How Participatory Budgeting Can Improve Governance & Well-Being

By Brian Wampler, Michael Touchton, and Nikhil Kumar

This is the second in a series of short articles on the impacts of participatory budgeting cross-posted with the Deliberative Democracy Digest.

Understanding the impacts of participatory budgeting (PB) on governance and well-being has grown more urgent as an increasing number of governments and institutions around the world adopt PB. When designed well and implemented in favorable contexts, PB has a track record of improving local governance and, ultimately, community well-being. PB directs resources to community priorities, redistributes public funds to low-income communities, improves governments’ ability to generate tax revenue, and is associated with reductions in infant mortality.

Deliberation is a key element of the PB process, as participants develop project proposals based on ideas submitted by participants, and then discuss those proposals prior to voting.  Although there is less emphasis on deliberation in PB than in many mini-publics, PB programs link deliberation to project selection and eventual implementation, thus creating a clear path for participants to see how their participation leads to government action. 

We reviewed the literature and compiled the key findings on PB’s impacts on governance and well-being in a research brief, drawing from studies on Brazil, the United States, South Korea, and Peru. In this dispatch, we share what we found, considerations for future impact evaluations, and recommendations for practice. 

PB alters how governments spend resources and collect taxes.

Districts and cities using PB allocate resources to different issues than places that don’t use PB. In New York City, PB is associated with increased spending on schools, public housing, and streets and traffic improvements, and decreased spending on parks and recreation and housing preservation and development. Studies in Brazil have found that PB is associated with greater spending on water and sewage infrastructure, health care, and education.

Equity criteria for determining what projects go on the ballot and how funds are distributed across districts are critical to ensure that PB redirects spending to low-income communities, according to studies of PB processes in Porto Alegre and Belo Horizonte, Brazil, New York City, United States, and Seoul, South Korea. These criteria may be incorporated into formulas that determine points for each project, into deliberation processes, or into determining the pot of money available in different areas.

Governments can also reap the benefits of PB in the form of additional funds to spend on social services: municipalities using PB generate more local tax revenues. In Brazil, municipalities using PB saw an average 34 percent increase in local taxes relative to comparable municipalities without PB. Additional revenues collected in these contexts are roughly equivalent to the funds dedicated to PB. Residents in municipalities using PB may be more willing to pay taxes because they believe that the government is working on their behalf and can be held accountable — even if they don’t participate directly in the participatory process. In addition, governments may be more willing to collect taxes that are already ‘on the books’ because they made a public commitment to implementing projects selected by citizens.

PB improves community well-being by changing how public funds are spent and distributed.

Several studies of PB’s impacts use infant mortality as an indicator of basic well-being because it is a social indicator that can change in a relatively short period of time with the appropriate investments in public health. Brazilian municipalities with PB have lower infant mortality than comparable municipalities without PB after accounting for all other factors that might also impact infant mortality. PB’s effects grow stronger after a PB process has been in place for eight or more years, which suggests that PB drives broader governance shifts over time, which lead to improved well-being.

Governments increase spending on new projects like health clinics in poor communities when residents demand sanitation and health services through PB processes. Notably, Brazilian municipalities that use social justice rules to allocate PB funding to high-poverty neighborhoods have lower infant mortality than comparable municipalities that don’t use these rules. Community leaders also gain valuable networking access, including to a broader range of public health officials. These factors, combined, may also lead to increases in well-being.

In addition to using social justice rules, building the capacity of community leaders is important for sustainable gains in well-being. Brazilian municipalities with PB that build budget literacy and knowledge by holding informational workshops specifically for PB delegates and leaders have lower infant mortality rates than municipalities that seek to educate all PB participants.

PB’s impacts differ across locations.

