Taxpayers are sometimes the best people to decide how their money gets spent — sounds obvious, but usually we don’t have a direct say beyond who we elect. That’s changing for San Francisco residents.

It intends to be the first major US city to allow citizens to directly vote on portions of budget via the web. While details are still coming together, its plan is for each city district to vote on $100,000 in expenditures. Citizens will get to choose how the money is spent from a list of options, similar to the way they already vote from a list of ballot propositions. Topical experts will help San Francisco residents deliberate online.

So-called “participatory budgeting” first began in the festival city of Porto Alegre, Brazil, in 1989, and has slowly been expanding throughout the world. While major cities, such as Chicago and New York, have piloted participatory budgeting, they have not incorporated the modern features of digital voting and deliberation that are currently utilized in Brazil.

According to participatory budgeting expert and former White House technology fellow, Hollie Russon Gilman, San Francisco’s experiment will mark a “frontier” in American direct democracy.

This is significant because the Internet engenders a different type of democracy: not one of mere expression, but one of ideas. The net is good at surfacing the best ideas hidden within the wisdom of the crowds. Modern political scientists refer to this as “Epistemic Democracy,” derived from the Greek word for knowledge, epist?m?. Epistemic Democracy values citizens most for their expertise and builds tools to make policy making more informed.

For example, participatory budgeting has been found to reduce infant mortality rates in Brazil. It turns out that the mothers in Brazil had a better knowledge of why children were dying than health experts. Through participatory budgeting, they “channeled a larger fraction of their total budget to key investments in sanitation and health services,” writes Sonia Goncalves of King’s College London. “I also found that this change in the composition of municipal expenditures is associated with a pronounced reduction in the infant mortality rates for municipalities which adopted participatory budgeting.” [PDF]

In other words, in Brazil, direct democracy made policy smarter through the use of intelligent crowdsourcing. With any luck, the same success will come to San Francisco and, soon after, to the rest of the country. More information to come as details about the project form.

The participatory budgeting project was spearheaded by Ron Conway’s civic innovation group, Sf. Citi, in collaboration with Mayor Ed Lee and city Supervisor David Chiu (see why Mayor Ed Lee wanted to experiment with participatory budgeting, in our video interview below and watch our announcement with Supervisor Chiu below that