This chapter presents an overview of the formation of the local state institutions and social relations in Tabasco, and it explores how such institutions and relations have been shaped within the state's geographical location and the natural resources. The geographic characteristics of Tabasco have been an important determinant of the formation of local class relations and the local political institutions. The local policy-makers took the initiative to join an international organization, World Energy Cities Partnership, which aims to increase the collaborations of 'energy cities' around the world. The experience of Tabasco provides insight into how corrupt and authoritarian local regimes emerge with the decentralization policies. It shows that strong state institutions cannot facilitate the emergence of the local pluralism. Development based on the expansion of PEMEX activities increased the environmental degradation which had a direct negative impact on the livelihood of fishermen and peasants.