governments and organized groups are quick to publicly hail the programs, which then reinforces perception of good governance and strong outcomes. Tax compliance then improves because a broader number of citizens come to believe that they have a voice in the political system and also because public services improve.

Thus, we also hypothesize that the network effect from individual participants to the rest of the municipalities will be greater when individuals participate as members of groups. One reason is that larger groups are more likely to have a greater impact on policy decisions because the leaders representing larger groups carry more weight in decision-making processes. The leaders then report back to their group about their positive impact, which then spills-over beyond the group members as these citizens take their ideas back to their broader communities. In addition, collective participation through community groups decreases the cost and time burden on the broader population, which then has the effect of overcoming basic collective action problems associated with participation.

Several studies provide evidence for the “collective-input” pathway connecting participation to civil society development and public services. For instance, Hordjik (2006) and Touchton and Wampler (2014) demonstrate that PB is associated with an increase in the number of civil society organizations operating in areas where PB has been implemented. In a similar vein, the literature suggests PB strengthens the provision of public services. For instance, a World Bank study (2008) assessing PB in Brazil finds a strong, positive association between PB and access to water services. Several studies in Brazil also find that PB is associated with higher spending in health care–related areas and lower levels of infant mortality (Gonçalves 2014; Touchton and Wampler 2014). Furthermore, Touchton et al. (2017) connect the presence of Brazil’s policy management councils in areas related to health care with systematically lower infant mortality levels.

We evaluate the potential impact of individual and collective inputs by using data from participatory budgeting, where participants have the right to select infrastructure projects, social programs, or some combination of the two. We argue that the presence of participatory budgeting directly incorporates citizens’ voice into budgetary and policymaking processes. In turn, these programs lead to greater support for state and government activities because governments using participatory institutions produce better well-being outcomes (see paragraph above). The process of incorporating citizens’ voice and improving well-being then generates broader support for tax compliance.

<u>Collective Oversight: Groups that are involved in the selection of specific projects</u> have vested interests in working to ensure that these projects are implemented well. Participatory institutions typically establish oversight committees to monitor project design, project bidding, as well as actual project implementation. These committees generate close working relationships among civil society leaders, civil servants, and contractors as they seek to ensure that scarce public resources are properly used.

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