Parts II and III contained primarily empirical chapters opening the black box of local government for detailing capacity and accountability. Part IV builds on this empirical material to theorise the relationships that constitute de facto decentralisation and how politics, institutions and policies together forge capacity and accountability.

Chapter 7 assimilates the empirical insights from previous chapters to theorise decentralisation. It looks closely at the literature and presents a definition of de facto decentralisation that emphasises autonomy and capacity. Theorising this concept involves exploring relationships between elected representatives and bureaucrats in local and state governments. The chapter also surveys the literature on capacity and explores the conceptual connections between autonomy, facilitation and capacity.

Chapter 8 focuses on decentralisation policy, that is, the formulation and implementation of a framework and actions to create a new tier of government, which is more than merely delegation of authority by the devolving government. Discussions and detailing of decentralisation policy have been completely outside the space of local government and within that of state and national government. The chapter traces the implementation of decentralisation policy after the spirit and intent was laid down through national constitutional amendment. It explores processes of lawmaking, setting up of rule-making authority, creation of rules of local government functioning – and oversight over all these to ensure against policy drift. Effectively, these shaped the patterns of state–local relations and capacity described in Parts II and III.

Chapter 9 weaves together the understanding developed in previous chapters to consider how to effectively implement decentralisation policy in Indian contexts. It takes a broad policy perspective rather than being confined to the perspective of any one policymaker or policy organisation. The chapter suggests possible changes that can be made feasibly in Indian contexts regarding specifics of laws and particularly rule-making authority. It also considers pragmatic ways to reset state–local relations to enhance local government capacity through autonomy and facilitation. And it underlines the critical role of community mobilisation and how policy instruments can strengthen it by respecting spaces of participation and contestation.