Participatory Budgeting as a Governance Innovation: Theoretical Approaches and Institutional Embedding in Hungary

Abstract

This study examines participatory budgeting as a form of governance innovation, with particular attention to its theoretical underpinnings and institutional role within local government systems. The paper argues that, in the fiscally constrained environments of Central and Eastern Europe, participatory budgeting should be understood not primarily as a redistributive tool, but as a mechanism for strengthening governance capacity. Drawing on the perspectives of deliberative democracy, institutional theory, and public sector innovation, the study demonstrates how participatory budgeting contributes to enhancing transparency, legitimacy, and administrative learning.