This chapter offers an explanation for policy change towards decentralization and the possible outcomes of the decentralization process. Both Mill and Tocqueville argue that active participation into politics nourishes the public spirit and give individuals collective strength. In the context of the crisis of the world economy of the late 1970s, Mill's and Tocqueville's ideas were reformulated by neo-classical orthodoxy blending with 'free market' dogma. The liberal-individualist approach advocates that decentralization increases the efficiency of local level politics because the participation of local actors, especially the private sector, in politics 'make necessary public functions more efficient and less subject to bureaucracy, clientelism and administrative corruption'. Liberal-individualists argue that decentralization leads to democratization by bringing decision-making closer to civil society. In the 1990s, accumulated research concerning the outcomes of the decentralization policies, especially in Latin America, revealed that there was no direct link between decentralization and democratization in practice.