Since the early 1990s, Saudi Arabia has placed great emphasis on political and administrative reforms in order to strengthen local authorities and create more opportunities for citizen participation in decision-making. Therefore, it is important to inquire to what extent the intended goals and objectives of these reforms have been achieved and what their impacts on the efficiency and the effectiveness of municipal authorities in managing local development and service provision have been. This study seeks to examine the impact of recent political and institutional reforms on the responsiveness of local authorities and their effectiveness in managing local affairs and services, particularly in light of the 2005 municipal elections and the new structure of municipal councils. It is here argued that these political and administrative reforms have put into effect a more enabling institutional framework for measures and practices of good governance and decentralization but that their success is conditioned by the capacity of local authorities to adopt, practice, and maintain these measures. The focus of this study is on the practice of local elections and their implications for decentralized local governance and citizen participation; it is supported by investigative research into the interaction between local authorities and local citizens, as understood in light of responsiveness of local authorities and the newly established local councils. The findings indicate a large gap between large urban and small municipalities (amanats), in terms of financial capacity, citizen participation, cooperation with the private sector, and in terms of administrative capacity. This gap extends to amanats' institutional performance and outcome, particularly in terms of municipal business and construction, developed municipal areas, and municipal roads. In general, the findings of the study confirm that sub-national demographics and socioeconomic variations play a vital role in determining the capacities of local authorities to fulfill their responsibilities.