Summary: Participatory Budgeting is a model for “a direct-democracy approach to budgeting,” providing citizens the opportunity to “deliberate, debate, and influence the allocation of public resources” while simultaneously “educating, engaging, and empowering citizens and strengthening demand for good governance.”1 This democratic innovation began in Brazil nearly four decades ago, where it demonstrated measurable social benefits before spreading to thousands of municipalities worldwide, such as Paris, New York, and Taipei. Adopted by diverse public institutions ranging from local governments to educational systems, the approach has been recognized for its ability to enhance civic engagement, enable a fairer distribution of public resources across communities, as well as strengthen social cohesion, resulting in increased access to education, utilities, and reduced conflict. Participatory Budgeting exemplifies many Systemic Risk Response (SRR) criteria, such as Universal Responsibility, Justice, Individual and Collective Agency, Multiple Ways of Knowing, and Transformation.
Case Study: Participatory Budgeting
Overview: In 1989, against a backdrop of prevalent poverty and slum dwellings without access to clean water and medical clinics, the municipal government in Porto Alegre, Brazil, implemented a process, known today as Participatory Budgeting, to engage citizens on prioritizing expenditures to improve living conditions. The impact in Porto Alegre was transformative: “Civic involvement skyrocketed, corruption dropped, and ... a 20% increase in sewer and water hookups was realized, along with a quadrupling of schools.2
The experience was declared an international best practice by UN-Habitat. Participatory Budgeting experiences have been verified in 6,000 local governments across 40 countries, ranging from large metropolitan cities like New York, Taipei, and Paris, to communities big and small.3 The World Bank has created guidance for the approach, and networks and organizations have sprung up globally to build capacity for its implementation.4
Highlights in Systemic Risk Response
A systemic risk response encompasses any action that mitigates, prepares for, adapts to, and transforms away from the harms of systemic risks. Placing decision-making power in the hands of citizens on the ground who best understand their needs and the risks they face can result in positive transformation.
Justice
Concepts of justice lie at the heart of the Participatory Budgeting approach. Projects enable procedural equity and integrate the expertise of those most affected as they are conceived, designed, and proposed and then voted on by local citizens. Smaller groups of citizens are often involved directly in implementation, monitoring, and project improvements. The World Bank highlighted that Participatory Budgeting “strengthens inclusive governance by giving marginalized and excluded groups the opportunity to have their voices heard and to influence public decision-making vital to their interests.”5
Portugal, which is launching one of the world’s first national participatory budgeting initiatives, is piloting the use of ATM machines to try to ensure even those living in remote areas can submit ideas and decide on country-wide funding decisions.6 The World Bank further emphasized that if Participatory Budgeting is done properly, it has the potential to make governments more responsive tocitizens’ needs, increase accountability for performance in resource allocation and service delivery, and enhance the quality of democratic participation.7 In some applications, a “Quality of Life Index” is developed by the local government to inform a fair allocation of the ear-marked budget resource: “Regions with higher poverty rates, denser populations, and less infrastructure or government services receive a higher proportion of resources than better-off and wealthier neighborhoods.”8
Individual and Collective Agency
Participatory Budgeting is described as a “cycle of meeting and voting” mainstreamed within a municipal government’s annual budgeting process, and while each community adapts the Participatory
Budgeting process to its specific needs, it generally adheres to the following steps:
- Design the process: A steering committee is established that is representative of the community, which then creates a set of rules together with city officials to ensure the process is inclusive and meets local needs.
- Brainstorm ideas: Citizens share and discuss ideas for projects through meetings and online tools.
- Develop proposals: Budget delegates (i.e., volunteers) develop the identified ideas into feasible proposals, which are then vetted by city experts.
- Cast a vote: Citizens vote to allocate the available budget among the feasible proposals.
- Fund winning projects: The city then implements the winning projects and, together with residents, tracks and monitors implementation.
- Iteration and evolution: The process iterates and evolves for the next annual cycle.9
Multiple Ways of Knowing
A systemic risk response is inclusive by design, embracing shared values and multiple types of knowledge (tacit, experiential, scientific, traditional) and embedding these into decision-making and response design and implementation. Participatory Budgeting embodies these traits: It involves public deliberation and negotiation over resources and policies undertaken between participants, issue experts, and the local government.10 For example, since 2002, Ecuador has led a project for the Inclusion of Indigenous Women in the Participatory Budgeting Process to promote multi-ethnic, intergenerational, and women’s participation, leading to a significant increase in rural electrification, reaching 95% coverage in the subtropical area.11
Transformation
The potential for Participatory Budgeting approaches to catalyze transformative change in communities around the world is significant. Realizing structural change in local government (i.e., changes in policies, practices, and resource flows necessary for transformation) is inherent in Participatory Budgeting. Critically, Participatory Budgeting introduces a new model for how local budgets are allocated, shifting power dynamics and tapping into the self-organizing capacity of citizens who often have an acute sense of hazards and risks that they face.
Transformation has already been realized, beginning with the very first instance in Porto Alegre, Brazil, to today, where over 11,000 Participatory Budget initiatives have been conducted in 40-plus countries.12 For example, in Belo Horizonte, Brazil, residents take part in face-to-face discussions and voting, with every district given the same resources, such as government support and access to polling stations. Community members suggest and approve projects, which are then added to the city budget.
