Bob Jessop is Professor of Sociology atLancaster University, United Kingdom.His address is: Department of Sociology,Cartmel College, Lancaster University,Bailrigg, Lancaster LA1 4YL, UK, email:r.jessopKlancaster.ac.uk His currentresearch interests include state theory,institutional economics, contemporaryBritish politics, economic developmentstrategies. He has recently completed aresearch project on economic and socialrestructuring and local governance in twoEnglish regions.

The rise of governance and therisks of failure: the case ofeconomic development

Bob Jessop*

This article explores the roles of markets, states,and partnerships in economic co-ordination andconsiders their respective tendencies to failure.The first section addresses the growing interestin governance and seeks explanations in recenttheoretical developments. The second sectionthen asks whether the rise of the governanceparadigm might also reflect fundamental shiftsin economic, political and social life, such thatgovernance will remain a key issue for a longtime, or is a response tomore cyclical shifts inmodes of co-ordination. Thethird section considers thelogic of ‘heterarchic gover-nance’ in contrast toanarchic, ex post co-ordi-nation through marketexchange and imperativeexante co-ordination throughhierarchical forms oforganization. It also offerssome preliminary reflec-tions on the nature, forms,and logic of ‘governancefailure’. The final sectionaddresses the state’s increasing role in ‘meta-governance’, that is, in managing the respectiveroles of these different modes of co-ordination.

The rise of the ‘governance’paradigm

Governance has only recently entered the stan-dard anglophone social science lexicon andbecome a ‘buzzword’ in various lay circles.

ISSJ 155/1998 UNESCO 1998. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.

Even now its social scientific usages are often‘pre-theoretical’ and eclectic; and lay usages arejust as diverse and contrary. Nonetheless, ingeneral terms, two closely related, but nested,meanings can be identified. First, governancecan refer to any mode of co-ordination of inter-dependent activities. Among these modes, threeare relevant here: the anarchy of exchange,organizational hierarchy, and self-organizing‘heterarchy’. The second, more restricted mean-

ing, is heterarchy (or self-organization) and is thefocus of this article. Itsforms include self-organiz-ing interpersonal networks,negotiated inter-organiza-tional co-ordination, and de-centred, context-mediatedinter-systemic steering. Thelatter two cases involve self-organized steering of mul-tiple agencies, institutions,and systems which are oper-ationally autonomous fromone another yet structurallycoupled due to their mutual

interdependence. These two features areespecially significant in encouraging reliance onheterarchy. For, whilst their respective oper-ational autonomies exclude primary reliance ona single hierarchy as a mode of co-ordination,their interdependence makes them ill-suited tosimple, blind co-evolution based on the ‘invis-ible hand’ of mutual,ex postadaptation. Suchincrementalism is sub-optimal because it isbased on short-run, localized,ad hoc responsesand thus takes inadequate account of the com-

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plex and continuing interdependence amongthese autonomous agencies, institutions, andsystems.

The ‘self-organization of inter-organiza-tional relations’ is a familiar form of govern-ance in many different contexts. ‘De-centred,context-mediated inter-systemic steering’ is lessfamiliar, however, at least outside the German-speaking world (where it is known as‘dezen-trierte Kontextsteuerung’ (Glagow and Willke,1987)). Thus an initial account should be use-ful. This form of governance involves the co-ordination of differentiated institutional ordersor functional systems (such as the economic,political, legal, scientific, or educationalsystems), each of which has its own complexoperational logic such that it is impossible toexercise effective overall control of its develop-ment from outside that system. The politicaland legal systems, for example, cannot controlthe overall development of the economy throughcoercion, taxation, legislation, judicial decisions,and so forth. This does not exclude specificexternal interventions to produce a particularresult; it does exclude control over that result’srepercussions on the wider and longer-termdevelopment of the whole system. This indi-cates that there may be better prospects of‘steering’ systems’ overall development by tak-ing serious account of their own internal codesand logics and modifying the structural and stra-tegic contexts in which these continue to oper-ate; and by co-ordinating these contexts acrossdifferent systems in the light of their substan-tive, social, and spatio-temporal interdepen-dencies. Such steering is mediated not onlythrough symbolic media of communication suchas money, law, or knowledge but also throughdirect communication oriented to inter-systemic‘noise reduction’, negotiation, negative co-ordi-nation, and co-operation in shared projects(these terms are defined below). Inter-systemicco-ordination is typically de-centred and plural-istic and depends on specific forms of govern-ance (Glagow and Willke, 1987).

