The reconstruction of Latvia’s public administration post 1990 was complex and contradictory, transitioning from pre-occupation administrative traditions to a Western-style framework. The 1995 EU accession efforts added another layer of reforms, straining coordination further despite EU assistance. National and local levels often viewed each other as political rivals, impeding effective intergovernmental coordination mechanisms. Latvia’s government, seen as an effective crisis manager during the 2008–2009 economic crisis and the COVID-19 pandemic, hesitates to tackle current issues in education, healthcare, and the judiciary. Despite growth in financial services and technology sectors, the economy lags behind its Baltic neighbours in GDP growth. This chapter explores Latvian central–local relations’ vertical and horizontal dimensions and the interplay between administrative reforms and economic policies in a small state context. Latvia’s ambitious public administration reforms, driven by EU accession requirements, aimed at establishing a comprehensive coordination framework but faced implementation challenges due to the interplay of formal and informal rules. Effective intergovernmental coordination remains crucial for achieving policy coherence and integrating reforms, particularly at the local level. Continuous evaluation and better inclusion of local voices in national decision-making processes are necessary to address these challenges and ensure successful governance.