Since the 1980s, many developing countries have introduced decentralization polices in varying forms and to various degrees. Philosophically, decentralization has been linked with the improvement of governmental performance as well as with the increased participation of people in decision - making processes. But while decentralization has some generic benefits, analysis of its diverse processes needs to, be contextually specific. With this view, the present paper explores the dynamics of decentralization in the context of Bangladesh from 1982 to 2001. Against the backdrop of sweeping political and economic changes at the national level, we examine the underlying processes driving local government reforms during the period. The paper argues that the restoration of democracy in 1991, contrary to expectations, was insignificant with regard to the introduction of decentralization reforms based on devolution and participation and that, in fact, the military government in power between 1982 and 1990 implemented the most wide-ranging changes in the structure of local governments. The authoritarian regime's decentralization policies can be explained by its increasing search for legitimacy and its need to create a rural power base; whereas reforms undertaken by both '' democratic '' governments in the 1990s were characterized by a tendency to maintain the status quo - and in some cases were actually retrogressive.