Abstract: This paper examines the influence of decentralization on some aspects of local and regional planning, namely the regional planning process, and resource mobilization and allocation. The paper finds that, contrary to theoretical expectations, the existing planning process is not capable of creating multi-sectoral plans and enhancing popular participation. Though decentralization has enabled regional governments to collect and use revenues from their regions, regional financial capacities are limited. In order to compensate for the deficiencies, central government allocates grant money on the basis of equity biased criteria. Grant allocations, however, need to consider the trade-off between equity and efficiency. Resource allocations by regions revealed that backward regions devoted most of their resources to social development though these regions could not yet attract private investment. The future of local and regional planning in the country needs strong and coherent local and regional policies that identify the nature of popular participation, the means to enhance resource mobilization and the planning methodology to be followed.