The sustainable development of the local self-government institute in modern democracies, the introduction of the principles of subsidiarity, regionalization and decentralization show a clear need for implementing the systemic reforms aimed at strengthening local initiatives in Ukraine. Therefore, there is a need to increase the role of self-governing structures, to grapple for the ways of adaptating governance at the regional level to the long-standing European traditions of democratic governance, and to address the procedural issues of the power distribution, transfer and delegation, in particular the formation and distribution of local budgets. One of the most effective tools to enhance local communities is a participatory budget, the implementation of which in Ukraine is gaining momentum and needs to be analyzed, and to be supported upon its successful realization. This article focuses on the analysis of the implementation of participatory budget as an instrument of the local community development in Ukraine in the case of the city of Sumy.