A report by the Inter-American Development Bank (IDP) provides a systematic overview of many international experiences of Participatory Budgeting (PB). While it is similar to many academic and governmental reports in that it qualifies its findings overall it concludes that PB does improve decentralized public service delivery. Put simply … involving citizens in deciding on a proportion of public spending in a planned manner makes government work better.
The paper provides the first experimental evaluation of participatory budgeting showing that it increased public participation in the process of public decision making, increased local tax revenues collection, channeled larger fractions of public budgets to services stated as top priorities by citizens, and increased satisfaction levels with public services.
These effects, however, were found only when the model was implemented in already-mature administratively and politically decentralized local governments. The findings highlight the importance of initial conditions with respect to the decentralization context for the success of participatory governance.
"…findings suggest that introduction of participatory governance practices should be carefully sequenced. Saturating different reforms such as administrative, fiscal, and political decentralization together with participatory budgeting appears to diminish the potential that the latter can have when implemented in already-mature decentralized local governments.
Nonetheless, our evidence suggests that participatory budgeting can be an important mechanism to improve information flows between citizens and elected authorities. This mechanism enhances government accountability and increases the likelihood that citizens’ preferences are reflected in the implementation of public policies when applied in a mature decentralized local environment."
- Full report available on the IDP website