Young farmers' clubs - active at this week's Royal Welsh show - provide a good model of how to involve children and young people in decisions affecting them.
But many other service providers are not responding to the needs of their young clients - even after consulting them, says inspection agency Estyn.
It has suggested that youth participation could be made a condition of government funding for organisations working with young people.
Every Welsh school must have a pupil council meeting regularly from November, to encourage pupil participation. And Estyn, in a report commissioned by the Assembly government, found that children and young people (aged 11-25) are being consulted more about their needs and opinions.
However, service providers are not planning strategically to include young people in decision-making, and some are not taking into account their needs, even after gathering information from them. The report singles out young travellers, the homeless and disabled people as having little input into decisions affecting their lives. First-language Welsh speakers also have few opportunities to participate in decision-making through the medium of Welsh.
Staff skills are too variable and training is unco-ordinated, meaning staff do not always provide effective ways to engage young people. The report also found that the older group - aged 16 to 25 - participates the least in decision-making.
The report urges the Assembly government to increase support to senior leaders and providers of services. It also suggests that ministers consider taking legal powers to make youth participation a condition of receiving any funding for anything which affects young people.
The report was full of praise for the way that the Wales Young Farmers' Clubs are organised. Young people were said to have a safe and supportive environment to try out their ideas, leading to increased confidence and skills.
Diane Davies, chief executive, said that the clubs were controlled by the members, who are aged from 10 to 26.
"Each club elects officers who sit on the county groups and it is the county groups who employ the staff and run the organisation," she said.
"This is the way we have always done things ever since we were set up 70 years ago. It is a truly bottom-up organisation."
Members could be seen involved in many different activities at the Royal Welsh Show at Builth Wells this week, where they had their own arena and stage. Events took place throughout the show and the organisation also ran a young people's village and a four-day music festival.
Youth councils have also been set up in some areas to give young people a voice. Bridgend was the first authority in the UK to inaugurate its youth mayor at the same ceremony as its town mayor.
Youth mayor Craig Lambourne, 16, said: "It's great. I have been on the youth council for two years and it makes me feel that I can make a difference and stand up for young people." Craig has accompanied the mayor to meetings and has also met the council leader to discuss issues such as homelessness and bullying.
The youth council has just made a video about anti-social behaviour orders, designed to be shown in schools and youth clubs.
"Lots of kids thought ASBOs were a joke," he said. "But our drama shows how serious they can be."