The study theoretically as well as empirically attempted to find out how participation of the citizens, accountability, mechanisms of the complaint handling as well as transparency shape the downward incentive for the local leaders to perform in the favor of the citizens. Theoretically these concepts had found to be positively associated with decentralization and hence better local services as results. At Empirical level, a qualitative research design is synthesized along with documentary evidence from the two selected local governments. Primary data was collected using in-depth interview of 39 respondents from the selected local governments. The primary data was supplemented with review of relevant documents namely reports. The results of the study suggest that comparatively local governments were found to be more transparent and accountable. Sewerage, Infrastructure, Schooling as well as Health sectors witnessed enormous development. Additionally, during local governments very strong political participation was experienced from both citizens as well as political parties. There is also active participation of citizens in public meetings and participation in civil society organizations is found to be more active. However Institutionalization of local government was long way to go yet, public accounts committee as well as other institutionalized channels for participation and complaint handling could not perform at all. It was also found that informal accountability mechanism greatly impact local government accountability and mostly studies has not considered it in context of decentralization in developing countries where formal procedures have always created delays and discomfort. Supervisor:- Dr. Junaid Alam Memon