Although governance in the sense of heter-archy is found on three different levels(interpersonal, inter-organizational, and inter-systemic), the term itself is often limited topractices on the second level. This is consistentwith recent lay usage, in which ‘governance’refers to the mode of conduct of specific insti-

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tutions or organizations with multiple stake-holders,1 the role of public–private partnerships,and other kinds of strategic alliances amongautonomous but interdependent organizations.However, insofar as the relevant agencies,stakeholders, or organizations are based in dif-ferent institutional orders or functional systems,problems relating to inter-systemic steering willalso affect the ‘self-organization of inter-organi-zational relations’ even if they are not explicitlyposed in this context.

Etymology, genealogy, anddiscourse

The anglophone term ‘governance’ can betraced to the classical Latin and ancient Greekwords for the ‘steering’ of boats. It originallyreferred mainly to the action or manner of gov-erning, guiding, or steering conduct and over-lapped with ‘government’. For a long time,usage was mainly limited to constitutional andlegal issues concerning the conduct of ‘affairsof state’ and/or to the direction of specific insti-tutions or professions with multiple stake-holders. It has enjoyed a remarkable revivalover the last fifteen years or so in manycontexts, however, becoming a ubiquitous‘buzzword’ which can mean anything ornothing. The key factor in its revival has prob-ably been the need to distinguish between‘governance’ and ‘government’. Thus govern-ance would refer to the modes and manner ofgoverning, government to the institutions andagents charged with governing, and governingto the act of governing itself. The analogousGerman concept of Steuerung (steering,guidance) proved popular in the 1970s and1980s and for much the same reasons. But italso has a fourth connotation in German throughits links to systems theories. Mayntz notes, forexample, that, in systems-theoretical terms, gov-erning refers to the deliberate action of bringingan autonomous system as an object of govern-ance from one state into another: whether tostabilize it, redirect it, or transform it (1993b,pp. 11–12).

This general etymological account does notexplain why a relatively dormant concept withlimited scope and restricted usage came to berevitalized at a particular moment and has beenapplied by so many individuals, agencies, and

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organizations to so many different topics. Intheoretical terms, this can be linked to certainparadigmatic crises in the social sciences in the1970s and 1980s – crises partly due in turn todissatisfaction with their capacity to describeand explain the ‘real world’. Interest in ‘govern-ance’ as a major theme is rooted in rejectionof several simplistic dichotomies that informthe social sciences. These include: marketvshierarchy in economics; marketvs plan in pol-icy studies; privatevs public in politics; andanarchyvs sovereignty in international relations.Indeed Scharpf was prompted to write:

Considering the current state of theory, it seems that itis not so much increasing disorder on all sides that needsto be explained as the really existing extent, despiteeverything, of intra- as well as inter-organizational, intra-as well as inter-sectoral, and intra- as well as inter-national, agreement and expectations regarding mutualsecurity. Clearly, beyond the limits of the pure market,hierarchical state, and domination-free discourses, thereare more – and more effective – co-ordination mech-anisms than science has hitherto grasped empirically andconceptualized theoretically. (Scharpf, 1993, p. 57, mytranslation)

This dissatisfaction is reflected in recentdisciplinary reorientations. Institutional econom-ics, for example, shows growing interest inmechanisms (such as organized markets withingroup enterprises, clans, networks, trade associ-ations, and strategic alliances) which co-ordinateeconomic activities in other ways than exchangeand hierarchy. International relations has dis-covered ‘international regimes’, i.e., forms ofinternational co-ordination which avoid inter-national anarchy and yet by-pass the nation-state – and which have therefore been describedas involving ‘governance without government’(Rosenau and Czempiel, 1992). In politicalscience attention has turned to forms of co-ordination which not only span the conventionalpublic–private divide but also involve ‘tangledhierarchies’, parallel power networks, or otherforms of complex interdependence across differ-ent tiers of government and functional domains.And the spread of systems theory is linked togrowing interest in the self-regulation of com-plex systems in turbulent environments and theproblems posed by attempts to ‘steer’ such sys-tems from outside. In these and other contexts,then, ‘governance’ is seen as a missing ‘thirdterm’ which both critiques and complementsmore dichotomous approaches.

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The real world of governance

I now consider whether the link between con-ceptual interest in governance and social changeinvolves anything more than transferring oldwine into new bottles. Many practices now sub-sumed under ‘governance’ have been examinedunder other rubrics. Thus public–private partner-ships, industrial districts, trade associations,statecraft, diplomacy, interest in ‘police’(Polizei), policy communities and internationalregimes all involve aspects of what is nowtermed ‘governance’. In this sense, there areclearly precursors of the current interest ingovernance in various disciplines. One couldinterpret this in at least four ways. First, regard-less of the changing importance or otherwise ofheterarchy, the significance of governance inlay discourses has changed and this is reflectedin social science scholarship. Second, a stablebut recently subterranean stream of heterarchicpractices has resurfaced and has begun to attractrenewed attention. Third, after becoming lesssignificant compared with other modes of co-ordination, heterarchy has once again becomeimportant. And, fourth, an upward trend hascontinued, is becoming dominant, and is likelyto remain so. There is a kernel of truth ineach interpretation.

