In 1992, India enacted constitutional amendments, which mandated the establishment of local bodies in rural regions. These decentralization reforms were complemented by affirmative action measures to give voice to historically disadvantaged caste groups and women. Consequently, elected representatives have been responsible for providing and maintaining a range of rural services, such as drinking water facilities, village roads and sanitation. The main theoretical argument in favor of decentralized governance structures is that local representatives are more efficient and better able to match services with individual preferences. However, insights from systematic reviews of studies across India and empirical evidence from the federal state of Andhra Pradesh suggest that there is a striking discrepancy between the de jure and de facto governance of institutions. The overarching purpose of this research is to provide reasons for the puzzle that the outcomes with respect to inclusive service delivery in India's rural regions continue to be mixed, despite the government having implemented substantial local governance reforms. The research follows a pragmatist stance by updating mainstream conceptions of public choice with an extended institutional perspective. Hence, apart from rational choice institutionalism, the research draws on approaches that highlight ideational aspects and symbolic meanings of institutions. Further, insights from the cognitive and social psychology literature are employed for theorizing the motivations of actors and for unpacking various governance dilemmas in India's local service delivery system. Ultimately, additional policy measures and sanctioning mechanisms need to be adopted to render decentralization reforms effective.