2011; Pires and Vaz 2011). Most large municipalities have also used participatory budgeting programs that allow citizens to allocate a percentage of the municipal budget directly. This participatory architecture opened significant channels into policy-making arenas, giving citizens meaningful access to budgetary and policy-making processes and potentially strengthening connections between citizens and governments (Afonso and Rodrigues 2003).

Finally, Brazil features wide variation in municipal governance and municipal tax outcomes. Some municipalities collect taxes successfully while others, frequently with similar economies and local state capacity, do not. We test hypotheses connecting the equally-wide differences in municipal participatory architecture to tax compliance by exploiting variation across Brazil’s 5,570 municipalities and within those municipalities over time. The result is a unique opportunity to estimate relationships and build rare, systematic knowledge surrounding tax compliance in the developing world.

_Two New Types of Participatory Institutions_ Local governments in Brazil experimented with and institutionalized two types of participatory institutions during the 1980s and 1990s: participatory budgeting and public policy councils.<sup>3</sup> In both institutions, citizens voluntarily participate in state-sanctioned policy-making process in which these citizens express _voice_ and exercise _vote_ on specific budget and policy issues. These are co-governance institutions, relying on the active engagement of both government officials and citizens. There is a voluminous literature on Brazil’s PB programs and policy councils, so we only briefly describe these institutional processes.

Government officials adopt and initiate PB programs to reshape how the local government interacts with the broader public. Governments typically allocate 2-5% of the overall municipal budget to the programs, which incorporates citizens directly into decisions on how the money is spent. Citizens participate in the programs by attending a series of meeting over the course of the year, from large meetings that pull in thousands of people to small planning meeting that focus on technical issues. Citizens have three basic roles: the right to deliberate (exercise voice) in public forums over the distribution of scarce resources, the right to vote for specific projects, which governments then implement, and the right to monitor project implementation to ensure that public resources are spent as they were intended (Baiocchi 2005; Wampler 2007; Goldfrank 2011; Shah 2007). Importantly, municipalities often decentralize their PB meetings to encourage greater numbers of people to participate in their home communities, where they are typically better-informed about their needs. The programs theoretically result in more-informed citizens, better-targeting of community needs, more efficient, transparent spending, and stronger connections

> 3 In addition, Brazilian governments also made extensive use of public policy conferences, which are held around thematic issues (health, environment). These councils are open to all citizens and produce non-binding policy recommendations at municipal, state and federal levels. <mark>Pogrebinschi</mark> and Samuels demonstrate how these decisions made in these conferences were later reflected in the decision-making of national executives and legislatures (2015).

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