The aim of this paper is to show possible impacts of fiscal decentralization on economic growth and stability. In an era of progressive globalization the phenomenon of fiscal decentralization is often promoted as an instrument of achieving higher levels of economic efficiency and economic growth. While theoretical perspective strongly advocates for positive impacts of fiscal decentralization on growth, recent empirical studies yield variable results and cannot be used as argumentation for theoretical approach. Variable results of empirical studies have a very wide range; from a positive and significant impact, through a connection in the form of a hump to a neutral or negative impact of fiscal decentralization on growth. By conducting analyses of these conflicting test results throughout the paper it is shown that the influence of further implementation of fiscal decentralization in developed economies leads to negative economic growth, while the situation with economies in transition is completely opposite. However, taking into account Theissen research, it is evident that the aim is to swiftly resolve any ambiguities related to the process of fiscal decentralization and to implement a new paradigm that will be built on the link between previously presented conflicting currents of empirical research.