Participatory Governance, à la Russe

Citizen participation in allocating public funds is now widely regarded as a hallmark of good governance. Over the past several decades, participatory budgeting initiatives have proliferated around the world, allowing residents to propose local improvement projects, deliberate over urban priorities, and vote on how municipal funds should be spent. Before the COVID-19 pandemic, more than 10,000 such initiatives were in operation worldwide.

Behind these impressive numbers, however, lies a more complex story. Participatory budgeting is not a single institutional model that can simply be replicated from one place to another. Rather, it encompasses a broad spectrum of political technologies, ranging from mechanisms that genuinely redistribute decision-making power to procedures carefully designed and managed by the state. Nowhere has this divergence been more pronounced than in Russia. In the late 2000s and early 2010s, two distinct approaches developed in parallel: initiative budgeting programs promoted by the Ministry of Finance in partnership with the World Bank and a participatory budgeting model developed by the Res Publica Center at the European University at St. Petersburg.

This article focuses on the Russian case to examine how the same underlying principle, citizen participation in municipal decision-making, gave rise to sharply different institutional arrangements. In doing so, it explores why participatory mechanisms can, in one context, redistribute political power, while in another they become little more than carefully managed administrative procedures.

‍

Porto Alegre and the Aftertaste of Dictatorship

Let’s begin a bit further back: Brazil, the late 1980s. The military dictatorship that had ruled the country for more than two decades has just collapsed. Under the civilian government of José Sarney, Brazil is gradually returning to representative democracy. In 1989, for the first time since 1964, Brazilians elect a president in a nationwide popular vote, ending military control over presidential succession. At the same time, the country is grappling with stagflation: the cost of living is soaring, while inflation erodes savings faster than wages and other sources of income can keep pace.

When everyday life becomes increasingly unaffordable, and the political order undergors profound change, public frustration is almost inevitable. That frustration found an outlet in the 1988 municipal elections. Voters handed significant victories to the left-wing Workers’ Party (PT), which had become increasingly active throughout the decade, mobilizing supporters in the streets as well as at the ballot box. Its greatest success came in Porto Alegre, where the party’s most radical faction secured a majority on the city council.

Why revisit this political victory today in the context of participatory budgeting?

Then, as now, Porto Alegre was a major economic, commercial, and political hub. It served simultaneously as the capital of one of Brazil’s largest states, the center of a rapidly expanding metropolitan area attracting migrants and investment, and an important transportation gateway with access to the Atlantic. During Brazil’s second wave of urbanization, the city grew at an extraordinary — and deeply uneven — pace. As migrants poured in from rural areas, many built informal housing from whatever materials they could find on the urban periphery. Against a backdrop of tensions between the city center and its outskirts, long-term residents and newcomers, demands for greater social and economic equality became especially acute. Add to this a rapidly expanding city and a population deeply distrustful of government, and the conditions were ripe for institutional experimentation.

Many scholars argue that this convergence of civic discontent and pressing urban challenges prompted the new municipal administration — working closely with grassroots social movements — to pursue a novel model of local governance. Their goal was to create a system in which residents from different social backgrounds could meet regularly, deliberate on the city’s most pressing problems, and collectively decide how to address them. Most importantly, they sought to give citizens direct authority over a portion of the municipal budget, allowing public deliberation to determine where those funds would have the greatest impact. This was the birth of what came to be known as “participatory budgeting.”

The activists who launched the experiment in Porto Alegre could hardly have imagined that what began as a bold local initiative would spread throughout Brazil, become enshrined in national legislation, and eventually evolve into a global movement. To understand why it proved so influential, it’s worth taking a closer look at how the system actually worked.

The city was divided into districts, each of which held open neighborhood assemblies that any resident could attend. Municipal officials and community organizers deliberately sought to bring together participants from a wide range of socioeconomic backgrounds, regardless of income, occupation, or social status. Alongside these territorial assemblies, thematic assemblies addressed issues affecting the city as a whole. Each assembly elected delegates to intermediate meetings and, ultimately, to the citywide Participatory Budget Council. The council reconciled district priorities with available financial resources, helped formulate the municipal budget, and monitored its implementation. Both the assemblies and the council operated on an annual budget cycle, repeating the process each year.

