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Participatory budgeting (PB) is designed to leverage local knowledge about community needs and translate spending preferences into tangible community development action by giving communities control over key budgetary resources. Moreover, PB participants learn about decision-making processes in development policy and can organize to pursue their communities’ interests beyond the PB process by engaging with government and civil society. PB advocates hope that infrastructure, service delivery, and, ultimately, well-being will improve for underserved communities and groups that have been historically excluded from the perspective of representative democracy. This article presents the theoretical logic connecting PB to community development and summarizes the global evidence from studies that test the theoretical propositions above. We find evidence for PB’s impact on community development performance in several important contexts. However, we also note that many hypotheses have yet to be tested in rigorous, large-N, comparative studies. There is thus considerable room to evaluate PB’s impact in the future.

We evaluate the role of a new type of democratic institution, participatory budgeting (PB), for improving citizens’ well-being. Participatory institutions are said to enhance governance, citizens’ empowerment, and the quality of democracy, creating a virtuous cycle to improve the poor’s well-being. Drawing from an original database of Brazil’s largest cities over the last 20 years, we assess whether adopting PB programs influences several indicators of well-being inputs, processes, and outcomes. We find PB programs are strongly associated with increases in health care spending, increases in civil society organizations, and decreases in infant mortality rates. This connection strengthens dramatically as PB programs remain in place over longer time frames. Furthermore, PB’s connection to well-being strengthens in the hand of mayors from the nationally powerful, ideologically and electorally motivated Workers’ Party. Our argument directly addresses debates on democracy and well-being and has powerful implications for participation, governance, and economic development.

Participatory governance programs, which institutionalize government—civil society interactions through the promotion of public deliberation and decision making, are being adopted by local governments to harness a wide range of outcomes believed to be positively associated with citizens' and civil society organizations' active involvement in public life. This article draws from an original survey administered to 833 individuals elected to leadership positions in Brazil's municipal-level participatory budgeting program. Analysis of these data using a series of outcome variables and a set of individual- and municipal-level variables demonstrates that civil society organization (CSO) leaders now engage in direct negotiations with other CSOs, form alliances with other CSOs and carry these practices into other institutional venues, which helps to undercut traditional clientelistic practices while also empowering citizens and enhancing the quality of democracy. Further, citizens living in communities that directly benefit from public works won through participatory budgeting are empowered by credible state commitment. Citizens not directly affiliated with a CSO continue to rely on their direct connections to government officials, thus demonstrating that individuals' type of involvement in civil society has a significant impact on how participatory governance arrangements can affect basic state—society relationships.