Research on the impacts of PB is still evolving — PB has existed for just over three decades, and many cities have only adopted it in recent years. Much of the literature draws on studies from Brazil, the United States, and Canada, and consequently doesn’t capture the array of local circumstances that may affect the outcomes studied. Government responsibilities differ widely, so governments implementing PB programs may not have the competencies to shape health policy or collect taxes. State capacity matters, too: places with lower state capacity may see a lower rate of project implementation, which will in turn lower PB’s impact on well-being. Further impact evaluations from the range of jurisdictions and geographies pursuing PB processes are needed to understand PB’s ability to drive change in governance and well-being in different contexts.

These findings can be used to improve PB practice.

Practitioners can operationalize these findings as they advocate for and implement new PB processes, or improve existing ones, in pursuit of more effective governance and more equitable well-being outcomes. Advocates can emphasize PB’s potential to help raise tax revenues when making the case to government decision-makers. When designing PB processes, practitioners should consider using equity criteria for selecting projects and distributing funds across neighborhoods. And when monitoring and evaluating PB processes, practitioners could use georeferenced data to track where PB funding flows and involve the community in monitoring project implementation. A more extensive set of practical recommendations can be found in the research brief, developed in collaboration with government practitioners and civil society advocates convened by People Powered: Global Hub for Participatory Democracy.

Participatory budgeting alters how government works by transferring control of public decision-making from representatives to residents. The research findings we’ve presented indicate that this shift in power translates to better governance and greater well-being, as long as it’s implemented with certain design features like equity criteria and with the right contextual factors. These findings offer evidence that participatory and deliberative democratic practices deliver results for the people, which can be used to counter authoritarian governments’ claims to supply effective governance and high living standards while forgoing transparency, accountability, and civil and human rights.

For deliberation scholars and practitioners, PB demonstrates that empowering people to make binding decisions over public expenditures — rather than being merely consulted — is possible and, in many cases, desirable. Of course, the question of democratic legitimacy is important: PB’s legitimacy comes in part from the fact that all participants have the right to vote on projects, which isn’t necessarily the case for many deliberative forums. If we consider that PB’s strength lies in linking participation to government action while minipublics’ strength is in deliberation around complex issues, PB and minipublics are best conceived of as complementary initiatives.

PB has the potential to drive change in other areas, too, from civil society and political participation to education and learning, as the next dispatches in this series will show.

About the series

In this series of dispatches, members of the Global PB Research Board share key insights into the potential of participatory budgeting to drive social and political change, based on research conducted around the world. The series is the product of a collaboration between Deliberative Democracy Digest and People Powered: Global Hub for Participatory Democracy.

About the authors

Dr. Brian Wampler has been researching PB since the mid-1990s when he started attending PB meetings in Brazil. His work seeks to understand the great variation in how PB programs function and how these programs affect social and political change. He has published several books, including Participatory Budgeting in Brazil: Cooperation, Contestation, and Accountability (2007), Activating Democracy in Brazil: Popular Participation, Social Justice and Interlocking Institutions (2015), Democracy at Work: Pathways to Well-Being in Brazil (2019, with Natasha Borges Sugiyama and Michael Touchton), and Participatory Budgeting in Global Perspective (2021, with Stephanie McNulty and Michael Touchton). Wampler has also published in journals such as American Political Science Review, Comparative Politics, World Development, and Latin American Politics and Society.

Dr. Michael Touchton is a Political Science professor at the University of Miami. Professor Touchton studies participatory institutions and development, with a focus on Latin America, Africa, and the United States. He is co-author of three books: Salvaging Community: How American Cities Rebuild Closed Military Bases, Democracy at Work: Pathways to Well-Being in Brazil, and Participatory Budgeting in Global Perspective. He has published in top political science and interdisciplinary journals including The American Political Science Review, Comparative Political Studies, World Development, Political Research Quarterly, and The Journal of the American Planning Association.

Nikhil Kumar is research and policy associate at People Powered: Global Hub for Participatory Democracy, where he develops courses and materials, produces online content, and curates resources for participatory democracy practitioners. Previously, he worked with the Eurométropole of Strasbourg, France and the City of Helsinki, Finland. Nikhil holds a master’s degree in public policy from the Harvard Kennedy School.