Participatory budgeting directly involves citizens in making decisions about how public money should be spent. It means involving citizens in identifying spending priorities, making and voting on proposals about how to spend the budget, and then involving citizens in overseeing and evaluating how the money was spent. The practise emerged in the 1980s in Porto Alegre, Brazil and has since been adopted in many cities and regions around the world. Participatory budgeting is a tool which gives citizens significant influence and power in decision making. The intention is to make the budgetary process more transparent, more public and more open. The process is believed to deepen democracy, build stronger communities, and make public budgets more effective. In the process of creation of a participative budget, the relationship between the local government and the citizen’s changes in relation to traditional budgeting methods. It is a way to promote public learning and active citizenship and to also achieve social justice through improved resource allocation. Through participatory budgeting practice, traditionally excluded political actors, such as low-income citizens and neighbourhoods get empowered to take an active part in building their future. [Wampler, B. (2000) A Guide to Participatory Budgeting]
PAZI(N), PRORAČUN! is a Croatian good practice example of transparent and participative approach to defining public budget on city level. Citizens are first informed about funds flows into and out of the city budget. Then they have the possibility to give their suggestions through numerous public hearings and their neighbourhood representative bodies. Citizens of Pazin get to contribute with their ideas on public area management issues and financing priorities in different sectors. The main focus of the whole process was on the education of citizens as they were educated on how the local government functions and how the budget is allocated during the presentation of the submitted proposals in their neighbourhoods. They were also informed about the plans and strategies for the city. As the project grew over the years, the same model was applied to much larger municipal projects.