["International Journal of Urban and Regional Research, EarlyView. ", "\nAbstract\nConventional fiscal federalism posits subnational governments as ‘empire builders’ constantly seeking autonomy. We challenge this orthodoxy by documenting a counter‐intuitive phenomenon in the global South: ‘voluntary recentralization’. Focusing on Indonesia's fragmented decentralized landscape, we investigate why local governments in fiscal peripheries actively petition to surrender jurisdiction over high‐value infrastructure assets to the central state. Employing a comparative case study of fiscal extremes—juxtaposing the industrial core of Sidoarjo with the agrarian hinterland of Jember—we argue that under conditions of structural insolvency and the visibility paradox of viral politics, autonomy transforms into an unbearable spatial burden. We identify a causal mechanism termed the ‘threshold of viability’: when the risks of electoral blame and bureaucratic compliance paralysis exceed fiscal capacity, the rational strategy shifts from credit‐claiming to ‘defensive rescaling’. Surrendering authority becomes a survival mechanism to inoculate incumbents against the material politics of infrastructure failure. This study introduces the concept of ‘hollow autonomy’, demonstrating how symmetric decentralization designs inadvertently incentivize local governments to retain the trappings of power while strategically outsourcing core governance functions back to the center, creating a territorial trap for the periphery.\n"]