A policy coordination system is a complex network of agents, policies and institutions that are supporting the process of policy coordination. Smooth policy coordination enables synergy or at least prevents overlapping and conflicts of sector policies, which is increasingly important due to growing complexity of many policy issues. Moreover, policy coordination is crucial for the “strategic” (consistent with policy priorities) allocation of limited budget resources. Institutions play an important role in policy coordination because the extent of cooperation depends on both formal framework and de facto behaviour of the involved parties. This article analyses the policy coordination system in Latvia from the institutional perspective and proposes solutions for the promotion of comprehensive and coherent, whole government perspective instead of narrow and sectoral perspective.