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Enhanced autonomy of sub-national governments has spurred innovative management. Spending assignments across levels of government, however, often overlap and/or are not yet fully understood by most citizens. Sub-national governments’ accountability is further reduced by the heavy reliance on federal transfers while their use as collateral for states' borrowing potentially undermines the role of financial markets in disciplining fiscal behaviour. Getting the most out of decentralisation would thus require making sub-national governments more accountable so as to provide cost-effective public services and promote fiscal sustainability. Decentralisation should also be more consistent with the aim of improving interregional equity in obtaining access to core public services.