Despite its impressive export-growth performance and sizeable inflows of FDI during the 1990s, Mexico has been unable to alleviate the social and regional disparities that exist within the country. The differences in enabling assets are pertinent to the varied paces of development across Mexico's regions and highlight the existing divide between several parts of the Centre-North and the South-Southeast, where the majority of the population continues to live in poverty. The co-existence of a high concentration and dispersion of the population and economic activities poses further policy challenges for increased balanced economic development across the country. This territorial review of Mexico evaluates the emerging territorial development strategies as well as the relevant changes in governance, such as new horizontal and vertical co-ordination mechanisms, that are being introduced in conjunction with improved federal arrangements. In particular, the review focuses on three policy objectives that are considered as having the greatest priority in confronting and redressing Mexico's stark regional disparities: alleviating poverty, fostering competitiveness and enhancing connectivity. The territorial review of Mexico is integrated into a wider programme of national and thematic regional reviews undertaken by the OECD Territorial Development Policy Committee. The overall aim of the thematic regional review series is to provide practical policy advice to governments focusing on three themes: multi-level governance, sustainable development at local and regional levels and regional networks for competitiveness