The empirical research that has shaped this book was drawn from a combined literature stream comprising political psychology, applied economics, and public management issues such as decentralization, local government finance, local governance, and organization and budget theories. The principal premise of this monograph is that a greater autonomy of the local state helps improve the effectiveness of decentralization and good local governance. Bearing in mind the broader challenge of problems with decentralization in Bangladesh, the main research concern here is the exploration of nature, cause, and consequences of a specific deep-rooted problem – the dimensions of influence and magnitude of autonomy in budgeting decisions of local government Union Councils in Bangladesh. The study explores the de facto and de jure issues that affect the autonomy of local government Union Councils of Bangladesh in their budgeting decision-making process, leading to poor or good local governance. The study looks at how and to what extent the budgetary autonomy of local government Union Councils is affected. It also explores the impact of this autonomy on local governance.