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Study summary: Participatory democracy is a new formulation of the theory of the social contract guided by John Jacques Rousseau, whereby the citizen became a partner of the administration in decision-making after the administration had taken decisions unilaterally, that is, the individual who transformed from a negative citizen who has the right to vote only to a positive citizen and an actor participating in decision making. In this study, I dealt with defining the concept of participatory democracy as a new method of modern management that various countries worldwide seek to implement, including Algeria. Since the study is focused on Algeria, it dealt with the legal framework for participatory democracy in Algeria, as well as its practical applications in the field of local administration through operating the local elected councils, as well as in the fields of environment and reconstruction, since those fields are vital areas for local development. And in the end, I mentioned the most important legal and illegal obstacles that hindered the application of the participatory democracy and its practical practice. I also concluded through this study that participatory democracy is feasible at the level of elected local councils, if the obstacles that prevent its implementation were addressed, including the weak structuring of civil society and its role at the local level, as well as the weakness of participation mechanisms and the lack of identification of its institutional and organizational frameworks, in addition to the deficiency of the style of the political upbringing and the poor culture of citizenship.