Practical knowledge is Fung's term for the form of expertise that affected populations possess about their own conditions — knowledge grounded in direct experience and refined through continuous engagement, distinct from the analytical knowledge that external experts can provide. The customer service representative who interacts with a biased AI system possesses knowledge about how the bias manifests in practice that statistical analysis cannot capture. The displaced worker possesses knowledge about the specific experience of displacement that no economic model represents. The teacher observing students' engagement with AI writing tools possesses knowledge about educational implications that no policymaker can replicate. This practical knowledge is not anecdotal — it is expertise in Aristotle's sense of phronesis, and participatory governance processes are designed specifically to access it.
The concept operates as the mechanism that explains why participatory governance produces outcomes superior to expert-only governance. Experts possess technical knowledge that affected populations lack; affected populations possess practical knowledge that experts lack. The combination produces governance outcomes that neither form of knowledge could generate alone. This is the complementarity thesis that grounds the case for empowered participatory governance.
The Chicago beat meetings illustrate the mechanism in a specific context. Residents possessed knowledge about neighborhood dynamics — which corners were dangerous at which hours, which buildings harbored persistent problems — that no external analysis could replicate. Officers possessed tactical expertise residents lacked. The combination produced plans neither could have developed alone. Practical knowledge was not supplementary to expert analysis; it was constitutive of the governance capacity required to produce the documented outcomes.
Application to AI governance shows the same pattern. The WeBuildAI project demonstrated that community stakeholders deliberating on algorithmic policy produced outcomes reflecting considerations expert-only governance had systematically neglected. The participants were not algorithm designers. They were community members affected by algorithmic decisions, and their practical knowledge of those decisions' lived consequences was essential to the governance outcomes they produced.
The exclusion of practical knowledge from AI governance is not merely unjust — it is inefficient. Governance decisions that lack this knowledge produce worse outcomes than they would with it, on every criterion relevant to assessing governance quality. The case for participatory governance is therefore not primarily egalitarian (though it has egalitarian implications) but epistemic: governance that accesses practical knowledge produces better outcomes than governance that does not.
The concept has deep roots in Aristotelian ethics (phronesis as practical wisdom distinct from theoretical knowledge) and in twentieth-century philosophy of knowledge (particularly Michael Polanyi's Personal Knowledge). Fung's contribution was integrating these philosophical traditions with empirical political science in a form that could specify the institutional conditions under which practical knowledge becomes accessible to governance processes.
The 1980s development of participatory action research by Orlando Fals Borda and others provided methodological foundation for accessing practical knowledge in community contexts. Fung's framework draws on this tradition while extending its claims from research methodology to governance design.
Practical knowledge is expertise, not anecdote. The knowledge affected populations possess about their own conditions is expertise in Aristotle's sense — phronesis grounded in direct experience.
Complementarity produces superior outcomes. Expert and practical knowledge combined produce governance outcomes neither form alone could generate.
Exclusion of practical knowledge is inefficient. Governance that lacks this knowledge produces worse outcomes on every criterion relevant to governance quality.
Institutional conditions determine access. Practical knowledge becomes governance-relevant only through institutional mechanisms designed to access it — the empowered participatory governance framework specifies those conditions.