The first possibility is suggested by theexpansion of governance discourse. These rangefrom ‘global governance’ through ‘multi-levelgovernance’ and the shift from ‘government’to ‘governance’ to issues of ‘the stakeholdingsociety’ and ‘corporate governance’. Given theclose, mutually constitutive relationship betweenthe social sciences and lay discourses, thissuggestion would be worth exploring further.

The second possibility is the persistenceof underlying realities beneath the vagaries ofintellectual fashion. So-called ‘governance’mechanisms (as contrasted to markets orhierarchy) have long been widely used in co-ordinating complex organizations and systems.There have always been issues and problemsfor which heterarchic governance is, so tospeak, the ‘natural’ mode of co-ordination.2 Cer-tain forms of interdependence are inappropriatefor (or at least resistant to) market and/orimperative co-ordination. For example, public–private partnership is theoretically well-suitedin cases of organized complexity characterized

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by a loose coupling of agents, complex forms ofreciprocal interdependence, and complex spatio-temporal horizons. In addition, different statetraditions have given more or less scope formarket forces and/or self-regulation to operatein their economies and civil societies. Here onecan contrast, for example, the Anglo-Americantradition with the differing traditions in Franceor Germany (Dyson, 1980). There are also nor-mative preferences for self-organization in cer-tain contexts. This socially necessary minimumof heterarchic practices makes it all the morecurious that they have only recently attractedfocused scientific interest. This is almost cer-tainly related to the blindspots associated withparticular disciplinary paradigms or prevailingforms of ‘common sense’. Thus, during thepostwar period of growth based on a virtuouscircle of mass production and mass consumptionin North America and Western Europe(hereafter referred to as ‘Atlantic Fordism’),when the ‘mixed economy’ was a dominantparadigm, institutions and practices intermediatebetween market and state were often neglected.They had not actually disappeared; they weresimply marginalized theoretically and politi-cally. Subsequent disenchantment with the statein the 1970s, and with markets in the 1990s,has renewed interest in something that neverreally disappeared.

A third contributing factor to the rise ofgovernance is the cycle of modes of co-ordi-nation. All modes are prone to dilemmas, con-tradictions, paradoxes, and failures but the prob-lems differ with the mode in question. Markets,states, and governance fail in different ways.One practical response to this situation is tocombine modes of policy-making and vary theirweight over time – thereby shifting the formsin which tendencies to ‘failure’ are manifested,and creating room for manoeuvre (Offe, 1975).The rediscovery of governance could mark afresh revolution in this process – a simple cycli-cal response to past state failures (especiallythose linked to attempts to manage the emergingcrisis of Atlantic Fordism from the mid-1970s)and, more recently, market failure (and its asso-ciated crisis in corporate governance).

The fourth possibility is that a fundamentalsecular shift in state–market–society relationshas occurred. This implies that important neweconomic and social conditions and attendant

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problems have emerged which cannot be man-aged or resolved readily, if at all, through top-down state planning or market-mediated anar-chy. This secular shift reflects the dramaticintensification of societal complexity whichflows from growing functional differentiationof institutional orders in an increasingly globalsociety – which leads in turn to greater systemicinterdependencies across various social, spatial,and temporal horizons of action. As Scharpfnotes:

. . . the advantages of hierarchical co-ordination are lostin a world that is characterized by increasingly dense,extended, and rapidly changing patterns of reciprocalinterdependence, and by increasingly frequent, butephemeral, interactions across all types of pre-establishedboundaries, intra- and interorganizational, intra- andintersectoral, intra- and international. (Scharpf, 1994,p. 37)

In this sense, the recent expansion of networksat the expense of markets and hierarchies andof governance at the expense of government isnot just a pendular swing in some regular suc-cession of dominant modes of policy-making.It reflects a shift in the fundamental structuresof the real world and a corresponding shiftin the centre of gravity around which policycycles move.

The rise of governancepractices

The rise of governance is partly due to secularshifts in political economy which have madeheterarchy more significant than markets orhierarchies for economic, political, and socialco-ordination. I now consider the reasons forthis by undertaking three tasks: first, identifyingthe logic of governance as a distinctive co-ordination mechanism in contradistinction tomarkets and imperative co-ordination; second,distinguishing three main types of heterarchicgovernance in terms of the sites on which theyoperate; and, third, considering more fully whatsocietal (or macro-social) changes might havemade heterarchy more appropriate as an econ-omic co-ordination mechanism.

