A bungee reign encourages your horse to work long and low. This helps to strengthen the neck, back and hind quarters of the horse as they are encouraged to use their muscles more effectively. It also helps in building the foundation that helps your horse work in a shape or on the bit. All of this will be done without rider interference, therefore it is much more beneficial to your horse and the work that you are trying to achieve.
The bungee works on a simple reward system. If your horse braces against the bungee it is uncomfortable, it puts pressure behind the ears and pulls on the bit. If the horse lowers his head the bungee goes slack and the pressure releases from behind the head and off the bit. Once the horse figures out that all the pressure is released by relaxing into a shape they begin to work in an outline and all of the muscles are working properly now.