array of possibilities (by focusing on in depth examples or case studies), going forward we will instead focus on how digital tools expand the context of civic life and motivations for engagement, and what participating in civic life looks like in a digital era.
We present this literature review as a means of exploring the intersection of theories of human behavior with the motivations for and benefits of engaging in civic life. We bring together literature from behavioral economics, sociology, psychology and communication studies to reveal how civic actors, institutions, and decision-making processes have been traditionally understood, and how emerging media tools and practices are forcing their reconsideration.“

Transparency in Politics and the Media: Accountability and Open Government

Curated on November 13, 2013August 15, 2018 by Stefaan Verhulst

New report from The Reuters Institute for the Study of Journalism by Nigel Bowles, James T. Hamilton, and David A. L. Levy: “Increasingly governments around the world are experimenting with initiatives in transparency or ‘open government’.
These involve a variety of measures including the announcement of more user-friendly government websites, greater access to government data, the extension of freedom of information legislation and broader attempts to involve the public in government decision making.
However, the role of the media in these initiatives has not hitherto been examined. This new RISJ edited volume analyses the challenges and opportunities presented to journalists as they attempt to hold governments accountable in an era of professed transparency.
In examining how transparency and open government initiatives have affected the accountability role of the press in the US and the UK, it also explores how policies in these two countries could change in the future to help journalists hold governments more accountable.
This volume will be essential reading for all practising journalists, for students of journalism or politics, and for policymakers. This publication can be bought from I. B. Tauris
Download the Executive Summary and First Chapter”

Selected Readings on Crowdsourcing Opinions and Ideas

Curated on November 7, 2013December 13, 2018 by Andrew Young

As technological advances give individuals greater ability to share their opinions and ideas with the world, citizens are increasingly expecting government to consult with them and factor their input into the policy-making process. Moving away from the representative democracy system created in a less connected time, e-petitions; participatory budgeting (PB), a collaborative, community-based system for budget allocation; open innovation initiatives; and Liquid Democracy, a hybrid of direct and indirect democracy, are allowing citizens to make their voices heard between trips to the ballot box.

Selected Reading List (in alphabetical order)

Eirikur Bergmann — Reconstituting Iceland — Constitutional Reform Caught in a New Critical Order in the Wake of Crisis — a paper exploring the history and of Iceland’s “Crowdsourced Constitution.”
Oliver Gassmann, Ellen Enkel and Henry Chesbrough — The Future of Open Innovation — a paper discussing opportunities and trends related to open innovation.
Hollie Russon Gilman — The Participatory Turn: Participatory Budgeting Comes to America — a dissertation focused on both the recent history of international PB efforts and the largely untapped potential for PB in the United States.
Alexa Kasdan and Lindsay Cattell — New Report on NYC Participatory Budgeting — a research and evaluation report on the 2011 PB process undertaken in New York City.
Kai Masser — Participatory Budgeting as Its Critics See It — a critical look at PB drawing on lessons learned from a German pilot initiative.
OECD — Citizens as Partners: Information, Consultation and Public Participation in Policy-making — this policy report examines the use of crowdsourcing in OECD countries to act as a new form of representation and participation.
Angel Tchorbadjiiski — Liquid Democracy — a thesis on the potential benefits of and challenges to the wider use of Liquid Democracy.

Annotated Selected Reading List (in alphabetical order)

Bergmann, Eirikur. “Reconstituting Iceland – Constitutional Reform Caught in a New Critical Order in the Wake of Crisis.” in Academia.edu, (presented at the Political Legitimacy and the Paradox of Regulation, Leiden University, 2013). http://bit.ly/1aaTVYP.

This paper explores the tumultuous history of Iceland’s “Crowdsourced Constitution.” The since-abandoned document was built upon three principles: distribution of power, transparency and responsibility.

Even prior to the draft being dismantled through political processes, Bergmann argues that an overenthusiastic public viewed the constitution as a stronger example of citizen participation than it really was: “Perhaps with the delusion of distance the international media was branding the production as the world’s first ‘crowdsourced’ constitution, drafted by the interested public in clear view for the world to follow…This was however never a realistic description of the drafting. Despite this extraordinary open access, the Council was not able to systematically plough through all the extensive input as [it] only had four months to complete the task.”

Bergmann’s paper illustrates the transition Iceland’s constitution has undertaken in recent years: moving form a paradigmatic example of crowdsourcing opinions to a demonstration of the challenges inherent in bringing more voices into a realm dominated by bureaucracy and political concerns.

Gassmann, Oliver, Ellen Enkel, and Henry Chesbrough. “The Future of Open Innovation.” R&D Management 40, no. 3 (2010): 213– 221. http://bit.ly/1bk4YeN.

