The analysis of urban governance in terms of networks, as developed in the UK by scholars including Rhodes and Stoker, can be applied to a context such as Mexico if due weight is given to macro-level processes. In this article, careful attention is paid to the institutional legacies of Mexico's past authoritarian regime and how they are challenged by a new discourse of neoliberalization, decentralization and democratization. Corporatism, social segmentation and organizational fragmentation in the past have resulted in the continuing importance of hierarchical modes of governance alongside networks. Case studies of the public-private partnerships involved in the regeneration of the historic centres of Querétaro and San Luis Potosí show that new forms of governance entail a mix of continuity and change. Regeneration partnerships were initiated and largely funded by the local state, with the state retaining considerable power. Most of the non-state participants were drawn from the old aristocracy and business and professional organizations, whilst the increasingly autonomous groups of street traders and 'ordinary' citizens concerned with the life in the city centre were excluded. Nevertheless, new discourses challenge the institutional legacies of the past, encouraging institutional change. Copyright (c) 2009 The Author. Journal Compilation (c) 2009 Joint Editors and Blackwell Publishing Ltd.