A decentralized, partnership approach to dealing with environmental hazards is advocated in international policy documents, but the capacity of local governments to formulate and implement disaster risk reduction (DRR) strategies is uneven and not well understood. Small municipalities are often believed to lack the necessary financial, human and administrative resources to carry out measures to reduce disaster risk. This paper examines DRR practices in five municipalities exposed to hurricanes in the Yucatán peninsula, Mexico. Using a comparative case study method, performance is measured with respect to five indicators of DRR that were identified by stakeholders as being ‘municipal government responsibilities’: effective use of risk maps; publication and enforcement of by-laws and regulations; design and application of risk communication systems; coordination of preparedness measures and evacuations; and shelter management. The two smaller municipalities with few financial resources are found to have undergone substantial improvements in most aspects of DRR, outperforming larger municipalities facing similar risks. This suggests that factors beyond the level of funding determine the effectiveness of official DRR measures. In Mexico, decentralization and local governance reform have proved to be critical, creating opportunities for more inclusive, effective approaches to reducing the risks associated with hurricanes.