Urls of some web sites instead of sharing literature would perhaps provide you some insights as to how in India these issues are dealt with.:

1. GCMMF :: Amul - The Taste of India | Bread Spread Producers in India ...

www.amul.com/

2.https://new.sahaj.co.in/

3. National e-Governance Plan | India Portal

https://india.gov.in/e-governance/national-e-governance-plan

4. Election Commission of India

eci.nic.in

5.National Voter's Service Portal

www.nvsp.in

Some of my works are also available in research gate. Mostly Service oriented Architecture approach would deal with your agenda.

You cannot MAKE  citizens do anything if you are talking about their participation. You must find out what interests them or concerns them and then try to offer opportunities for participation that may possibly encourage them to participate.

Hello,

I do agree with A. Churchman. Have a look at this authors:

Callon, M., Lascoumes, P., & Barthe, Y. (2001). Agir dans un monde incertain : essai sur la démocratie technique. Paris: Ed. du Seuil.

Banerjee, A., & Duflo, E. (2012). Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. PublicAffairs.

I totally agree with @Arza Churchman. Your approach must come from a place of true partnership, meaning that you must believe that targeted community has valuable contribution to make. Instead seek out community contribution not participation.

Is there no responsibility on governments and other institutions for encouraging people to participate by offering some incentives?

Motives to participate will most likely vary depending on the form of co-production or co-creation/the business model. What types of business models do you consider? Do you have more context information?

Thanks for the comments and the literature hints. I also agree with Arza Churchman and I should have watched out for my wording. With MAKE I rather meant  "encourage" or "support" citizens to participate with the premise of course that citizens have a real contribution to make. 

The concept of "smart cities" could throw light on this. This said, a smart city can—and must—mean more than the use of information and communication technology (ICT) for urban transport and lower emissions of greenhouse gases: among others, it implies smarter, upgraded water supply and waste disposal facilities, and more efficient ways of lighting and regenerating urban districts; it also encompasses a more interactive and responsive administration, education, healthcare, safer public spaces, and the needs of growing and ageing populations. Digital financial services systems beckon too.

In short, a smart city is not just a city that leverages ICT in a particular sector but that implements ICT for the benefit of its communities, with their participatory action and engagement, to excel in the areas of economy, environment, living, mobility, people, and government. Definitely, ICT cannot do it alone: but it is an indispensable ally of commercialization, funding, intelligent policies, business-process transformation, and business-model innovation.

If you are looking at literature outside the EuroAmerican core, I would suggest you go to the MOM (living other ways) website. Their researchers work with an interesting approach to the subject, more in the lines of what Arza Churchman questions. 

http://www.mom.arq.ufmg.br/mom/index.html

I suggest reading practitioner materials with an eye to how they involve citizens in change processes. This literature is rich in participatory strategies, and also in identifying stages and forms of public involvement including citizen mapping and fact checking research about the places in which we live, right up to co-design of innovation and scaling out innovations. Try starting here

http://youngfoundation.org/wp-content/uploads/2012/10/The-Open-Book-of-Social-Innovationg.pdf

@Eva, I do not consider any business model for now. It is more a genaral question.I am trying to get an overview of what has been done thus fare practically or theoretically.

But you are right, there are important differences depending on the buisness model. For instance, in the energy sector, one can find interesting literature, see for instance: 

Hoffman S and High-Pippert A. From private lives to collective action: recruitment and participation incentives for a community energy program. Energy Policy, 38(12): 2009: 7567-7574 

@Olivier, thanks for the hint. This is definitly an interesting way to approach the issue. I could even find an literature on "Human smart cities", advancing that citizens are the main drivers of smart cities and less the technologies. See for instance: Oliveira, À., & Campolargo, M. (2015). From smart cities to human smart cities . 2015 48th Hawaii International  Conference on System sciences (HICCS).

@ Lorena and Mike. Thanks a lot for the references. I'll have a look a them. 

By engendering extensive community action in light of a retracting social state, England’s big society agenda is designed to produce an uncoordinated form of landscape governance that tasks the mixed economy of local residents with the responsibility of overcoming the shock of public sector austerity in a bid to enhance general well-being (Cabinet Office 2010).

In Nigeria, it is Community Development Association. People living in certain area or community team together to execute community based projects for their own benefit.

See

Campanera, J. M., Nobajas, A. and Higgins, P. (2014) The Relationship Between Residential Quality of Life and Socioeconomic Status in England, in Urban Affairs Review, Vol 50(1) 100–133 DOI: 10.1177/1078087413485204  retrievable from uar.sagepub.com

Asaolu, T. A., Olaniran, M. O., Olapeju, O. O. and Odunnaike, J. S.. (2015).

Baseline Survey and Design of Environmental Management Blueprint for Ilaro Traditional Core Area. A research sponsored by TetFund Nigeria

.