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Documents inCopyright © 2013 Inter-American Development Bank. This working paper may be reproduced for any non-commercial purpose. It may also be reproduced in any academic journal indexed by the American Economic Association's EconLit, with previous consent by the Inter-American Development Bank (IDB), provided that the IDB is credited and that the author(s) receive no income from the publication.
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Abstract 1Since 2004 the government of Peru has implemented a process of participatory budgeting (PB), which is mandatory for every sub-national government. We analyze the link from PB to coverage and water service quality indicators. We find no statistically significant relationship between PB and our measures of coverage and service continuity, regardless of whether the outcome variables are measured in levels or in changes. Qualitative evidence collected in a sample of municipalities is consistent with this result. Further, PB in the water sector may also lead to inequitable outcomes as the poor may confront greater costs of participation. At the root of this lack of connection we find weaknesses both in the PB process itself as well as among the different actors in the process: citizens, municipalities and water service providers.JEL codes: H42, H72, D7