This chapter discusses the various approaches that national and sub-national governments have adopted to improve co-ordination among levels of government for supplying services and infrastructure tailored to the specific needs and opportunities of sub-national territories. The impact of economic downturn on sub-national governments and the national stimulus packages reflect an accurate illustration of this topic. The crisis is having a large negative impact on most sub-national governments’ finances due a “scissor” effect: tax revenues falling sharply as a consequence of the fall in activity, while welfare expenditure soars. Regional authorities may consequently decide to reduce their investment spending. In order to avoid such a pro-cyclical behaviour, most national stimulus plans have a regional public investment support dimension. For this to be successfully implemented, effective co-ordination between levels of government is necessary. This chapter first examines the basic institutional and financial elements of sub-national authorities’ mandates and resources. It then focuses on the use of specific instruments for co-ordination and capacity building in regional policy: contracts, collaboration between municipalities and the use of performance indicators.