First, the most general case for the rise ofheterarchic governance can be made in terms ofthe evolutionary advantage (in terms of relativecapacities to innovate and learn in a changing

33The rise of governance and the risks of failure: the case of economic development

environment) it offers in certain types of cir-cumstances. For self-organization is especiallyuseful in cases of loose coupling or operationalautonomy, complex reciprocal interdependence,complex spatio-temporal horizons, and sharedinterests or projects. Mayntz has discussed net-works as a form of heterarchic governance inthese terms. She suggests that their typical logicis that of negotiationdirected to the realizationof a joint product, such as ‘a specific technicalinnovation, a city plan, a strategy of collectiveaction, or a problem solution in public policy’(Mayntz, 1993a, p. 11). I would add that suchnegotiation typically occurs in the context ofmore or less complex forms of interpersonaland inter-organizational networking which bringand keep together those involved in negotiation;that the key to successful negotiation isnoisereduction, that is, reducing mutual incompre-hension in the communication between differentinstitutional orders in and through attempts toenhance understanding and sensitivity to theirdistinctive rationalities, identities, and interests;and that, once agreements are reached, theyform the basis fornegative and positive co-ordination of activities. In short, if reliance onheterarchy has increased, it is because increas-ing interdependencies are no longer so easilymanaged through markets and hierarchies.

Second, I want to distinguish three typesof heterarchy in terms of the types of actionsystem being co-ordinated.3 These are:interper-sonal networking, in which individuals representthemselves and/or their functional systems butare not mandated to commit specific agenciesor organizations; theself-organization of inter-organizational relations, based on negotiationand positive co-ordination in task-oriented ‘stra-tegic alliances’ based on a (perceived orconstructed) coincidence of interests and dis-persed control of the interdependent resourcesneeded to produce a joint outcome which isdeemed to be mutually beneficial; and moreprogrammatic or mission-orientedinter-systemicsteering based on noise reduction (see above)and on negative co-ordination, that is, takingaccount of the possible adverse repercussionsof one’s own actions on third parties or othersystems and exercising self-restraint as appro-priate. These three forms of heterarchic govern-ance are often linked in tangled hierarchies.Thus, interpersonal trust can facilitate inter-

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organizational negotiation; inter-organizationaldialogue facilitates inter-systemic communi-cation; and the resulting noise reduction canpromote interpersonal trust by enhancing mutualunderstanding and by stabilizing expectations.

Third, turning to the macro-social changeswhich might explain the growth of heterarchy,I focus on the interdependencies in and acrossthe economy and polity. The world economyis being reshaped by a complex dialectic ofglobalization–regionalization. This has allegedlymade it more difficult for (national) states tocontrol economic activities within their bor-ders – let alone global capitalist dynamics. Oncethe relative coincidence of coherent economicspaces and national territories typical of AtlanticFordism (see above) was undermined by inter-nationalization of the economy (especiallyamong the advanced capitalist economies), faithin the national state’s capacities to govern theeconomy was undermined. A correspondingincrease in the ‘unstructured complexity’ of theeconomy on a world scale has triggeredattempts on various spatial scales (from localto global) to reimpose some structure and orderthrough resort to heterarchic co-ordination.

Such attempts are further complicatedbecause capital accumulation has come todepend more heavily on a wide range of extra-economic factors generated through other insti-tutional orders on various spatio-temporalscales. Whilst accumulation has alwaysdepended on non-commodified as well as com-modified relations, this dependence has becomemore marked due to a fundamental change inthe conditions making for competitiveness. Incontrast to the Ricardian approach of maximiz-ing the efficiency with which material factors ofproduction are allocated to different activities,competitiveness is now understood in moreSchumpeterian terms as having a ‘structural’ or‘systemic’ quality (Chesnais, 1987; Jessop,1993; Messner, 1996). It now depends not onlyon an extensive range of economic factors butalso on the capacity to derive added value froma wide range of extra-economic institutions andrelations. This is closely linked to the increasedimportance of the micro-level and the supply-side in economic performance and the correla-tive importance of complex interdependence inpromoting competitiveness. This has greatlyextended the economic and extra-economic

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Seita cigarette factory, Lille, France, 1980.Michel Baret/Rapho

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35The rise of governance and the risks of failure: the case of economic development

interdependencies bearing on competition –whether at the level of the firm, the sector orbranch, or specific economic spaces. Suchchanges have major implications both for theinternal and external relations of the organiza-tional units of competition (firms, etc.). Thesehave been well expressed in the followingterms:

The traditional models of the large, vertically integratedfirm of the 1960s, and of the small autonomous, single-phase firm of the 1970s and part of the 1980s, arereplaced by a new type of large networked firm, withstrongly centralized strategic functions extending in sev-eral directions, and by a new type of small enterprise,integrated into a multi-company local network. Acrossthe network, a system of constantly evolving powerrelationships governs both the dynamics of innovationand the appropriability of returns to the partnersinvolved. The network firm is attracted towards diversi-fied mass production and the competitive factor of thesingle firm is the control of complementary assets in thehands of its potential partners. (Capello, 1996, p. 490)

