This report analyzes, through a reviewof the regulatory framework, case studies, and internationalexperiences, current arrangements for coordination ofgovernment programs in priority regions in Mexico, as wellas opportunities for better addressing the development needsof those regions via enhanced coordination. The broadhypotheses underpinning the analysis are: 1) Poorcoordination (within government and between government andcivil society) impedes the effective use of governmentresources (and the mobilization of private ones) in backwardregions. 2) Participatory planning fora at the regional(i.e., inter-municipal) level may provide an institutionaland operational framework through which those impedimentscan be removed. The report is organized as follows: Chapter2 reviews the recent evolution of regional developmentpolicies. Chapter 3 develops a conceptual framework foranalyzing horizontal and coordination problems as theyrelate to regional policies. Chapter 4 discusses thenormative framework for coordination developed inMexico's laws and regulations. Chapter 5 analyzescurrent challenges to, and opportunities for, effectivecoordination in Mexico on the basis of four case studies.Chapter 6 discusses international experiences withhorizontal and vertical coordination in several LatinAmerican countries, as well as the relevance andapplicability of those lessons to Mexico. Finally, chapter 7develops tentative recommendations.