The democratic innovation of participatory budgeting (PB) can potentially lead to greater and more informed citizen participation in policymaking and engage citizens that feel disconnected from political and policy processes (Geissel, 2019; Sintomer et al., 2008). Although the level of public engagement varies across Europe, there is a general trend towards co-creation visible in local participation – establishing and maintaining relationships between citizens and local authorities (Lender et al., 2016) – which is a significant contextual factor for the development of PB. To optimise the use of PB there is a need to study democratic innovations in different settings comparatively and the determinants of effective implementation and institutionalisation. This paper focuses on public engagement conditions and democratic innovations (with an emphasis on PB) implemented in seven European cities. Drawing on interviews with local stakeholders, the paper assesses PB (1) use, (2) impacts, and (3) needs. The comparative analysis finds similarities and differences in the use of democratic innovations, proposes practice-oriented typologies, and defines critical needs for optimising PB implementation. Theoretical and policy implications are discussed