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Decentralization has been promoted as a strategy to bring decision-making closer to local levels where people know better their needs. In the health sector, however, the evidence for its effectiveness has been mixed. This PhD thesis analyzed the effectiveness of decentralization in improving the health sector by focusing on the Philippines where health services were decentralized through devolution to local governments in 1992. Drawing from the “decision space” approach and using mixed methods, this thesis determined the conditions that enable decentralization to be effective by analyzing the perspectives of decision-makers in the Philippine health system. Decision-making was explored in the functions of: planning; financing and budget allocation; program implementation and service delivery; management of facilities, equipment, and supplies; health workforce management; and data monitoring and utilization. The interplay between decision space and capacity and accountability in optimizing decision-making for these functions was further analyzed. The thesis then developed a systematic review protocol to assess the global evidence on decentralization’s effectiveness. This thesis concludes that changing the structure of governance through decentralization will not enhance service delivery unless certain conditions are met. It is recommended that decentralized countries like the Philippines emphasize capacity building of local decision-makers to perform their functions better, enforce accountability mechanisms to promote good decision-making at local levels, and deploy a combination of decentralized and centralized functions that will …