This article evaluates the implementation of Mexico's Municipal Reform of 1983 in three states: Chihuahua, Oaxaca and Yucatán. The research focuses on one element of the reform, the transfer of public services from the state to the municipal level. The case studies were selected to examine the impact of two key variables on reform outcomes: fiscal capacity and partisan control of state and municipal governments. Counter to expectations, the reform has not advanced more in municipalities with greater fiscal capacity. Also counter to expectations, there is no evidence that devolution advanced more in municipalities controlled by the opposition. This is due to the fact that state governors have a high degree of discretion that allows them to block implementation for partisan motives rather than rational/technical ones. The Municipal Reform of 1999 attempts to remedy this problem by limiting gubernatorial discretion while increasing the legal recourse municipalities have in soliciting the transfer of services. This recourse includes filing suit before the Mexican Supreme Court.