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The issue of decentralization in the postsocialist countries of Central and Eastern Europe (CEE) has faded from the research agenda since the democratic transition and EU accession. Conventionally presented as a global policy goal for supporting local democracy, improved governance and reduced regional inequalities, decentralization has been met with uncertain results in less developed regions. EU Regional Policy, initially supporting decentralization and related regionalization processes in CEE, has met challenges in lagging regions facing institutional legacies and capacity limitations. Perceived failures of decentralization point to a trend of re-centralization of regional policy in CEE countries, on the part of both national and EU levels, potentially exacerbating the trend of increasing regional polarization within countries. The cases of Estonia and Hungary illustrate these tendencies, drawing attention to national responses and the need for a continued dialogue on institutional development and EU Regional Policy reform in order to better target regional inequalities.