The Indonesian economy strengthenedmodestly in third quarter(Q3). Economic growth was supportedby higher commodity prices, stronger global growth,rebounding international trade, and relatively accommodativemonetary and financial conditions. At the same time,domestic conditions improved, with tentative green shoots inprivate consumption and stronger domestic demand overall.This article addresses three main questions: (i) whathappened to local service delivery during decentralization?(ii) how do we move the needle on local governmentperformance in terms of provision of local services? and(iii) what design mechanisms can incentivize local leadersand sub-national governments to improve local servicedelivery?The authors offer three key policyrecommendations to help align incentives to promote servicedelivery performance by local leaders and public officials:i) implementing good practices for evaluating localgovernment performance; ii) embedding results-orientationinto intergovernmental fiscal transfers;l and iii) usetransparent and comparative local government performancedata to stimulate citizen engagement.