These changes also make public–private part-nerships and other forms of heterarchy morerelevant than conventional legislative, bureau-cratic, and administrative techniques. This isseen in a turn from the ‘Keynesian welfarenational state’ to a more complex, negotiatedsystem oriented to international competitiveness,innovation, flexibility, and ‘enterprise culture’.The primary co-ordination instruments in theKeynesian welfare system were the market andthe state. They were articulated in a ‘mixedeconomy’ in which big business, big labour,and the big state often engaged in tripartiteconcertation at the national or regional level. Inthe emerging Schumpeterian workfare regime(Jessop, 1993) the market, the national state,and the mixed economy have lost significanceto inter-firm networks, public–private partner-ships, and a multilateral and heterarchic ‘nego-tiated economy’ (Nielsen and Pedersen, 1993).Moreover, in contrast to the primarily nationalfocus of the mixed economy, these new formsof negotiated economy also involve ‘key’ econ-omic players from local and regional as wellas national and, increasingly, international econ-omic spaces. This is linked to the partial ‘hol-lowing out’ of national states through theexpansion of supranational government, localgovernance regimes, and transnationalized localpolicy networks in an attempt to enhance the‘de-centred context-mediated steering’ of capi-

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talist economies. And this latter shift posesfurther co-ordination problems concerning themanagement of the inter-scalar as well as inter-systemic dependencies (see below).

Governance success andgovernance failure

These changes may make anarchic and hier-archic modes of co-ordination more problem-atic. But it does not follow that the structuraland strategic conditions for effective heterarchywill always and everywhere be sufficientlydeveloped to ensure that it will outperform con-tinued reliance on market forces or top-downcontrol. Large literatures already exist on mar-ket and state failure. It is equally important toexamine the governance failure and considerwhat affects its likelihood and the capacities forrecuperating or responding to such failure. Not-ing the problems and risks of governance willhelp us see through the current rhetoric sur-rounding ‘public–private partnership’ and theassociated tendency to highlight successes anddownplay failures (cf. Capello, 1996).

The capitalist market has a proceduralrationality. This is formal in nature, prioritizingan endless ‘economizing’ pursuit of profit maxi-mization. By contrast, government has a sub-stantive rationality. It is goal-oriented, prioritiz-ing ‘effective’ pursuit of successive policygoals. Market co-ordination and hierarchy areprey to the problems of bounded rationality,opportunism, and asset specificity4 (Coulson,1997). Heterarchic governance is based on athird type of rationality: reflexive rationality.The key to its success is continued commitmentto dialogue to generate and exchange moreinformation (thereby reducing, without ever eli-minating, the problem of bounded rationality);reducing opportunism through locking govern-ance partners into a range of interdependentdecisions over a mixture of short-, medium-,and long-term time horizons; and building onthe interdependencies and risks associated with‘asset specificity’ by encouraging solidarityamong those involved. It thereby supplementsmarket exchange and government hierarchywith institutionalized negotiations to mobilizeconsensus and build mutual understanding. Indi-vidual economic partners give up part of their

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autonomy in economic decision-making inexchange for political influence and a betteroverall functioning of the system; and the stategives up part of its capacity for top-down auth-oritative decision-making in exchange forinfluence over economic agents and more effec-tive overall economic performance. In this sensethe rationality of governance is dialogic ratherthan monologic and this requires an investmentof time to work effectively.

The conditions for successful heterarchicgovernance depend on the modes of co-ordi-nation adopted, the constitution of the objects ofgovernance, and the environments within whichrelevant actors co-ordinate their activities toachieve their objectives. Interpersonal net-working, inter-organizational negotiation, andinter-systemic steering pose different problemsin this regard. Objects of governance will alsoaffect the likelihood of success. For example,governing the global economy, human rightsregimes, and transnational social movementsclearly involve very different problems. Finally,turbulent environments pose different govern-ance problems from those that are relativelystable. I now refer briefly to some differencesamong the three types of heterarchic governanceand then offer some initial generalizations aboutgovernance success and failure.

The simplest form of heterarchy arisesfrom the selective formalization of interpersonalnetworking. Individual actors build on their pastfamiliarity with others in various interpersonalnetworks to form a more exclusive, more tar-geted partnership; partners share an imaginedcommunity of interests and orientation to thefuture and they use selective memories toreinforce trust (Elchedus, 1990, pp. 197–8;Luhmann, 1979, pp. 16–19). In the firstinstance, partners represent only themselves; butthey may also be regarded as speaking infor-mally on behalf of institutional orders fromwhich they are recruited. If their actions areconfined to interpersonal networks, however,partners cannot commit the organizations orinstitutions from which they may be recruitedand/or which they represent symbolically.

