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This paper contributes to the growing body of research on participatory democracy and the literature on associational democracy by exploring the impact that institutional reforms have on local-level configurations of civil society. In the 1980s a wide range of participatory experiments were initiated in Brazil, most notably Participatory Budgeting in municipal governance. Municipios that adopted PB in principle devolve much or all of the decision making on new investments to decentralized participatory forums. In this paper we consider the results of an eight-city matched-pair analysis conducted in 2004. in which we selected municipios that adopted PB in 1997-2000, and matched them with a similar municipio that did not in the same period, drawing from the full sample of municipios over 20,000 inhabitants. Building on relational theories of civil society, we show that PB has clear but limited effects on civil society. It moves civil society practices from clientelism to associationalism, but does not contribute to the capacity of civil society to self-organize, at least in the time-frame considered. We also show that this democratizing effect on civil society practices and networks is conditioned by pre-existing state-civil society relations. [ABSTRACT FROM AUTHOR]