This study attempts to reveal the way the Romanian mayors reacted to the major reforms in the local administration initiated by the government in 1998-99. Our aim is to explore what are the attitudes and values of this important sub-class of political actors, and what are their strategies for coping with the new situation. The paper is based on a survey of 430 local governments and three previous case studies of local budgets. We define four types of budgetary strategies and a set of institutional performance indicators (innovation, policy effectiveness, privatization, human resources, communication ability, attitude towards corruption) and analyze what are the factors that can explain the variation on these dimensions. It turned out that the mayors’ demographics (age, education, experience) do not influence performance on any indicator; nor does their party affiliation, on all but one indicator – corruption seems to be less tolerated by rightist mayors. The regional political culture (‘Transylvanian effect’) only improves the ‘soft’ aspects of performance, like communication capability and procedural effectiveness; on the ‘hard’ issues, such as budgets, privatization or, surprisingly, corruption, there are no differences associated with the region. Finally, the type of locality matters, but the biggest cleavage is not urban-rural, but small towns-big cities. The rural local governments look no less able than others to perform their duties effectively, while the real problems lay at the level of small towns, some of which are severely hit when decentralization’ side effects like the decrease in revenues and ballooning social obligations come on top of the existent high unemployment, poor infrastructure and lack of economies of scale for the local utilities.