The article is devoted to the actual issue – institutional analysis of initiative budgeting and territorial public selfgovernment, as well as the possibility of their integration. Over the past few years, a system of civil participation in budget decisions has been built in Russia, the regulatory framework of practices has been created, thousands of employees of state and local government bodies have been trained, project centers have appeared for ensuring development of initiative budgeting. Citizen participation in budget decisions can significantly accelerate the development of the lower level of local government. Initiative budgeting is an innovative instrument of public finance and at the same time a social technology allowing for the real involvement of citizens in the issues of state and municipal governance. Initiative budgeting development programs make it possible to transfer financing of projects aimed at solving local issues with the participation of citizens onto a systemic basis. The results and materials of this study can serve a foundation for theoretical understanding of the institutional development of public finances at the regional and local levels. At the same time, this practical area that was intensively developing in recent years requires deep institutional analysis.