What made participatory budgeting revolutionary was not simply the introduction of public meetings, but a fundamentally new relationship between citizens and local government. For the first time, ordinary residents gained meaningful authority over public spending and could decide for themselves how municipal funds should be allocated. Groups that had traditionally remained on the margins of political life, including women, migrants, residents of informal settlements, and other socially vulnerable communities, were now directly involved in shaping budget priorities. Their presence changed not only the language of public debate but also the destinations of public investment. Transparency stripped local officials of familiar instruments of political control: patronage, informal bargaining, and the discretionary distribution of resources to favored constituencies.

In Porto Alegre, participatory budgeting produced measurable improvements in basic urban infrastructure, increased civic engagement, and weakened clientelist political practices, establishing what would become one of the world’s most influential models of democratic urban governance. In Brazil, the cumulative effects of these reforms endured until the country’s authoritarian turn in the mid-2010s, a process commonly dated from the impeachment of Dilma Rousseff in 2016 and the election of Jair Bolsonaro three years later.

‍

From Porto Alegre to Stavropol

The Porto Alegre experiment proved so successful that throughout the 1990s participatory budgeting spread to other Brazilian cities and soon attracted international attention. Yet despite its growing popularity among local governments and citizens alike, scholars have observed that as the model traveled, it gradually lost much of its original political meaning.

In Porto Alegre, participatory budgeting had emerged as a mechanism for redistributing both political power and public resources. Elsewhere, however, it increasingly evolved into a managerial tool, both politically and administratively.

At the micro level, a project-based approach to budgeting helped municipal administrations improve their operations. It encouraged interdepartmental coordination, trained officials to work collaboratively, synchronized infrastructure planning across agencies, for example, preventing newly laid roads from being dug up a week later to replace underground utilities, and ultimately made public investment more efficient while reducing unnecessary expenditures.

At the macro level, however, participatory budgeting could also function as a political technology that created the appearance of citizen involvement without fundamentally altering where decision-making power resided. Much of the procedural framework remained intact: neighborhood assemblies, annual budget cycles, advisory committees, and public voting. But its political substance, the creation of a new relationship between the state and society and the inclusion of groups historically excluded from decision-making, gradually faded. The original commitment to empowering marginalized communities was either abandoned or proved difficult to sustain under different institutional conditions.

Paris illustrates this transformation well. Since introducing participatory budgeting in 2014, the city has continued to direct public investment toward disadvantaged neighborhoods. Unlike Porto Alegre, however, these initiatives are driven primarily by government policy rather than citizen mobilization. Over time, the demographic profile of participants in neighborhood assemblies has come to resemble that of the city’s regular electorate. The result is an inversion of the original logic: relatively privileged residents often decide how marginalized neighborhoods should be transformed, thereby indirectly contributing to processes of gentrification. Moreover, the final selection of projects is made by a commission composed of municipal officials, a stage of the process in which ordinary citizens have no direct role (1).

This tension points to one of the central critiques of participatory budgeting: it eventually encounters a “glass ceiling” that cannot be overcome without more fundamental institutional change. Public engagement is typically strongest during the first years after the mechanism is introduced. But after several budget cycles, most of the relatively straightforward improvements have already been completed, parks and courtyards renovated, playgrounds repaired, and new public spaces created. The physical environment changes, while the structural problems that produced inequality in the first place remain largely untouched.

Yet these inherent limitations did little to diminish participatory budgeting’s global appeal. Its spread was championed by an unusually broad coalition of actors, including grassroots activists, elected officials, nonprofit organizations, academics, and multinational institutions. Even the World Bank, whose democratization initiatives in developing countries have often been met with skepticism, developed its own model. Riding the global wave of interest in participatory budgeting, the Bank worked with local experts and policymakers to adapt the mechanism to the institutional realities of the countries where it operated.

Before the annexation of Crimea in 2014, when Russia was still seeking closer integration with international institutions, cooperation with the World Bank was particularly active. In 2007, the Bank and the Russian Ministry of Finance jointly launched the Local Initiatives Support Program (LISP), which became the country’s primary testing ground for adapting participatory budgeting to Russian conditions.

