IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0324411.html

Can participatory budgeting mitigate government debt risk？—An empirical analysis using cross-national panel data

Author

Listed:
  • Yongpeng Li
  • Qianqian Zhang

Abstract

Objectives: Participatory budgeting, serving as a complementary mechanism to traditional democratic practices, grants citizens direct involvement in the budgetary decision-making process, thereby embodying features of direct democracy. It has consequently gained recognition and promotion in numerous countries. However, scholarly opinion remains divided regarding the efficacy of participatory budgeting in mitigating government debt risks. This study seeks to address this ongoing academic debate by employing a cross-national panel data. Methods: Utilizing a dataset of 664 samples from 83 countries between 2008 and 2023, sourced from the International Budget Partnership (IBP), this study combines survey data on public participatory budgeting opportunities with government debt statistics from the International Monetary Fund (IMF). Fixed-effects and mediating effect models are employed to empirically examine the relationship between public budget participation and government debt risk. Results: Our analysis indicates that, on average, government debt risk is markedly lower in cases of participatory budgeting, a finding that is significant at the 1% level. This finding remains robust after replacing the explained variable to address robustness concerns and employing instrumental variables to mitigate endogeneity issues. Mediation analysis further indicates that the quality of explicit debt disclosure serves a significant mediating role, whereas contingent liabilities do not exhibit a mediating effect. Additionally, the mitigating effect of participatory budgeting on government debt risk is more pronounced in countries adopting accrual-based government accounting compared to those using cash-based accounting.

Suggested Citation

  • Yongpeng Li & Qianqian Zhang, 2025. "Can participatory budgeting mitigate government debt risk？—An empirical analysis using cross-national panel data," PLOS ONE, Public Library of Science, vol. 20(12), pages 1-18, December.
    • Handle: RePEc:plo:pone00:0324411
    DOI: 10.1371/journal.pone.0324411
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0324411
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0324411&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0324411?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rebecca Abers, 1998. "From Clientelism to Cooperation: Local Government, Participatory Policy, and Civic Organizing in Porto Alegre, Brazil," Politics & Society, , vol. 26(4), pages 511-537, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Novy, Andreas & Leubolt, Bernhard, 2004. "Das Partizipative Budget in Porto Alegre. Die Dialektik von staatlichen und nicht-staatlichen Formen sozialer Innovation," SRE-Discussion Papers 2004/03, WU Vienna University of Economics and Business.
    2. Aaron Schneider, 2006. "Responding to fiscal stress: Fiscal institutions and fiscal adjustment in four Brazilian states," Journal of Development Studies, Taylor & Francis Journals, vol. 42(3), pages 402-425.
    3. Saguin, Kidjie, 2018. "Why the poor do not benefit from community-driven development: Lessons from participatory budgeting," World Development, Elsevier, vol. 112(C), pages 220-232.
    4. Grillos, Tara, 2017. "Participatory Budgeting and the Poor: Tracing Bias in a Multi-Staged Process in Solo, Indonesia," World Development, Elsevier, vol. 96(C), pages 343-358.
    5. Ana Paula Pimentel Walker, 2015. "The Conflation of Participatory Budgeting and Public–Private Partnerships in Porto Alegre, Brazil: The Construction of a Working-Class Mall for Street Hawkers," Economic Anthropology, Wiley Blackwell, vol. 2(1), pages 165-184, January.
    6. J Rios & D Rios Insua, 2008. "A framework for participatory budget elaboration support," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(2), pages 203-212, February.
    7. Andreas Novy & Bernhard Leubolt, 2004. "Das Partizipative Budget in Porto Alegre: Die Dialektik von staatlichen und nicht-staatlichen Formen sozialer Innovation," SRE-Disc sre-disc-2004_03, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
    8. Katarzyna Kołat & Marek Furmankiewicz & Magdalena Kalisiak-Mędelska, 2022. "What Are the Needs of City Dwellers in Terms of the Development of Public Spaces? A Case Study of Participatory Budgeting in Częstochowa, Poland," IJERPH, MDPI, vol. 19(9), pages 1-21, April.
    9. repec:foi:wpaper:2010_14 is not listed on IDEAS
    10. Terence Wood, 2018. "The clientelism trap in Solomon Islands and Papua New Guinea, and its impact on aid policy," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(3), pages 481-494, September.
    11. Gonçalves, Sónia, 2014. "The Effects of Participatory Budgeting on Municipal Expenditures and Infant Mortality in Brazil," World Development, Elsevier, vol. 53(C), pages 94-110.
    12. Justin Beaumont & Walter Nicholls, 2008. "Plural Governance, Participation and Democracy in Cities," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 32(1), pages 87-94, March.
    13. Ernesto Ganuza & Héloïse Nez & Ernesto Morales, 2014. "The Struggle for a Voice: Tensions between Associations and Citizens in Participatory Budgeting," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 38(6), pages 2274-2291, November.
    14. Speer, Johanna, 2012. "Participatory Governance Reform: A Good Strategy for Increasing Government Responsiveness and Improving Public Services?," World Development, Elsevier, vol. 40(12), pages 2379-2398.
    15. Eric Sabourin, 2022. "Public Policies for Sustainable Territorial Development in Brazil: Between Clientelism and Participation," Sustainability, MDPI, vol. 14(5), pages 1-18, March.
    16. Dennis Rodgers, 2011. "Separate but Equal Democratization?: Participation, Politics, and Urban Segregation in Latin America," WIDER Working Paper Series wp-2011-016, World Institute for Development Economic Research (UNU-WIDER).
    17. Salvatore Russo, 2013. "Governance challenges by participatory budget in the Italian municipalities," Working Papers 23, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    18. Grindle, Merilee, 2010. "Sanctions, Benefits, and Rights: Three Faces of Accountability," Working Paper Series rwp10-026, Harvard University, John F. Kennedy School of Government.
    19. Juan J. Rivero & Luisa Sotomayor & Juliana M. Zanotto & Andrew Zitcer, 2022. "Democratic Public or Populist Rabble: Repositioning the City amidst Social Fracture," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 46(1), pages 101-114, January.
    20. Fox, Stephen, 2016. "Open prosperity: How latent realities arising from virtual-social-physical convergence (VSP) increase opportunities for global prosperity," Technology in Society, Elsevier, vol. 44(C), pages 92-103.
    21. Martina Balazova & Daniel Klimovsky & Maria Murray Svidronova, 2022. "Determinants of combining budgetary innovations at the local level: experience from Slovakia," Public Sector Economics, Institute of Public Finance, vol. 46(3), pages 355-383.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0324411. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.