Despite participatory institutions’ increasing ubiquity, we know little about their effects on governance and well-being. What we do know comes largely from Brazil, where positive outcomes have been attributed to civil society’s role in implementation. Often, however, participatory institutions are imposed by national governments, with little civil society engagement. In these cases, scholars have argued, participatory institutions are unlikely to improve governance and well-being, as civil society is not present to unlock the institutions’ potential. We test this proposition in Peru, the first country featuring government mandated participatory institutions for all subnational governments. We find, surprisingly, that Peru’s participatory budgeting process increased pro-poor spending and improved citizen’s quality of life. We attribute these outcomes to reduced information asymmetries, made possible by the central role played by an influential and autonomous government agency. We employ a unique panel dataset, as well as an original survey and extensive interviews with government and civil society actors.
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