At present, the direct election of municipal heads has been canceled in most Russian regions, which practically completed the integration of municipalities into single, top-down model of governance. These institutional reforms caused changes in the factors determining the development and management effectiveness of municipalities. We have conducted a comparative analysis of six urban districts in Perm Krai to show that the effectiveness of the municipal administration is mainly stimulated by a constellation of informal, economic, and institutional factors. The presence of a regional actor that exercises patronage and control over a municipality counts as “informal.” An economic factor is represented by the absence of major city/town-forming business companies, which stimulates the city administration to actively raise additional funds through regional development programs. Finally, an institutional factor is the pressure exercised by independent local-council members. The constellation of these three factors determines the effectiveness of a local administration in the context of centralization. We use municipal statistical data, as well as semi-formalized interviews with 39 respondents collected in the six urban districts under study as an empirical basis to verify and prove the stated theoretical propositions.