Background The concept of decision space holds appeal as an approach to disaggregating the elements that may influence decision-making in decentralized systems. This narrative review aims to explore the functioning of decision space and the factors that influence decision space. Methods A narrative review of the literature was conducted with searches of online databases and academic journals including PubMed Central, Emerald, Wiley, Science Direct, JSTOR, and Sage. The articles were included in the review based on the criteria that they provided insight into the functioning of decision space either through the explicit application of or reference to decision space, or implicitly through discussion of decision-making related to organizational capacity or accountability mechanisms. Results The articles included in the review encompass literature related to decentralisation, management and decision space. The majority of the studies utilise qualitative methodologies to assess accountability mechanisms, organisational capacities such as finance, human resources and management, and the extent of decision space. Of the 138 articles retrieved, 76 articles were included in the final review. Conclusion The literature supports Bossert’s conceptualization of decision space as being related to organizational capacities and accountability mechanisms. These functions influence the decision space available within decentralized systems. The exact relationship between decision space and financial and human resource capacities needs to be explored in greater detail to determine the potential influence on system functioning.