Contemporary decentralization discourse and recommended practice focus on political decentralization. However, experience with such devolution has often failed to produce the anticipated developmental returns. This has prompted reconsideration of managerial or administrative decentralization (deconcentration) as a vehicle for improving services and encouraging popular participation. A range of potential benefits is available from deconcentration. Cambodia has embarked on a cautious policy of decentralization involving weak devolution and deconcentration. But it is from deconcentration that the government expects the greatest developmental gains. Initial results are encouraging but difficulties confront the deconcentration experiment. These include the piecemeal nature of the initiative, unfamiliar financial management practices, deeply embedded patterns of hierarchy in society and state, and limited managerial capacity. Nevertheless, it appears that incremental deconcentration may offer a useful policy alternative for countries such as Cambodia which are engaged in slowly building the infrastructure of a modern state following debilitating internal conflict. Copyright © 2002 John Wiley & Sons, Ltd.