In the wake of the economic crisis in 2007, many municipal governments faced a variety of financial challenges. Scholars and practitioners call for citizen participation in various parts of government; however, it is unclear how efforts to engage the public can be sustained when municipalities undergo tough financial times. This research explores the impact of internal and external factors—(a) impact of financial crisis, (b) environmental and organizational complexity, and (c) administrative decentralization—on whether citizens are given the opportunity and resources to be involved in decision-making. Findings suggest that, despite their concerns for the diminishing fiscal capacity, local governments provide supportive institutional arrangements that may encourage public participation. Organizational complexity in local government also has a positive impact on facilitating public involvement and providing resource. Finally, the analyses indicate mixed findings for environmental complexity faced by local jurisdictions.