Slovenia is shifting the focus of regional policy from “passive” redistribution to a more pro-active emphasis on enhancing sustainable growth in all regions. However, much remains to be done in terms of translating this shift into policy instruments and institutional arrangements. Many of these challenges have become more acute as a result of the crisis and the need to balance fiscal consolidation against support for a still-fragile recovery. The recently adopted Law on Balanced Regional Development addresses some of these issues, but much will depends on how the law is actually implemented. This chapter starts by identifying three key challenges to effective multi-level governance: capacities for regional policy, municipal fragmentation and relevant scale for regional policy, and the lack of information for regional growth. Section 3.2 assesses how Slovenia should address these challenges and proposes concrete steps to be taken in a number of areas.