<p>The article features the development of initiative budgeting practices in Russia and some elements of foreign experience. It highlights the lack of theoretical elaboration and methodological support of the initiative budgeting process, which does not contribute to the objective institutionalization of initiative budgeting and prevents the dissemination of best practices and social learning among stakeholders. The research reveals the importance of solving the fundamental scientific problem and developing evaluation methods to measure the effectiveness of budget expenditures in various discrete institutional alternatives as well as forming the mechanisms of product budgeting at the level of Russian municipalities is shown. Elements of scientific discourse in this sphere are shown in the context of the development of issues of public management modernization and the budget process in particular. With regard to development practices in the regions, it is noted that processes in the sphere of open budgeting and initiative budgeting are more likely to occur at the stage of «informing», whereas for the success of the system it is necessary to move to the stage of citizens engagement and coproduction. The article lists some opportunities of open budgets and initiative budgeting use as elements of direct democracy for the development of single-industry cities along with other instruments of strategic management.</p>