This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book analyzes Mexico's efforts to decentralize political power and administrative decision-making during the 1982-1996 period. It discusses the nature of federalism in Mexico and how the political system has evolved into one of extreme centralization. The book sets the background for understanding the imperatives of decentralization. It focuses on the discussion of the need to decentralize political and economic power away from Mexico City and provides an overview of the efforts to decentralize undertaken during the last five presidential administrations. The book explores how the character of intergovernmental relations has affected the implementation of decentralization specifically in terms of intergovernmental finances. It offers a detailed analysis of the financial structure of a typical municipality and analyzes the implementation of the plans, programs, and institutions created as a result of decentralization.