In theory, direct citizen engagement in budgeting helps local governments reflect the citizens’ budget preferences more precisely, thereby enhancing citizen-government communication. However, the efficacies of budget participation remain ambiguous considering both its democratic values and the cost of deliberation. In this study, we test how direct citizen participation by means of participatory budgeting (PB) affects the financial condition of local governments. We use a sophisticated concept of financial condition that encompasses various abilities of local government. We measure the degree of citizen participation as the availability of institutional mechanisms associated with different levels of inclusiveness and authorities determined by South Korean local government ordinances of formal budget participation. Our empirical analysis based on South Korean local governments’ data between 2012 and 2019 reveals that a PB institution with higher participation level further worsens the local financial condition. The adverse effects are mostly identified in the mid-term and long-term financial conditions, whereas the short-term financial condition remains unaffected. The findings imply that direct participation in theory corrects mismatches between bureaucratic and citizen priorities, but, in practice, the citizens may inappropriately direct mid- and long-term oriented public investment and debt management.

理论上，公民直接参与预算有助于地方政府更准确地反映公民的预算偏好，从而加强公民与政府的沟通。然而，考虑到预算参与的民主价值观和审议成本，其效果仍然不明确。在本研究中，我们测试了公民通过参与式预算（PB）的直接参与如何影响地方政府的财务状况。我们使用复杂的财务状况概念，涵盖地方政府的各种能力。我们将公民参与程度衡量为与不同程度的包容性相关的制度机制的可用性以及韩国地方政府正式预算参与条例确定的权限。我们基于2012年至2019年韩国地方政府数据的实证分析表明，参与水平较高的PB机构会进一步恶化当地的金融状况。不利影响主要体现在中长期财务状况上，而短期财务状况则不受影响。研究结果表明，理论上的直接参与可以纠正官僚优先事项和公民优先事项之间的不匹配，但在实践中，公民可能不适当地指导中长期导向的公共投资和债务管理。不利影响主要体现在中长期财务状况上，而短期财务状况则不受影响。研究结果表明，理论上的直接参与可以纠正官僚优先事项和公民优先事项之间的不匹配，但在实践中，公民可能不适当地指导中长期导向的公共投资和债务管理。不利影响主要体现在中长期财务状况上，而短期财务状况则不受影响。研究结果表明，理论上的直接参与可以纠正官僚优先事项和公民优先事项之间的不匹配，但在实践中，公民可能不适当地指导中长期导向的公共投资和债务管理。