It is possible to give a concrete meaning to the usually vague concept of decentralization by examining four core components. First, at the crux of decentralization is a downward shift in decision-making power. Administrative decentralization entails shifts internal to the institution. Political decentralization shifts authority to external forces such as community boards. These two strategies are not mutually exclusive. Second, studies of bureaucracies demonstrate that decentralization is compatible with strong leaders provided that leadership is exercised at lower levels in the administrative hierarchy. Third, decentralization requires the rejection of existing reward structures in favor of a system of incentives that establishes meaningful connections between professional conduct and rewards. Fourth, it is important to design a division of responsibility for ends and means among the district and schools that diminishes the role of explicit rules. Most school districts reflect few of these four principles, and their efforts and decentralization are often marginalized and incomplete. Experiences to date with site-based management, the most common attempt at decentralization, demonstrate the difficulty in producing authentic decentralization. (Contains 51 references.) (TEJ)