A Labour claim that families in Wales are better off since the assembly was set up thanks to its policies has been strongly rejected by the opposition.
Rhodri Morgan says devolution is "working for the people of Wales"
Welsh Labour leader Rhodri Morgan said a "representative family" was £5,000 richer with the "devolution dividend".
But Lib Dems said Labour had a "cheek" when several policies were a result of coalition with them, and Conservatives said Wales was the UK's poorest area.
Plaid Cymru said Labour had "failed the majority of people in Wales".
The row marked the start of the last full week of campaigning before voters go to the polls on 3 May.
Labour, which runs the assembly as a minority government with 29 of the 60 seats, hopes to win a majority and avoid recreating the coalition it had with the Lib Dems from 2000 to 2003.
Mr Morgan, who has been first minister since 2000, listed a series of changes which had brought "an even more prosperous and fair Wales, with more justice for our pensioners, a square deal for hardworking families and a great start in life for our children".
These policies included free prescriptions, free breakfasts for school children, free bus passes for pensioners and disabled people, and top-up fees paid by the assembly government for Welsh students studying in Wales.
"Devolution for Wales was hard fought and hard won," said Mr Morgan.
"But looking back over the past eight years I am more convinced than ever before that our assembly is working for the people of Wales."
But Jenny Willott MP, who chairs the Lib Dem campaign, said: "Labour have a cheek to claim the devolution dividend is down to them."
She said such schemes as free bus passes, and free museum entry were a result of Labour's coalition agreement with the Lib Dems.
Ms Willott also said baby bonds were "a Westminster policy which would have come to Wales regardless of who runs the assembly," while Labour had had to be "forced" into the student top-up fee policy by the other parties.
"Alongside the obvious benefits of devolution, people should consider the Labour let-downs: the broken promise on home care for disabled people; the failure to tackle the crisis in NHS dentistry, the U-turn on smaller class sizes," she said.
Nick Bourne, leader of the Welsh Conservatives, said: "Labour's arrogant self-assessment flies in the face of reality.
"Their so-called 'devolution dividend' has left Wales as the poorest part of the United Kingdom.
"It has left households across Wales paying more than ever before in taxes. It has left more patients waiting for hospital treatment.
"It has tied businesses up in red tape. And it has caused thousands of students to leave school without the basic qualifications needed to give them the best start in life."
Plaid Cymru leader Ieuan Wyn Jones said: "What Wales needs is a government that will deliver for all the people of Wales.
"Labour has no vision for the future of Wales and has run out of steam.
"Labour's assembly government has failed the majority of people in Wales, and only a new government can make a real difference."
Elsewhere, south Wales band the Manic Street Preachers joined the political debate in an interview in Big Issue Cymru.
The band's bassist and lyricist Nicky Wire told the weekly magazine that he thought people got the politicians they deserve.
"Society is a reflection of politics - if you are lazy and decadent you will get lazy and decadent politicians," he said.