This report assesses Sri Lanka'sexperience with decentralization to date and discussesoptions for decentralization and implications for servicedelivery in three sectors: roads, solid waste and health.The selected sectors illustrate the considerations relevantto the decentralization decision and its future direction.The services selected cover a range of central, provincialand local responsibilities in delivery and illustrate howthe cause of success or failure of service delivery isrooted in the institutional framework, division ofresponsibility, funding mechanisms i.e. incentives andaccountability. The effective provision of these servicesrequires a clear understanding of the service deliverygoals, technical capacity, adequate assets and recurrentinputs to deliver services. Each sector has its particularneeds and to some extent can be considered independently,but the political realities effectively require that anyconstitutionally mandated and elected level of governmenthave some corresponding responsibilities.