Democratic Governance and Public Funding Strategies: Does Citizen Participation Impact Revenue Diversification?

Citizens can either support or resist new tax and/or nontax policies for revenue-raising in the budgetary process. The relationship between citizens’ role and revenue diversification is an important but under-researched topic. Therefore, to fill this gap in the existing knowledge, this study aims to explore the relationship between citizen participation and revenue diversification. Using the 2012 ICMA data paired with multiple data sources, this exploration offered empirical evidence that citizen participation has significant positive effects on the levels of tax and nontax revenue diversification. Further, the results confirm that local governments with a commitment to citizen participation are more likely to diversify their revenue structures.