This brief examines how the process of decentralization by devolution in Tanzania affects local democracy and the efficiency and effectiveness of service delivery. The most common arguments for democratic decentralization in the literature are two, an efficiency argument and a normative argument. The efficiency argument is based on the fact that knowledge about needs and challenges in the local communities, and thereby the ability to act on that knowledge, is embedded better at the local administrative level. Local governments can interact better with local citizens than central governments due to their geographic proximity. People’s demands and needs are channelled to public officials more easily than in a centralized system. The normative argument for decentralization is one of democracy: true decentralization involves the devolution of real power: elected local councils can decide over the allocation of resources in their respective units. In that way, people can decide how local resources should be spent and hence they can influence decisions about resource allocation that have a direct impact on their lives.