Managing large urban areas poses two main institutional challenges: decentralizing city governance to sub-municipal units such as districts to better respond to local needs and coordinating government action in fragmented metropolitan spaces. Spain faces these challenges in local governance without being able to solve either of them effectively. Within cities, the implementation of decentralized districts does not seem to have developed the potential for which they were intended. In metropolitan terms, the model provided by the national framework legislation has hardly been developed, and instead each metropolitan region has followed a different institutional arrangement with different degrees of legitimacy. As an example, while Barcelona displays a strong inter-municipal component and bases legitimacy on a multilevel and coordination logic, Madrid has chosen to steer the management of metropolitan affairs towards the regional level of government that enjoys more effectiveness than municipal inclusion.