Chapter 4 maps the developments in the region in terms of decentralization and documents how territorial self-governments evolved. The chapter addresses core questions such as: “How has the level of decentralization in the region developed and changed?” “To what extent have the principles of the European Charter for Local Self-Government been implemented in the region?” and “How do fiscal decentralization mechanisms function in the region?” The most important source for this chapter is the “Monitoring Reports” prepared for and approved by the Congress of Local and Regional Authorities of the Council of Europe. The chapter shows that subnational structures differ across the region. Some smaller countries do not have regional self-government levels, and territorial structures vary from significantly fragmented to significantly amalgamated. All CEE countries have signed and ratified the European Charter of Local Self-Government, but only the Czech Republic does not consider itself bound by some articles. However, compliance with the principles of the Charter varies significantly between countries, with Hungary as the most deviating country today. The percentage of subnational expenditures from total public expenditures ranges from 32% in Poland (with approximately 80% of this sum representing municipal expenditures) to 13.4% in Hungary (which dropped by half during the decentralization process). In most countries, a significant portion of municipal revenues still comes from the state level through shared taxes and transfers.