A group of elected citizen delegates, called Comforcas, is formed to oversee these projects. Each year, people in every district vote on 25 projects, and local leaders narrow them down to 14, which are then implemented under Comforcas’ supervision.13 The Municipality of Osasco designed the “Contando as Contas” methodology, an interactive workshop developed to make public budgeting more engaging and accessible. During these workshops, participants utilize games, simulations, reflection, mock budget activities, and trade-off discussions to learn about government finance and foster empathy for the challenges faced by public managers.
“This represents an evolution in participatory budgeting — moving beyond just involving citizens in budget decisions to actively educating them about the complexities of public finance first, creating more informed and empathetic participation.”14
Key Insights and Lessons Learned
Participatory Budgeting exemplifies Systemic Risk Response (SRR) criteria related to Universal Responsibility, Justice, Individual and Collective Agency, Multiple Ways of Knowing, and Transformation. Reviewing applications of Participatory Budgeting reveal some important insights to achieve more widespread adoption and long-lasting impact:
- Go beyond limited or one-off exercises to achieve deep impact at scale: Participatory Budgeting initiatives tend to be limited in scale; they have typically only tapped into a relatively small portion of a municipal government’s overall budget envelope: 7% or less.15
- Find cross-party champions and support: One of the biggest challenges of government-driven initiatives, like Participatory Budgeting, is that they are subject to changes in political will and often fail to withstand electoral changes, making large-scale impacts over the long term more challenging.16 For example, in the United States, under the Obama administration, Participatory Budgeting was mainstreamed with the potential for lasting impact as it formed part of the U.S. Open Government National Action Plan and the Department of Housing and Urban Development’s Community Development Block Grants;17 however, the administrations that followed have halted these initiatives.
- Situate Participatory Budgeting within the local context recognizing both formal and informal power structures: Participatory Budgeting “can be captured by interest groups … and can mask the undemocratic, exclusive, or elite nature of public decision-making, giving the appearance of broader participation and inclusive governance while using public funds to advance the interests of powerful elites.”18 To prevent such abuses, World Bank experts recommend that a Participatory Budgeting process “must fully recognize local politics and formal and informal power relations, so that the processes yield outcomes desired by the median voter.”19
1 Anwar Shah, “Participatory budgeting, public sector governance and accountability series” (World Bank, 2007), https://openknowledge.worldbank.org/server/api/core/bitstreams/bfb2f14e-41c5-5503-ba54-9cfcb804f51c/content.
2 Alexandra Flynn, “Participatory budgeting: Not a one-size fits all approach,” Public Sector Digest (February 2016), www.osgoode.yorku.ca/wp-content/uploads/2016/01/Flynn.pdf.
3 Kai-Jo Fu, “Translating participatory budgeting into an administrative system: The case of Taipei City,” Journal of Asian Public Policy 16, no. 3 (September 2023): 312–31, https://doi.org/10.1080/17516234.2021.1998947; Flynn, “Participatory budgeting: Not a one-size-fits-all approach”; Marco Kamiya, Roberto Herrera, and Giuseppe Tesoriere, “Exploring the role of participatory budgeting in accelerating the SDGs: A multidimensional approach in Escobedo, Mexico” (UN-Habitat, 2020), https://unhabitat.org/sites/default/files/2020/08/exploring_the_role_of_participatory_budgeting_and_sdgs_eng.pdf.
4 Shah, “Participatory budgeting: Next generation democracy — Participatory budgeting project,” 2016, www.participatorybudgeting.org/resource/next-generation-democracy/.
5 Shah, “Participatory budgeting.”
6 “The world’s first national participatory budget,” Apolitical, accessed September 18, 2025,
https://apolitical.co/solution-articles/en/portugal-world-first-participatory-budget.
7 Shah, “Participatory budgeting.”
8 Shah, “Participatory budgeting.”
9 Shah, “Participatory budgeting.”
10 Shah, “Participatory budgeting.”
11 Thamy Pogrebinschi, “Inclusion of Indigenous women in the participatory budgeting project,”LATINNO Dataset, 2017, www.latinno.net/en/case/8138/.
12 Daniel Schugurensky and Laurie Mook, “Participatory budgeting and local development: Impacts, challenges, and prospects,” Local Development & Society 5, no. 3 (September 2024): 433–45, https://doi.org/10.1080/26883597.2024.2391664; “LATINNO | Innovations for democracy in Latin America,” accessed September 18, 2025, www.latinno.net/en/; Kamiya, Herrera, and Tesoriere,
“Exploring the role of participatory budgeting”: Yves Cabannes, “Participatory budgeting a powerful and expanding contribution to the achievement of SDGs and primarily SDG 16.7,” Gold Policy Series (United Cities and Local Governments, 2019), www.gold.uclg.org/sites/default/files/02_policy_series-v3.pdf.
13 Patrick Scully, “Belo Horizonte participatory budgeting – Participedia,” April 12, 2021,
https://participedia.net/case/744.
14 Felipe Tannus, “Knowledge is power: Innovating how citizens learn and shape public budgeting in Brazil,” Participo, November 5, 2023, https://medium.com/participo/knowledge-is-power-innovating-how-citizens-learn-and-shape-public-budgeting-in-brazil-30cd52aa8708.
415 Kamiya, Herrera, and Tesoriere, “Exploring the Role of Participatory Budgeting.”
16 Emyr Williams, Emily St Denny, and Dan Bristow, “Participatory budgeting: An evidence review” (Public
Policy Institute for Wales, 2017), https://orca.cardiff.ac.uk/id/eprint/124566/1/PPIW-
report_participatory-budgeting-evidence-review_-July-2017-FINAL.pdf.
17 Shah, “Participatory budgeting.”
18 Shah, “Participatory budgeting.”
19 Shah, “Participatory budgeting.”