The self-organization of inter-organiza-tional relations is usually more complex. Itemerges where materially interdependent butformally autonomous organizations, each ofwhich controls important resources, must co-

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ordinate their actions to secure a joint outcomewhich is deemed mutually beneficial. To thisend they negotiate to identify common objec-tives and engage in positive co-ordination toachieve these aims. The continued pursuit ofcommon long-term objectives typically dependsupon the realization of shorter-term objectivesand general compliance with established oremerging inter-organizational expectations andrules. Crucial to the success of such partnershipsis resource synergy, that is, the ‘added value’that comes from partners combining resourcesrather than acting alone (Hastings, 1996). Thisshould be linked in turn to the building of inter-organizational capacities that surpass the powersof any individual member organization.

The most complex form of governance isfound in attempts to facilitate the mutual under-standing and co-evolution of different insti-tutional orders to secure agreed societal objec-tives. In addition to inter-personal networkingand inter-organizational negotiation and positiveco-ordination, two further mechanisms are cru-cial here: ‘noise reduction’ and negative co-ordination (on which, see above). Ideally noisereduction involves mutual understandingthrough dialogue rather than the forceful colon-ization (or penetration) of other systems by therationale and logic of one, dominant system.Likewise, if negative co-ordination is not tobecome a disguised form of imperative co-ordi-nation, it should also be based on genuinepluralism rather than the sheer dominance ofone system, its operational codes, and socialdynamic. Together these mechanisms may helpto realize an inter-systemic consensus aroundvisions or missions which provide a basis formore specific inter-organizational arrangementsoriented to positive co-ordination of relevantactivities around specific objectives.5 This is thesituation which existed in the period of AtlanticFordism with its commitment to full employ-ment and social welfare as the context for spe-cific inter-organizational projects as well asinter-systemic co-operation. It is somethingwhich the neo-liberal hegemonic project alsosought to achieve.

Each form of governance has its own dis-tinctive problems. Thus interpersonal networksinvolve an acute problem of trust as more actorsget involved and/or the material stakes increase.Such problems are reinforced on an inter-

37The rise of governance and the risks of failure: the case of economic development

organizational level by difficulties in securingthe internal cohesion and adaptability of individ-ual organizations; and in making their respectiveoperational unities and independence compatiblewith their de facto material, social, and spatio-temporal interdependence on other organiza-tions. Finally, partnerships that cross insti-tutional boundaries face further problems due todifficulties in mutually co-ordinating (let aloneunilaterally controlling) institutional orderswhich operate according to their own distinc-tive logics.

Nonetheless different forms of governancearrangement can also be mutually supportive.Interpersonal trust may ease inter-organizationalnegotiation and/or help build less personalized,more ‘generalized trust’ as organizations andother collective actors (including inter-organiza-tional partnerships) are seen to sacrifice short-term interests and reject opportunism. In turn,inter-organizational dialogue helps to formulateand represent the identities and/or interests ofdifferent institutional orders and so eases inter-systemic communication. It can also generate‘systemic trust’ (in the integrity of other sys-tems’ codes and operations) by promoting mut-ual understanding and stabilizing reciprocalexpectations around a wider ‘societal project’as the basis for future self-binding and self-limiting actions. And, as noted above, thesedifferent levels of heterarchy are often involvedin tangled hierarchies.

Regardless of the level(s) on or acrosswhich they operate, attempts to build effectivegovernance mechanisms should include:

(a) Simplifying models and practices whichreduce the complexity of the world but arecongruent with real world processes andrelevant to governance objectives. These mod-els should simplify the world without neg-lecting significant side-effects, interdependen-cies, and emerging problems. Some bodiesmay specialize in such model buildingand/or in monitoring their adequacy.

(b) Developing the capacity for dynamic inter-active learning about various causal pro-cesses and forms of interdependence, attri-butions of responsibility and capacity foractions, and possibilities of co-ordination ina complex, turbulent environment. This isenhanced when actors are able to switch

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among different modes of governance tofacilitate more effective responses tointernal and/or external turbulence.

(c) Building methods for co-ordinating actionsacross different social forces with differentidentities, interests, and meaning systems,over different spatio-temporal horizons, andover different domains of action. Thisdepends on the self-reflexive use of self-organization to sustain exchange, negoti-ation, hierarchy, or solidarity as well as onthe specific nature of the co-ordination prob-lems engendered by operating on differentscales and over different time horizons.

(d) Establishing both a common world view forindividual action and a system of meta-governance to stabilize key players’ orien-tations, expectations, and rules of conduct.This allows for a more systematic reviewand assessment of problems and potentials,of resource availability and requirements,and the framework for continued commit-ment to negative and positive co-ordination.

