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A first generation of studies of the causes and consequences of decentralization and federalism viewed decentralization as a simple zero-sum transfer of authority from the center to subnational governments, drew upon the assumptions of welfare economics and public choice theory, and employed blunt measures of expenditure decentralization and federalism. More detailed pictures of decentralization and federalism that help explain the growing disjuncture between theory and cross-national evidence can be obtained by defining several alternative forms of federalism and fiscal, policy, and political decentralization, then measuring them and exploring interrelationships across countries and time. This approach points the way toward a second generation of more nuanced empirical research that takes politics and institutions seriously.