Brazil is home to some of the most successful experiences in participatory local government. The proliferation of civil society organizations in Brazil during the transition to democratic rule was accompanied by the development of new political values and strategies that fostered institutional renewal at the municipal level. Brazil's 1988 constitution decentralized political authority, thereby granting municipal administrations sufficient resources and political independence to restructure policymaking processes. Coalitions of civil society organizations and political reformers have taken advantage of this flexibility to experiment with new institutional types. The political strategies of civil society organizations are often driven by the need to find immediate solutions to dire social problems and by a broader interest in increasing the access of ordinary citizens to key decision-making venues. The strategies of the political reformers, often led by the left-of-center Workers' Party (PT), have been based on transforming how and to whom public goods are distributed. Scholars in the theoretical debate on democratization have missed key linkages among civil society activists, local participation, governing coalitions, and institutions because they have conceived of only two mutually exclusive options, the demobilization of civil society in posttransition settings and the emergence of counterinstitutional civil society organizations of a social movement type. These theoretical frameworks are unable to show how Brazil's civil society is linked to efforts to expand the institutional terrain on which citizens compete for political resources. This article identifies cases in Brazil where civil society organizations challenge old practices, such as clientelism and patronage, while simultaneously offering concrete alternatives for new practices, strategies, and institutions. The specific political strategies developed by civil society organizations during Brazil's transition to democracy fostered the creation of deliberative policymaking institutions. One institutional type, participatory budgeting, incorporates citizens into deliberative decision-making venues. Political activity within civil society has led to significant political and social change in municipal government in Brazil, belying claims that Brazil finds itself trapped in a deadlocked democracy.' Participatory budgeting was initiated in 1989 in the municipality of Porto Alegre