The study's primary purpose is to provide background and analysis on existing realities in Uzbekistan as input into USAID's thinking in respect to the timeliness and appropriateness of local government assistance. This assessment addresses the basic legal institutional framework for subnational government in Uzbekistan. It also describes how the central and respective local government tiers interact in practice and, how, at the municipal level, government is organized and operates, most importantly in respect to budgeting and the delivery of basic urban services. In addition, the assessment examines the role of mahallas (a traditional, neighborhood-based form of community self-governance) which have largely been absorbed into the system of state administration. The authors hope that the report will also serve as an informational resource for other parties interested in improving the effectiveness and responsiveness of local government in Uzbekistan.