There is a growing scholarly and policy awareness of the fact that informal institutions that lie wholly or partly outside formal state structures and that take on various governance‐related functions have tremendous potential to strengthen citizen participation, encourage inclusive decision‐making and promote improved service delivery at the local level. Local informal governance institutions that play an active role in promoting citizen participation in decision‐making at the municipal level exist all over the Western Balkans. However, systematic empirical research on these is limited. This article is an initial analytical attempt at bringing together some of the existing literature and data on these institutions in four Western Balkan countries together with our own original research on the topic. Our analysis indicates an important role that these informal institutions play in the areas of citizen participation, inclusive decision‐making and service provision.