Participatory Budgeting (PB) allows communities to decide together how to spend money. It shifts resource allocation authority from centralized decision-makers to the people impacted by funding choices. Originally developed in Porto Alegre, Brazil, PB has expanded globally across civic, institutional, and blockchain contexts.
How It Works
PB follows a structured cycle from proposal to accountability.
- Community members submit proposals for how shared funds should be spent
- Deliberation and review — participants discuss, refine, and evaluate proposals collectively
- Voting — the community votes using various mechanisms (one-person-one-vote, quadratic voting, STAR voting)
- Funds allocate based on voting outcomes and budget limits
- Accountability — funded projects report on execution and impact
Advantages
- Empowers community voice in resource allocation
- Makes resource distribution transparent and participatory
- Aligns spending with real community needs and experiences
- Encourages deliberation, not just voting
Limitations
- Struggles with funding specialized technical work requiring expertise
- Low-engagement or apathetic communities may produce unrepresentative results
- Time-sensitive decisions may not fit the deliberative cycle
- Unequal participation can skew outcomes toward vocal minorities
Best Used When
- Active DAOs want decentralized budgeting for treasury funds
- Regional Web3 communities need to coordinate public goods spending
- Civic tech networks experiment with blockchain-enabled governance
- Organizations are committed to grassroots, bottom-up economics
Examples and Use Cases
Bioregional DAO Allocation
A bioregional DAO allocates $50k for community gardens, workshops, and local infrastructure through participatory budgeting, with residents voting on proposals.
Protocol Treasury Delegation
Protocol treasuries delegate budget rounds to the community using quadratic voting to determine allocations.
Impact DAO Coalition
Impact DAO coalitions pool matching funds across regenerative finance initiatives, with participating communities voting on priorities.
