This chapter explains how and why decentralization policies were implemented since 1983 in Mexico, the analysis should focus on the inter-and intra-class relations within the context of the hegemony crisis of the post-war economic development. It examines the crisis of the late 1970s and maps out how class relations were shaped by development policies and centralized interest representation mechanisms of the import substitution (IS) strategy. The pre-revolutionary history as well as new forces, alliances and conflicts emerging from the Revolution shaped state institutions in Mexico thereafter. In Schmitter's framework, the state is treated as being outside conflicts rooted in the economy and civil society. The industrial, commercial and financial bourgeoisie based in the Valley of Mexico were especially privileged in receiving IS subsidies, fiscal incentives and credits. The Spanish crown aimed to establish a centralized state as an effective means of controlling and optimizing the extraction of resources.