Nearly all contemporary conflicts are driven in part by political marginalization.This political marginalization amplifies the consequences of economic and cultural marginalization. To craft a durable peace, the parties to peace negotiations often spend considerable time and effort crafting power-sharing arrangements that balance the pull of some parties for greater diffusion and devolution of political power with the pull of other parties to maintain a degree of political centralization, for the sake of efficiency and effectiveness, and to preserve their prior political privileges. This chapter explores the puzzle of whether and how to create a vertical power-sharing arrangement that leads to a durable peace. It reviews the peace processes related to conflicts in Bosnia, Colombia, Indonesia/Aceh, Iraq, Macedonia, Nepal, the Philippines/Mindanao, South Africa, Sudan, and Yemen to understand how parties have grappled with the thorny set of conundrums, including the choice of state structure; the allocation of legislative and executive powers among the levels of government; the degree of political, administrative, and/or fiscal decision-making authority to be devolved; and the timeline for implementing any agreed plan for decentralization.