The pilot region was Stavropol Krai. Residents were invited to submit proposals for improving their local communities through a regional project competition. Winning proposals received dedicated grant funding, which was distributed to municipalities through the regional budget. In 2014, an additional requirement was introduced: projects now had to secure co-financing from municipalities, businesses, or residents themselves.

This marked the emergence of what became known as “initiative budgeting” — participatory budgeting à la Russe.

‍

Participatory vs. Initiative Budgeting

In 2021, Russia’s Ministry of Finance issued methodological guidelines for the design and implementation of initiative budgeting practices. The document defined the concept as a “set of practices for involving citizens in the budget process in the Russian Federation, unified by the ideology of civic participation, as well as a sphere of state and municipal regulation governing public involvement in identifying and selecting projects financed from relevant budgetary funds.”

However, throughout the 2010s, the Ministry of Finance and the Local Initiatives Support Program (LISP) were not the only actors in the field of citizen-driven budgeting. In 2012, the Res Publica Center at the European University at St. Petersburg, supported by the Kudrin Foundation for Civil Society Initiatives, proposed an alternative, and in some respects competing, approach. Its authors explicitly drew on the experience of Porto Alegre, referring to their model as “participatory budgeting.” They defined it as “a set of technologies for the direct involvement of citizens in municipal governance, in which committees composed of residents decide how and where a portion of budgetary funds should be spent.” Under this model, citizens were expected to participate in allocating between 1 and 10 percent of the municipal budget.

In everyday urban policy discourse, the two terms, initiative budgeting and participatory budgeting, are often used interchangeably. Among practitioners and urbanists alike, a widespread assumption emerged that they essentially describe the same practice. But is that actually the case?

Both models rely on a competitive selection process. Groups of residents, initiative groups, territorial self-governance bodies, NGOs, and other civic organizations submit project proposals to municipal competitions. Winning projects are selected through electronic and/or in-person voting, after which they receive public funding, while municipal administrations oversee implementation. In some cases, project initiators or citizen budget committees also participate in monitoring execution. This is where the similarities end.

The first key difference lies in the source of financing. Initiative budgeting allocates a separate pool of funds specifically designated for civic proposals. However, applicants are required to demonstrate additional co-financing sources and specify how much residents, businesses, and local budgets are willing to contribute. In this sense, initiative budgeting functions as a form of public-private partnership, with clearly defined obligations for each actor. The regional government typically provides the main subsidy, with the remaining share covered by local residents and businesses (usually at least 3 percent of the grant amount), as well as municipal budgets (at least 5 percent). Crucially, this model is not integrated into the regular municipal budget cycle in the way participatory budgeting is.

Participatory budgeting operates differently. Up to 10 percent of the existing municipal budget is directly allocated among winning projects. The funds come from resources already available within the municipal treasury. Importantly, citizens are not required to make financial contributions; their input consists of time, expertise, and deliberation rather than money.

The second difference concerns who participates and how participants are selected. Initiative budgeting is formally open to all residents and depends on citizen initiative. In practice, however, participation is limited to those with sufficient time, resources, and motivation. This produces what is often described as an “active minority” that effectively makes decisions on behalf of a “passive majority.”

By contrast, the participatory budgeting model developed by the European University at St. Petersburg relies on sortition. Committees of 20 to 50 residents are selected by lottery, ensuring social diversity and minimizing the dominance of highly active groups. These citizens receive training in budgeting procedures, procurement rules, and urban planning before voting on projects that the municipal administration is then obliged to implement.

The third difference lies in the conditions under which citizens engage in the process. Broadly speaking, budget participation can include proposal development, voting, public deliberation, and oversight. In participatory budgeting, a citizen committee is formed at the beginning of the cycle and continues its work even after the budget has been approved and construction begins. In initiative budgeting, citizen engagement is concentrated at the early stages, during proposal development and competition submission. After that, participation is largely reduced to voting, often conducted electronically, while final approval remains with municipal authorities and relevant agencies.

