In the context of liberalization and the increase in poverty that has characterized both Mexico and Peru over the last two decades, decentralization has been presented as offering new leverage for economic development. It has also been seen as an important way of consolidating democracy. A comparative analysis of these two countries reveals very distinct policy implementation and suggests paths for the study of how both have sought to regain political legitimacy. Both countries are prone to the tight control of wealth distribution nationally. Yet beyond differences between them, neither Mexico nor Peru has managed to truly consolidate democracy, and none has come to truly share power with other levels of governments. However, the Mexican State now enjoys improved legitimacy thanks to a redistributive policy that benefited the poorest quarter of the population. Meanwhile, the Peruvian State is noted mostly for policies aiming to achieve favorable conditions for foreign investment in extractive industries. In both cases, democratic representation has been severely weakened.