This article exploits the potential and limits of participation as a means to overcome authoritarian structures. The main argument is that social innovation at the grassroots level can only become radical if it helps overcome authoritarianism which is a general characteristic of capitalist societies and has a specific form in Austria and Vienna. The two projects chosen for in-depth analysis are initiatives of bottom-up participation: Local Agenda 21 and Local Area Management. Both are deeply interwoven with current processes of transformation in Europe, oscillating between path dependency — surrendering to one more episode of controlled modernization — and radical change — the diffusion of a political culture of democracy and participation. The initiatives analysed focus on a common political domain: broadening public participation by offering better access to the local state and the public sphere. Both projects put in train broad discussions of how to organize social change and mobilization. They are Janus-faced as there were struggles between democratic tendencies, which seek to acknowledge a wide range of stakeholders in policy making, and techno-corporate tendencies. Both projects are `schools of participation', as they increased know-how and social competence and raised consciousness. But only by questioning liberal governance and the straitjacket of its naturalization of the market society can citizens regain control of urban development and jointly shape the destiny of the city.