- **_PB_** was measured as the percentage of the electorate that participated in the PB process the year before designing the budget (Schneider and Goldfrank 2002).

**Participatory budgeting can improve public management and public service delivery.** For instance, a comparison of participatory budgeting at the county level in Brazil showed that on average, counties where participatory budgeting policies have been implemented are better managed, have lower levels of corruption, and fewer irregularities than socio-economically similar counties without participatory budgeting (Zamboni 2007). This comparison was based on ten counties with PB and ten counties without PB. The counties were matched on variables that influence governance such as voter turnout, the presence of the seat of a judiciary district as well as the number of civil servants and their wages and socio-economic factors like literacy rate, education level, and per capita income.

**Municipalities governed through a system of local participatory democracy were found to increase access to electricity, sewerage, and education faster than those communities ruled by political parties.** In a study of public good provision in poor communities in Oaxaca, Mexico, Diaz-Cayeros et al. (2013) estimated the effects of _usos y costumbres_ —a form of participatory democracy prevalent in indigenous communities—on the provision of local public goods. The research design benefited from an important institutional innovation in the state that allowed indigenous communities to choose their forms of governance. To assess the effects of local governance institutions on the provision of public goods, the authors used propensity score matching and a first differences approach to generate inferences from observational data.

# **_Indicators_**

- The **_effectiveness of participatory budgeting_** was operationalized using proxies based on financial indicators of local public administration including: level of own revenue collection and spending on public capital (Zamboni 2007). The rationale is that effective PB leads to increases in taxes collected, improved local government financial management, and increased capital spending.

- Diaz-Cayeros et al. (2013) also assessed the **_effectiveness of participatory budgeting_** in terms of the allocation of funds for service provision. In this case, where communities could self-select to use either a form of participatory democracy or to be ruled by a political party, a matching procedure was designed to create an appropriate counterfactual through which equally poor, isolated, indigenous communities could be compared in their forms of governance. The dependent variable was the rate of change of public good coverage, in terms of the percentage of the municipal households who have water, sewerage, electricity, and that are illiterate.

- Another type of indicator used by Baiocchi et al. (2004) was based on perceptions of the **_effectiveness of participatory governance_** . This was measured by key actors in local government and civil society as well as a compilation of socio-economic data. Better governance was measured as a variation in the number of and nature of offences found by auditors in the course of the random audits program with respect to the level of compliance with public sector management guidelines and legal requirements at the local level.

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