Each of these four conditions bears on theproblem of establishing secure bases of co-ordi-nation and giving them a structurally-inscribedstrategic selectivity that rewards continued com-pliance. This does not exclude (and, indeed,may well require) a certain ambivalence andreal flexibility in governance mechanisms sothat an adequate repertoire of governance rou-tines exists to ensure continued vitality in theface of a turbulent environment. This requisitevariety (with its informational, structural, andfunctional redundancies) plays an important rolein the adaptability of intra- and inter-organiza-tional networks and de-centred inter-systemicsteering (cf. Grabher, 1994; Willke, 1992). Itpromotes the ability to alter strategies and selectthose that are successful. This may seem in-efficient at first sight because it introduces slackor waste into organizations and movements. Butit also provides major sources of flexibility inthe face of failure. For, if every mode of econ-omic and political co-ordination is failure-laden,relative success in co-ordination over timedepends on the capacity to switch modes of co-ordination as the limits of any one modebecome evident. This provides in turn the basisof displacing or postponing failures and crises.

Regarding the environment in which heter-archy operates, co-ordination is most likely to

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succeed where conditions are sufficiently stableand the options sufficiently restricted that reflex-ive monitoring, interactive learning, andincremental change can occur.6 Relatively stable,non-turbulent environments facilitate the selectionof responses that prove successful and therebyenable governance mechanisms to stabilize them.Conversely, turbulence means that any lessonsfrom previous successes or failures may be inap-plicable in rapidly changing circumstances. Thisargument also applies, of course, to the use ofimperative co-ordination. Those who see marketsas discovery mechanisms also presuppose somemeasure of stability in the environment.

Governance failure

The growing fascination with governance mech-anisms as a solution to market and/or state fail-ure should not lead us to overlook the risksinvolved in attempts to substitute governancefor markets and/or hierarchies and the resultinglikelihood of governance failure. However,whilst there are already extensive literatures onmarket failure and state failure, there is farless direct, explicit, and focused concern withgovernance failure. Yet, if both market and statefailure are recognized in social sciences, weshould also thematize governance failure.

Market failure is usually seen as the failureof markets to provide economically efficientallocations in and through pursuit of monetizedprivate interests (as would, presumably, occurif the market functioned according to the stan-dards of an imaginary perfect market). Statefailure is a failure to achieve substantive polit-ical objectives defined as in the public interestand enforced as necessary against particularinterests. Those who believe in the beneficenceof market forces, regard state failure as normaland market failure as exceptional; they generallyrespond to market failure by calling for moremarket, not less! Conversely, those who believein the rationality of the state and its embodimentof the public interest, typically consider marketfailure as inevitable and state failure as some-thing which, if not exceptional, is at least con-junctural. They therefore conclude that it canbe solved through improved institutional design,knowledge, or political practice. To recognizethe inevitability and centrality of market and

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state failure alike would surely be a recipe forpessimism (Malpas and Wickham, 1995, p. 39).For those who recognize at least the formalprocedural rationality of markets, it might stillbe possible to adjudge market outcomes as fail-ures in terms of substantive (political) criteria,such as an unjust distribution of lifechances.Likewise, even if one accepts that state elitesare motivated by the public interest, politicaloutcomes might still be seen as failures in termsof formal (economic) criteria, such as the over-supply of poor quality, high priced public goods(cf. Mitchell and Simmons, 1994).

The criterion for governance failure is notimmediately obvious. For there is no pre-givenformal maximand or reference point to judgegovernance success, as there is in the economywith its emphasis on monetized profits and/orthe (imaginary) perfect market outcome. Noris there a pre-given substantive criterion – therealization of specific political objectives – asthere is with imperative co-ordination. For thepoint of governance is that goals are modifiedin and through negotiation and reflection. Inthis sense governance failure would presumablyconsist in the failure to redefine objectives inthe face of continuing disagreement aboutwhether they are still valid for the various part-ners involved.

But one can also apply procedural and sub-stantive criteria to heterarchy and assesswhether it produces more efficient long-termoutcomes than the market and more effectivelong-term outcomes than top-down co-ordi-nation. This involves shifting perspective some-what and implies a comparative evaluation ofall three modes of co-ordination in terms ofall three rationalities. This can be seen in theincreasing interest in heterarchy as a mechanismto reduce transaction costs in the economy incases of bounded rationality, complex inter-dependence, and asset specificity. It is alsoreflected in the increasing interest on the partof the state apparatus in heterarchy as a mech-anism to enhance the state’s capacity to achievepolitical objectives by sharing power with forcesbeyond the state and/or delegating responsi-bilities for specific objectives to partnerships (orother heterarchic arrangements) acting in theshadow of hierarchy. In the same way, ofcourse, partnerships (or other heterarchicarrangements) may simplify the pursuit of their

39The rise of governance and the risks of failure: the case of economic development

own goals by relying on the market or the stateto fulfil certain aspects of their jointly-agreedprojects. There is an interesting research agendaimplied in these reflections but, rather than pur-sue it further in the present article, I want toconsider the limits to heterarchic governance asa mechanism for pursuing economic develop-ment. In this sense I will be applying proceduraland substantive criteria to heterarchy and thusjudging its performance in more instrumentalterms.

