Abstract This contribution analyzes the social impacts of participatory approaches introduced by international development agencies and the Chinese central government on dam resettlement in China. By analyzing resettlement villages in Yunnan Province, we first explore the complex ways in which local governments implemented one specific participatory approach, namely the right for dam resettlers to choose between self- or government-organized resettlement. We examine the reactions and specific responses of dam migrants to this participatory approach and probe how this ‘right to choose’ testifies to political rationalities that convey a narrow understanding of participation and shift responsibility for resettlement outcomes from the state to households. Secondly, we highlight the ways in which migrant households navigate the new participatory approach and its impacts on post-resettlement livelihoods. We notably highlight how the ‘right to choose’ reshuffled pre-resettlement social and power relations between local authorities and self- and government-resettlers. Our study demonstrates, first, that in China’s (neo)socialist governmentality, participatory approaches create (neo)liberal and (neo)socialist dam migrant subjectivities. The former cope with various disincentives and are successfully responsibilized and turned into obedient subjects. The latter are incentivized to be obedient and responsible, but instead frequently challenge the local state. Second, households which have decided to self-organize their resettlement in line with (neo)liberal rationalities are socially and economically marginalized regardless of their earlier social status. By applying a governmentality analytics, this study thus provides a nuanced picture of processes of marginalization and contestation in the course of dam-induced resettlement. Instead of running along the lines of rich and poor, marginalization through participation cuts across the economic divide and can better be explained by differentiating between (neo)liberal and (neo)socialist subjects.