In both models, responsibility for ensuring proper use of funds rests with local administrations. Citizens, however, retain access to financial documentation and oversight mechanisms through their involvement in the process. In initiative budgeting, post-project monitoring by residents is voluntary. In some regions, public commissions or civic groups are invited to participate in project acceptance procedures, but these bodies have no independent authority; their role is limited to observation and confirmation that implementation has been completed.

According to Russia’s Ministry of Finance, in 2015, most supported projects focused on basic infrastructure: road and water system repairs (51 percent of all completed projects), cultural infrastructure development (14%), and public space improvement (10%). At the time, experts suggested that once basic needs were met, citizens would begin proposing more “advanced” or higher-order initiatives.

By 2024, the composition of projects had indeed shifted. Public space improvements, courtyards, and playgrounds accounted for the largest share (30%), followed by engineering infrastructure repairs (25%) and educational projects. However, the combined share of initiatives that could be classified as “higher-level,” such as inclusion programs, revenue-generating projects, or digital initiatives, remained below 1 percent.

It is therefore increasingly clear that initiative budgeting is often used to address basic infrastructure problems that would traditionally fall under the state’s responsibility but are instead partially delegated to citizens. Today, it is possible to argue that in the competition between the two models, initiative budgeting has prevailed.

By 2019, more than 70 Russian regions had implemented initiative budgeting in some form, while participatory budgeting projects were being carried out only in about 15 cities. This disparity is partly explained by the fact that initiative budgeting was scaled through administrative hierarchies and hybrid political-administrative networks. Key vehicles for its diffusion included programs such as “People’s Budget” and “People’s Initiative.”

These programs were primarily launched by pro-government political structures, including the United Russia party and the All-Russia People’s Front. Regional governors had strong incentives to support them, as they helped secure federal funding, reinforced party alignment, and contributed to both gubernatorial and party legitimacy. Over time, some regions developed their own versions of “people’s budgets” with looser formal ties to United Russia, but which nonetheless continued to function within the broader system of political support for the ruling party [author’s note: it is also worth noting that United Russia drafted and introduced the core legislative package, including Federal Law No. 236-FZ of July 20, 2021, which formally incorporated initiative budgeting into Russia’s legal framework].

In this way, political institutions were able to appropriate initiative budgeting as a tool for electoral and administrative consolidation.

It would be an oversimplification to reduce the relationship between bureaucracy and citizens to a straightforward exchange of loyalty for resources. Still, it is difficult to ignore the extent to which initiative budgeting, alongside federal development programs, has integrated the state into everyday life: through playgrounds, new roads, and renovated embankments that reshape the physical and symbolic landscape of local communities.

‍

Paying Twice (or Even Three Times)

Over the past fifteen years, initiative budgeting has produced tangible local improvements, from repairing rural roads to building playgrounds. The types of projects that receive funding have also changed over time. In the early years, infrastructure projects dominated. Today, they have largely given way to public space improvements — projects that are quick to implement, highly visible, and easy for residents to appreciate. Advocates of the model argue that citizen co-financing and public oversight encourage residents to take better care of completed projects while fostering trust and a sense of partnership between citizens and local government.

Yet initiative budgeting has done little to alter the underlying architecture of public decision-making. Moreover, the additional funds raised from citizens are frequently used to finance services that governments are ordinarily expected to provide. Critics argue that requiring residents to co-finance essential public infrastructure is fundamentally inappropriate. Basic public services, a municipality’s “survival budget,” should be funded through general taxation, with revenues already collected by the state and redistributed back to the local level. Citizen participation, they contend, is most valuable when it shapes investments in new services and future development, not when it compensates for underfunded core responsibilities.

The roots of this financing model lie in the chronic fiscal weakness of Russian municipalities. According to the Ministry of Finance, roughly two-thirds of municipal revenues in recent years have consisted of transfers from regional and federal budgets. About half of those transfers are earmarked subsidies that municipalities receive to carry out responsibilities delegated from higher levels of government. As a result, the overwhelming majority of municipalities cannot cover even their routine operating expenses without external support. Under these conditions, co-financing ceases to be a voluntary contribution and begins to resemble an additional tax.

