This chapter examines the capacity of the local government to exercise their powers and responsibilities stemming from their legal authority and budgetary capacity. The chapter looks into the system of the fiscal equalisation and the budgetary decision-making process, as well as into the impact of transfers of financial and human resources following the transfer of responsibilities between tiers of government. Finally, the chapter offers an analysis of evaluation systems in Kazakhstan and provides actionable recommendations on measuring the performance of local executive bodies and developing evaluation criteria that are better aligned to the roles of local government and the demonstration of outcomes to citizen.