Since the early 1980s, decentralization has reemerged as a valued political and economic goal in most developing countries. Institutional economics and public-choice literature indicate that decentralization has the potential to achieve greater efficiency and equity in public decision making by internalizing externalities, deploying all available information, and better matching service provision to needs. In this paper, the authors suggest that representation and accountability are critical if devolved powers are to serve local needs efficiently and equitably. The authors conclude, analyzing four case studies, that the presumed benefits of decentralization become available to local populations only when empowered local actors are downwardly accountable. Actors, powers, and accountability emerge as essential elements of a framework that can help evaluate the effectiveness of decentralization.