Every year, local initiative groups, often assisted by private consulting firms specializing in project development, prepare applications for a wide range of competitive funding programs: national projects such as the federal Comfortable Urban Environment initiative, competitions for the development of small towns and historic settlements, regional initiative budgeting programs, and even school-based participatory budgeting competitions for children. These applications, in turn, feed into the Ministry of Finance’s annual showcase of the country’s “best” initiative budgeting projects. Around this expanding ecosystem of government-sponsored competitions, an entire professional sector has emerged, including public participation consultants, urban development facilitators, territorial development producers, municipal management specialists, and other experts whose work revolves around designing and administering competitive civic projects.

This project-based marketplace serves the reporting needs of the state bureaucracy, but it also crowds out productive political conflict and public debate. The logic of competition encourages initiative groups to cooperate, build consensus, and package their ideas into proposals that can win grants. In theory, this is an admirable model of civic collaboration. In practice, however, conflict, the inevitable clash of competing interests that lies at the heart of democratic politics, largely disappears from the process. Instead, multiple groups submit competing projects, anonymous users cast online votes, and success often depends less on public deliberation than on which campaign is most effectively organized.

The distinction between participatory and initiative budgeting is therefore not merely technical; it is fundamentally political.

In its original form, participatory budgeting was conceived as a mechanism for redistributing power. It assumed that institutions themselves should change. Citizens serving on budget commissions became permanent participants in the municipal budget cycle and, in effect, enduring representatives of local communities within city government.

Initiative budgeting follows a different logic: the logic of large bureaucracies and depoliticized governance. The central question is no longer: “why does the city lack funding for essential infrastructure?” but rather: “which project will win the competition?” Collective political demands are replaced by competition among initiative groups.

In this way, a radically democratic vision of citizen participation is transformed into a depoliticized technology of governance.

‍

Beyond Politics

In many respects, Russia’s model of initiative budgeting has come to embody nearly every major criticism that scholars have leveled at participatory budgeting in the Global North. These include the “glass ceiling” of institutional change, the performative nature of public consultations, the dominance of an “active minority,” and the persistent underrepresentation of marginalized communities. At the same time, the Russian model has introduced several distinctive features of its own: mandatory co-financing by citizens and businesses, a heavy reliance on online voting and other digital participation tools, and funding mechanisms that can influence citizens’ choices by determining which types of projects are eligible for support.

In the process, the Russian bureaucracy has transformed initiative budgeting into a mechanism for mobilizing resources, drawing on citizens’ money, labor, and time to compensate for shortcomings in municipal governance. The Local Initiatives Support Program, together with related regional programs, became the vehicle through which the language of participatory budgeting was incorporated into Russia’s administrative system, but according to the logic of managed participation rather than the redistribution of political power.

Russia’s full-scale invasion of Ukraine has further clarified the political trajectory of the country’s administrative system. Earlier models of public governance have steadily receded, while fiscal policy has increasingly taken on a wartime, mobilizational character. Under these conditions, it is possible that initiative budgeting itself, along with other practices associated with transparency, public statistics, and dialogue between the state and society, could eventually lose its place within the governance toolkit.

For the time being, however, the mechanism continues to serve an important fiscal function. At a time when the Russian state has sought to constrain spending in many areas while sharply increasing expenditures related to the war, initiative budgeting enables local governments to shift part of the financial burden for essential public services onto citizens, often without provoking broad public resistance.

Bibliography:

1. For more on participatory budgeting in Paris, see: Pradeau G. (2018) A Third Wave of Participatory Budgeting in France // Hope for Democracy: 30 Years of Participatory Budgeting Worldwide / Dias N. (eds.). Faro, Portugal: Oficina de Texto. P. 373–383; Préteceille E. (2007) Is Gentrification a Useful Paradigm to Analyze Social Changes in the Paris Metropolis? // Environment and Planning A. Vol. 39. No. 1. P. 10–31; Préteceille E. (2006) Has Social Segregation Increased? The Parisian Metropolis between Polarization and Social Mix // Sociétés Contemporaines. Vol. 62. No. 2. P. 69–93.

‍