In this paper – an introduction to a special issue on the topic – Gassmann, Enkel and Chesbrough discuss the evolving trends in open innovation. They define the concept, referencing previous work by Chesbrough et al., as “…the purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.”

In addition to examining the existing literature for the field, the authors identify nine trends that they believe will define the future of open innovation for businesses, many of which can also be applied to governing insitutions:
- Industry penetration: from pioneers to mainstream
- R&D intensity: from high to low tech
- Size: from large firms to SMEs
- Processes: from stage gate to probe-and-learn
- Structure: from standalone to alliances
- Universities: from ivory towers to knowledge brokers Processes: from amateurs to professionals
- Content: from products to services
- Intellectual property: from protection to a tradable good

Gilman, Hollie Russon. “The Participatory Turn: Participatory Budgeting Comes to America.” Harvard University, 2012. https://bit.ly/2BhaeVv.

In this dissertation, Gilman argues that participatory budgeting (PB) produces better outcomes than the status quo budget process in New York, while also transforming how those who participate understand themselves as citizens, constituents, Council members, civil society leaders and community stakeholders.

The dissertation also highlights challenges to participation drawing from experience and lessons learned from PB’s inception in Porto Alege, Brazil in 1989. While recognizing a diversity of challenges, Gilman ultimately argues that, “PB provides a viable and informative democratic innovation for strengthening civic engagement within the United States that can be streamlined and adopted to scale.”

Kasdan, Alexa, and Cattell, Lindsay. “New Report on NYC Participatory Budgeting.” Practical Visionaries. Accessed October 21, 2013. https://bit.ly/2Ek8bTu.

This research and evaluation report is the result of surveys, in-depth interviews and observations collected at key points during the 2011 participatory budgeting (PB) process in New York City, in which “[o]ver 2,000 community members were the ones to propose capital project ideas in neighborhood assemblies and town hall meetings.”

The PBNYC project progressed through six main steps:
- First Round of Neighborhood Assemblies
- Delegate Orientations
- Delegate Meetings
- Second Round of Neighborhood Assemblies
- Voting
- Evaluation, Implementation & Monitoring

The authors also discuss the varied roles and responsibilities for the divers stakeholders involved in the process:
- Community Stakeholders
- Budget Delegates
- District Committees
- City-wide Steering Committee Council Member Offices

Masser, Kai. “Participatory Budgeting as Its Critics See It.” Burgerhaushalt, April 30, 2013. http://bit.ly/1dppSxW.

This report is a critique of the participatory budgeting (PB) process, focusing on lessons learned from the outcomes of a pilot initiative in Germany.

The reports focuses on three main criticisms leveled against PB:
- Participatory Budgeting can be a time consuming process that is barely comprehensive to the people it seeks to engage, as a result there is need for information about the budget, and a strong willingness to participate in preparing it.
- Differences in the social structure of the participants inevitably affect the outcome – the process must be designed to avoid low participation or over-representation of one group.
- PB cannot be sustained over a prolonged period and should therefore focus on one aspect of the budgeting process. The article points to outcomes that show that citizens may find it considerably more attractive to make proposals on how to spend money than on how to save it, which may not always result in the best outcomes.

OECD. “Citizens as Partners: Information, Consultation and Public Participation in Policy-making.” The IT Law Wiki. http://bit.ly/1aIGquc.

This OECD policy report features discussion on the concept of crowdsourcing as a new form or representation and public participation in OECD countries, with the understanding that it creates avenues for citizens to participate in public policy-making within the overall framework of representative democracy.

The report provides a wealth of comparative information on measures adopted in OECD countries to strengthen citizens’ access to information, to enhance consultation and encourage their active participation in policy-making.

Tchorbadjiiski, Angel. “Liquid Democracy.” Rheinisch-Westf alische Technische Hochschule Aachen Informatik 4 ComSy, 2012. http://bit.ly/1eOsbIH.

This thesis presents discusses how Liquid Democracy (LD) makes it for citizens participating in an election to “either take part directly or delegate [their] own voting rights to a representative/expert. This way the voters are not limited to taking one decision for legislative period as opposed to indirect (representative) democracy, but are able to actively and continuously take part in the decision-making process.”

Tchorbadjiiski argues that, “LD provides great flexibility. You do not have to decide yourself on the program of a political party, which only suits some aspects of your opinion.” Through LD, “all voters can choose between direct and indirect democracy creating a hybrid government form suiting their own views.”
In addition to describing the potential benefits of Liquid Democracy, Tchorbadjiiski focuses on the challenge of maintaining privacy and security in such a system. He proposes a platform that “allows for secure and anonymous voting in such a way that it is not possible, even for the system operator, to find out the identity of a voter or to prevent certain voters (for example minority groups) from casting a ballot.”