This project aims to understand how institutional conditions shape the performance of local health systems in developing countries. The problem motivating the project is the inability of health systems in many countries to prevent disparities and human suffering. Decentralization reforms, premised on local institutions providing public services better than central governments, are a common response to this problem. However, theoretical arguments for health sector decentralization are underdeveloped and empirical results inconsistent on whether reformed systems produce healthier communities. This project's guiding question is: Why do some local health systems perform better than others? I propose to address this question in two steps. First, I build on the idea of polycentric governance to develop a context-sensitive theory linking governance structure to community health through individual and organizational behavior. Specifically, I hypothesize that decentralized governance will improve performance only in health systems with high densities of ties among local actors and strong organizational links across levels of government. Second, I will assess this theory through a comparative subnational research design involving original data collection in Guatemala, Honduras, and Nicaragua. I focus on decentralization reforms because they change the composition and augment the powers of institutions involved in community health; in short, they change governance structure. Leveraging this external variation and grounding my project in ideas of polycentricity allows me to systematically investigate the effects of governance structure on community health. My research in Honduras is supported by the National Science Foundation, and I am requesting funding from the SSRC to expand my work to Guatemala and Nicaragua; this support will enable a deeper assessment of my theory and help improve our collective understanding of governance and community health in developing countries.