The decentralization principle is regarded as one of the basic constitutional principles of the Republic of Italy. It is often perceived by the Italian doctrine as an essential, and even a constitutive, element of modern democracy, owing to its capacity to enable local communities to directly participate in the performance of public functions. In the Italian literature of the subject the distinction is made between a political (or constitutional) decentralization and an administrative decentralization. The former relates to transfer of power by the State to different units, mostly regional and local ones, made usually by means of statute having the constitutional rank. It is also perceived as a higher, improved level of the administrative decentralization. In the case of administrative decentralization, it consists in the transfer administrative functions only and on the basis of ordinary statutes (laws). The notion of administrative contains bureaucratic, management and autarchic decentralization. The decentralization taking place in the 1990s in Italy within the framework of the Bassanini's reforms was mainly of autarchic and, partly, bureaucratic nature. It consisted in conferring administrative functions on regions and local authorities according to subjective and territorial criteria. The State has retained the so-called national interests and those administrative functions whose exercise in a given territory was considered as impossible. As a consequence, a large number of powers were delegated, and the presumption of competence of regions and local authorities was adopted. In result of the amendment of the constitution in 2001, a new stage of decentralization process was initiated. The reform enabled the development of a new model of regionalism, containing some attributes typical of federalism, including statutory autonomy, specification of exclusive competencies or adoption of the principle of cooperation between the executives of particular levels and the principle of territorial representation. This resulted in a transition from the 'old type' model of regional state to the formula of the so-called neo-regional state and may be interpreted as opening the way to further federalization of Italy.