The article discusses how countries around the world are looking into giving more financial power to local governments. This trend is not just in federal countries but also in unitary ones. The European Union shows the benefits of having a big market with regional identities, while the collapse of the Soviet Union warns about the risks of centralizing power too much. Decentralization is mainly driven by the need for better public services and is also linked to economic liberalization. In India, like in many other places, decentralization is a hot topic for debate.