How and where do participatory institutions contribute to the deepening of democracy? Substantial variation in the outcomes produced by participatory institutions is best explained by the incentives of elected governments to delegate authority and the capacity of civil society organizations to use contentious politics in and outside of these institutions. In eight cases of Brazil's participatory budgeting program, two municipalities produced strong results; two other municipalities produced failed programs; and four municipalities produced mixed, somewhat contradictory results. Failed programs can have a pernicious effect on efforts to deepen democracy, while the most successful programs improve the quality of local democratic processes.