As increasingly large shares of the developing world’s population come to live in cities, it is important to examine the effects of political, fiscal, and administrative decentralization on urban governance and service delivery. Relevant academic scholarship and policy research, we show, suggests that clientelism, populism, and local capture often persist following the establishment of municipal elections. However, conditions such as political competition, independent fiscal resources, and strong civil societies can facilitate more democratic outcomes following decentralization. Meanwhile, our review of literature on decentralization’s impact on two quintessentially “urban” services—land market regulation and urban water and sanitation—suggests that decentralization involves important trade-offs. On the one hand, decentralization can help citizens to pressure more effectively for inclusion and access, particularly in the presence of political competition and a robust civil society. On the other hand, it can make it more difficult for policymakers to address metropolitan-level or long run concerns regarding investments in basic infrastructure that are often not at the forefront of voters’ minds. We also highlight the need for primary data collection, suggest research design strategies that would allow for more rigorous empirical analyses, and highlight important topics that have received very little attention.