Local Government Budget Transparency and Citizens’ Trust: A Field Experiment in Urban India

Thesis Abstract

This study investigates how local government budget transparency affects citizens’ trust in urban governance in India, addressing the persistent gap between budget disclosure and public legitimacy in rapidly urbanizing contexts. Despite reforms promoting open budgeting, empirical evidence linking transparency to trust at the municipal level remains fragmented, with limited causal insight into the mechanisms through which information diffusion shapes legitimacy perceptions among diverse urban residents. The aim is to assess whether enhanced budget transparency increases citizens’ trust in local government, and to identify contextual factors that condition this relationship. Specifically, the study seeks to (1) measure the effect of a structured transparency intervention on perceived government accountability, (2) examine whether information salience and accessibility mediate trust, (3) evaluate differential impacts across socio-economic groups and neighborhoods, and (4) compare the relative effectiveness of online dashboards versus community-information centers in fostering trust. The research employs a mixed-methods, quasi-experimental field design conducted in three metropolitan municipalities in India over twelve months. The population consists of adult residents (aged 18 and above) living in designated intervention and control wards, with a total targeted sample of 2,400 respondents for quantitative analysis, distributed equally across wards. A multi-stage sampling approach selects 12 wards per city (6 intervention, 6 control), and within each ward, 33 respondents are surveyed. In addition, 40 in-depth interviews are conducted with local officials, civil society representatives, and trusted community leaders to contextualize quantitative findings. Data collection instruments include a structured questionnaire measuring trust in local government, perceived transparency, political efficacy, and information accessibility, as well as a budget literacy scale. An audit of actual budget documents and a log of information dissemination activities accompany the survey data. The intervention comprises two transparency modalities (a) an enhanced online budget dashboard featuring plain-language summaries, interactive visualizations, and issue-based budget narratives, and (b) community-information centers staffed to explain budgetary processes and respond to resident inquiries. The study employs a difference-in-differences (DiD) analytical framework to estimate causal effects on trust, supplemented by regression analysis controlling for demographic covariates and fixed effects at the ward level. Mediation analysis examines whether perceived transparency and information salience mediate the effect of the intervention on trust. Qualitative data are analyzed thematically using NVivo to identify mechanisms, barriers, and facilitators of trust formation, with triangulation against survey results to enhance validity. Expected findings anticipate a positive effect of enhanced budget transparency on citizens’ trust, with magnitudes varying by information modality and resident characteristics. It is hypothesized that online dashboards yield stronger trust gains among higher-education and younger respondents due to higher information salience, while community-information centers bolster trust among lower-income and older residents by reducing access barriers. Mediation analysis is expected to reveal that perceived transparency and clarity of budgetary information partially mediate trust, with stronger effects when information is perceived as personally relevant and actionable. The study also predicts heterogeneous effects across neighborhoods with varying prior levels of trust and political engagement. Theoretical contribution centers on integrating the theories of accountability, legitimacy, and information salience within local governance, extending the principal-agent framework to urban budgeting in a developing-country setting, and demonstrating how medium-specific transparency interventions influence trust dynamics. Methodologically, the research advances field experimentation in public financial management by combining DiD with qualitative triangulation and budget-audit validation to establish causal pathways between transparency and trust. Policy implications include evidence-based guidance for municipal reformers on designing cost-effective transparency strategies, highlighting the relative efficacy of digital dashboards versus physical information centers, and underscoring the importance of tailoring transparency initiatives to local literacy levels and socio-economic diversity. The study concludes with concrete recommendations for scaling successful modalities, ensuring participatory budgeting elements, and institutionalizing transparency practices to sustain trust in urban governance beyond episodic reforms.