One particularly promising innovation in participatory budgeting , or PB — a process to directly empower citizens to make spending decisions on a defined public budget. PB was first attempted in Porto Alegre, Brazil, in 1989. Its success led to the World Bank calling PB a “best practice” in democratic innovation. Since then, PB has expanded to over 1,500 cities worldwide, including several in the U.S. Starting in 2009 in Chicago’s 49th Ward with a budget of just $1 million, PB in the United States has expanded to a $27 million-a-year experiment. Municipal leaders from Vallejo, California, to New York City have turned over a portion of their discretionary funds to neighborhood residents. Boston recently launched the first youth-driven PB. Nearly half of New York’s City Council members are slated to participate this fall, after newly elected Mayor Bill de Blasio made it a cornerstone of his campaign. Chicago Mayor Rahm Emanuel created a new manager of participatory budgeting who will help coordinate Council districts that want to participate. The White House recently included federally supported participatory budgeting as part of its international Open Government Partnership commitments.

For many Americans, government just isn’t working. In 2013, government dysfunction surpassed the economy as the top identified U.S. problem. A recent survey found that nearly 6 out of 10 Americans rate the health of our democracy as weak — and unlikely to get better anytime soon. But in small corners throughout the United States, democratic innovations are creating new opportunities for citizens to be a part of governance. Collectively known as open government or civic innovation, these projects are engaging policymakers, citizens and civil society and proving the skeptics wrong.

Wants and needs

In PB, citizens are empowered to identify community needs, work with elected officials to craft budget proposals and vote upon where to spend public funds. The decisions are binding. And that’s important: Making democracy work is not just about making better citizens or changing policies. It is also about creating structures that create the conditions that make the effective exercise of democratic citizenship possible, and PB is uniquely structured to do that.

Chicago has been a particularly insightful petri dish to study PB in the U.S., mainly because the city is an unlikely candidate for democratic innovations. For decades its Democratic machine retained a strong and continuous hold over city government. The Daley family held the mayoralty for a combined 12 terms. While discretionary funds (known as “menu money”) are allocated equally — but not equitably, given different needs — to all 50 wards, the process of spending this money is at the discretion of locally elected aldermen. From 1972 to 2009, 30 Chicago aldermen were indicted and convicted of federal crimes ranging from income tax evasion to extortion, embezzlement and conspiracy. Clearly, Chicago has not always been a model of good governance.

Against this backdrop, PB has continued to expand in Chicago. This year three districts participated. The Fifth Ward, home to the University of Chicago, decided not to continue the process again this year. Instead, this year the ward had four groups of residents each allocate $250,000. The alderwoman noted that this enabled the transparency and engagement aspect of PB with fewer process resources — they had only 100 people come out to vote.

Different versions of PB are aimed to lower the current barriers to civic engagement. I have seen PB bring out people who have never before engaged in politics. Many longtime civic participants often cite PB as the single most meaningful civic engagement of their lives — far above, say, jury duty. Suddenly, citizens are empowered with real decision-making authority and leave with new relationships with their peers, community and elected officials.

However, PB is not a stand-alone endeavor. It must be part of a larger effort to improve governance. This must include greater transparency in public decision making and empowering citizens to hold their elected officials more accountable. The process provides an enormous education that can be translated into civic activity beyond PB. Ideally after engaging in PB, a citizen will be better equipped to volunteer in the community, vote or push for policy reform. What other infrastructure, both online and off, is needed to support citizens who want to further engage in more collaborative governance?

Change is never easy. Cities are sharing an ever-expanding burden when it comes to managing their finances and governing public works and infrastructure. Letting citizens be a part of this job presents an opportunity for cities to emerge as innovation hubs. PB is both an important and instructive experiment: It illustrates that when cities create meaningful opportunities for citizen engagement, their residents will participate with enthusiasm.