Decentralization as a method for tackling regional disparities has been implemented in countries throughout the world in the last two decades. Some scholars have noticed that decentralization is a multi-dimensional concept. However, there is still no consensus about the dimensions’ selection. In this book, based on the measurable and comparable principles, the relationships between three dimensions of fiscal, administrative and welfare decentralization are considered, and the evolution of regional inequalities in OECD countries and in China are explored. Economic data of 26 OECD countries (17 relatively rich countries, and 9 relatively poor ones) during the period from 1996 to 2009 was used to formulate regression models. It was found that fiscal decentralization, especially the decentralizing of tax authorities in relatively backward countries, has been associated with a significant rise in regional disparities. Moreover, according to the statistical results for the countries in the sample, welfare centralization and suitable local government size can lead to a reduction in regional disparities. In the case of China, data analysis and institutional one were paired in order to assess the dynamic relationships between decentralization and regional disparities (from the three dimensions mentioned above). An unstable, nonstandard and asymmetrical fiscal decentralization system directly results in regional disparities, which can be strengthened by a highly decentralized public service delivery system. In addition, rigid government size, segmented government structures and ‘yardstick’ competition mechanisms (used for creating competition among local governments) hinder coordination and cooperation in and among regions, and further exacerbate regional disparities.