Democratic decentralisation is a stated goal of many African countries, but there are considerable institutional and political challenges involved in making it a reality. Even where official government decentralisation programmes are underway, many central agencies may be reluctant or unwilling to share significant powers with local governments. Overcoming local elite capture and generating genuine local participation can also be extremely difficult. This article reviews basic institutional and political mechanisms intended to facilitate effective decentralisation and intergovernmental fiscal relations, including legal, constitutional, fiscal and managerial reforms. It also explores the challenges of developing institutional mechanisms for hierarchical control and internal accountability which are potentially subject to considerable abuse. Particular attention is given to the development of external accountability through local elections, appropriately defined local government structures and operations, appropriately sized local government jurisdictions and various direct voice mechanisms that have been used to various degrees in Africa. Copyright © 2003 John Wiley & Sons, Ltd.