The European Structural Fund programmes are embedded in a multi-level governance system, which has grown in parallel with European integration. Decision-making power is increasingly delegated to territorial authorities on the assumption that local agents possess both contextual knowledge and political legitimacy to integrate different policy measures in a cooperative fashion. Within contexts of structural socioeconomic constraints, problems of coordination are associated with policy co-formulation, governance network management, meta-governance processes, and performance management and evaluation use. This paper aims to examine the variety of coordination mechanisms adopted by regional government agencies in order to collaborate with local authorities to stimulate economically lagging territories. The paper analyses management techniques of local organizational capacity and network building, project development, monitoring and evaluation, highlighting the rationale of regional development policies and the role of institutions. Building upon 2 years of field research on local development programmes in four regions in the south of Italy, this paper shows that cooperation co-exists with opportunistic behaviour during programme design and implementation, while bureaucratic culture and organizational weaknesses hamper managerial leadership and administrative decentralization. Findings highlight that centrally guided decentralization is a more sustainable capacity-building strategy. Furthermore, perceived efficiency, equity, uncertainty, and relational quality shape coordination and its evolution over time. Interpersonal relations may increase to reduce uncertainty, or higher procedural formalization may ensure efficiency, equity, and fair dealings. The evolution of coordination mechanisms has a bearing on administrative capacity of public spending absorption against corruption and waste as well as on the potential for economic development and social cohesion.