Comparative analyses of welfare systems have largely proceeded on the basis that coherent nation states exist. This assumption was always problematic, as many theorists have acknowledged, because of the potential variance within the national context in terms of social policy. In the case of Mexico, this is particular true. Though residing in national context which acute constitutional limitation vis-à-vis the Mexican federal government, Mexico City has a special status flowing from their central role in the national economy, political and cultural life and, most relevant, in social policy innovation. Mexico City has implemented a rights-based approach of social policy, which has been explicitly positioned as an alternative to the neoliberal model imposed by the national government. Furthermore, Mexico City´s social policy has been emulated by other states and –to lesser extent— by the federal government. The aim of this paper is twofold. First, it will discuss the relevance of taking into consideration sub-national variance in terms of social policy in Mexico and Latin American contexts. Second, by examining the case of Mexico City, this paper tries to explain the potential role of sub-national entities in promoting social policy changes at national level.