Local participatory budgeting in a multilevel government – an institutional analysis of Ecuadorian municipal expenditure policies

This paper analyses participatory budgeting in multilevel governance settings. The Institutional Development and Analysis framework is applied to evaluate two Ecuadorian municipal case studies. Here, participatory budgeting piloted bottom-up institutions to include citizens’ preferences in the allocation of local government expenditures. To formalize and up-scale these local innovations, participatory budgeting became a requirement for all government levels under the 2008 constitution. Higher government level requirements for planning subsequently introduced conflicting demands on decentral budgetary processes and led to partial re-centralization of municipal investment planning. The study thus exemplifies difficulties of i) vertical policy coordination in multilevel participatory budgeting and ii) integrating long-term planning in yearly participatory budgeting investment decisions. These problems need to be resolved to facilitate legitimate and effective participatory budgeting in multilevel governments.