This chapter analyzes Mexico's special brand of federalism and to assess, in historical perspective, the patterns of intergovernmental relations that have developed there. It is devoted to the political and administrative aspects of the municipality, the lowest level in the government hierarchy. Although Mexico is officially recognized as a federal system organized in a similar fashion to the US system, no one can dispute the extreme centralization of governmental powers in Mexico City. The special brand of federalism that has developed in Mexico dates from the pre-Hispanic period. The centralized nature of the Mexican political system is well known and widely researched. Intergovernmental relations are an understudied aspect of the Mexican political system. The most important mentor in the Mexican clientelistic structure is the president, whose control over state government is based on a wide variety of formal and informal powers.