Public service provision has earned a clearer voice and sparked a renewed interest in the recent discourse of public administration. Conforming to this trend, since 1990s, Government of Bangladesh has also undertaken various policy initiatives to bring services closer to the rural people and to make them responsive through devolving authorities to the local government institutions. But in practice, most of these initiatives still remain confined to mere policy statements rather than seeing any meaningful decentralization of service delivery. This paper seeks to identify the gaps between the policy statements and their implementation, their consequences on the nature of service delivery and the underlying reasons for the prevailing gaps. As a case, the study looks into the delivery of public health services in rural areas. The study relies on both primary and secondary data. Primary data has been collected from both central and local levels while secondary data has been collected from relevant research articles, policy documents and government reports. Findings of the study show that despite the prevalence of the policies and other legal provisions favouring decentralization, health services at the local level are largely being provided through the direct central control, which severely affects the quality of services. Various legal weaknesses, control of central politics over the functioning of local government and local administration, lack of political will for localizing service delivery and the country’s highly centralized administrative system have been identified as the key underlying reasons for the poor localization of health service delivery in Bangladesh.