Participatory budgeting allows citizens or residents of a locality to identify, discuss, and prioritize public spending projects, and gives them the power to make real decisions about how money is spent.

[1] Participatory budgeting processes are typically designed to involve those left out of traditional methods of public engagement, such as low-income residents, non-citizens, and youth.

Since the original invention in Porto Alegre, Brazil, in 1988, participatory budgeting has manifested itself in a myriad of designs, with variations in methodology, form, and technology.

Porto Alegre is the capital city of the state of Rio Grande do Sul, and a busy industrial, financial, and service center; at that time of implementation, it had a population of 1.2 million.

[9] Brazil's contemporary political economy is an outgrowth of the Portuguese empire's patrimonial capitalism, where "power was not exercised according to rules, but was structured through personal relationships".

[10] Unlike the Athenian ideal of democracy, in which all citizens participate directly and decide policy collectively, Brazil's government is structured as a republic with elected representatives.

Because the law-making process occurs behind closed doors, elected officials and bureaucrats can access state resources in ways that benefit certain 'clients', typically those of extraordinary social or economic relevance.

For example, a neighborhood leader who represents the views of shop owners may ask a local party official for laws to increase foot traffic on commercial streets.

Because this patronage operates on the basis of individual ties between patron and clients, true decision-making power is limited to a small network of party officials and influential citizens rather than the broader public.

Over time, city leaders’ political support for the participatory budget has declined, and Porto Alegre’s current leadership has suspended the process.

[12] According to the World Bank Group, certain factors are needed for participatory budgeting to be adopted: "[…] strong mayoral support, a civil society willing and able to contribute to ongoing policy debates, a generally supportive political environment that insulates participatory budgeting from legislators' attacks, and financial resources to fund the projects selected by citizens.

[17] The online voting option was later integrated to the participatory budgeting of the Brazilian state of Rio Grande do Sul in 2003,[18] and in the municipality of Belo Horizonte in 2006.

[27] Although some initiatives have used text messages to enable mobile voting—such as in La Plata, Argentina and Cascais, Portugal[16][28]—most usage has been to encourage voting participation, either in-person or via the Internet.

[29] Some examples include: These results suggest that countries who "sustain participatory budgeting programs may be part of general improvements in governance that produce[s] more durable access to healthcare.

For example, in the Dominican Republic, citizens reported that they did not feel they had a voice in their local government and claimed that they were not aware of how to participate in legislation within their districts.

Participatory budgeting is impactful in countries that struggle to provide public services and in rural communities marked by high levels of poverty.

[45] Reviewing the experience in Brazil and Porto Alegre, a World Bank paper points out that lack of representation of extremely poor people in participatory budgeting can be a shortcoming.

[31]: 5  Nevertheless, studies show that although participants may not fully mirror the demographics of the population as a whole, participatory budgeting fares better than the status quo of traditional representative democracy institutions.

For instance, political scientist Graham Smith notes that participatory budgeting in Porto Alegre has been substantially more effective in mobilizing women and citizens from disadvantaged socioeconomic backgrounds.

[46] In a similar vein, a report on New York City's process shows that participatory budgeting was more successful in mobilizing people of color and low-income groups than local elections.

[clarification needed][56] Most notably, this model has been embraced in the Netherlands, Denmark, Sweden, Switzerland, Germany, Austria, Portugal, Latvia, and Estonia.

[55] Development took on impetus when the Federation of African Cities and Regional Governments (UCLGAA) took an active role promoting training and visibility regarding participatory budgeting at its triennial International Meeting, Africities, held in Dakar in 2012.