Is it the twilight of decentralization? Testing the limits of functional reforms in the era of austerity

Economic crisis and rigid austerity seem to have brought a long-lasting period of decentralization to an end. The comeback of centralist patterns offers the rapid implementation of austerity measures, while the lack of resources is challenging the sustainability of decentralized services. There is an obvious inconsistency between European decentralization policies, on the one side, and European austerity policies, on the other. Empirical evidence shows that local authorities were more responsive to citizens' demands for social services, but now municipalities without resources repulse decentralization. In spite of centralist patterns, case studies of fiscal consolidation have revealed a remarkable deviation of municipal responses to top-down fiscal policies. Visionary leadership, active citizenry and inclusive decision-making processes predict good performance, while reproductive leadership and a passive citizenry predetermine unproductive central-local conflicts over burden-sharing and blame-shifting.