There are three main sets of factors whichlimit the success of governance in guiding econ-omic development. The first is inscribed in thevery dynamic of capitalism itself and affectsall forms of economic and social co-ordination,including the market mechanism itself. For capi-talist growth depends on the market-mediatedexploitation of wage-labour – not the inherentefficiency of unfettered markets. Marketsmediate the search for added value but cannotproduce it. And commodification generates con-tradictions which cannot be resolved by themarket mechanism. This is evident in contradic-tions inscribed in most basic forms of capitalistmarket society. Thus the commodity is both anexchange-value and a use-value; the wage isboth a cost of production and a source ofdemand; money is both national money andinternational currency; productive capital is bothabstract value in motion and a concrete stockof time- and place-specific assets in the courseof being valorized; and so on. In this sensemuch of what passes as market failure is actu-ally an expression of the underlying contradic-tions of capitalism.

This suggests that substituting the state orheterarchy for the market will not eliminatethe underlying obstacles to smooth economicperformance. For heterarchy does not substitutenon-capitalist principles for those of the marketor introduce a neutral third term between marketand state (let alone between capital and labour).It adds yet another area where the dilemmas,contradictions, and antagonisms of capitalismare expressed – including those often discussedin terms of the conflict between capital accumu-lation and political legitimacy. This is especiallyimportant to grasp because much literature oneconomic governance focuses on the modalitiesrather than objects of governance and therebyignores the distinctive constraints imposed by

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the self-organizing dynamic and inter-systemicdominance of capitalism.

The second set of constraints concerns theinsertion of heterarchy into the broader politicalsystem. This particularly concerns the relativeprimacy of different modes of co-ordination andtheir differential access to the institutional sup-port and the material resources necessary topursue reflexively-agreed objectives. Amongcrucial issues here are the flanking and support-ing measures which are taken by the state; theprovision of material and symbolic support; andthe extent of any duplication or counteractionby other co-ordination mechanisms. We can dis-tinguish three aspects of this second set of con-straints. First, as both governance and govern-ment mechanisms exist on different scales(indeed one of their functions is to bridgescales), success at one scale may well dependon what occurs on other scales. Second, co-ordination mechanisms may also have differenttemporal horizons. One function of governance(as quangos and corporatist arrangementsbeforehand) is to enable decisions with long-term implications to be divorced from short-term political (notably electoral) calculations.But there may still be disjunctions between thetemporalities of different governance andgovernment mechanisms which go beyondissues of sequencing to affect the very viabilityof heterarchy in the shadow of hierarchy. Third,although governance mechanisms may acquirespecific techno-economic, political, and/or ideo-logical functions, the state typically monitorstheir effects on its own capacity to secure socialcohesion in divided societies. The state reservesto itself the right to open, close, juggle, andre-articulate governance not only in terms ofparticular functions but also from the viewpointof partisan and global political advantage.

A complicating factor reinforcing the firstand second sets of problems is the ‘relativiz-ation of scale’ (cf. Collinge, 1996). This is anew development and so cannot have the samestatus as the first two sets. But it is nonethelessimportant today. Whereas the national scale ofeconomic and political organization was domi-nant during the postwar economic expansion,the current period sees a crisis of the taken-for-grantedness of national economic and politicalspace. This crisis has not led to the emergenceof another spatial scale as the predominant

40 Bob Jessop

Maruti car factory, India.Jerrican

economic level (whether global or local, supra-national or regional) around which the remain-ing scale levels (however many and howeveridentified) can be organized in order to producea degree of structured coherence. Instead wewitness a proliferation of scales, related intangled hierarchies rather than simply nested,with different temporalities as well as spatial-ities. This increases the extent of ‘unstructuredcomplexity’ to which heterarchy is a response;but it also makes it harder for it to succeed, asmarkets and states also face increasing prob-lems. The rediscovery of the local is one mani-festation of this but local problems cannot besolved entirely at this level; nor is there someother spatial scale at which meta-governancecan be secured so that the local becomes man-ageable.

The third set is inscribed in the very natureof governance as a process of self-organization.The conditions bearing on governance successalso tell us something about those for failure.First, accepting that all efforts at governance

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are bound to fail because of the incompletenessof the definition of objects of governance andfailure to close them off from competingattempts at governance (Malpas and Wickham,1996), one can still usefully distinguish betweendegrees of success and failure. In this context,governance attempts may fail because of over-simplification of the conditions of action and/ordeficient knowledge about the causal relation-ships which affect the object of governance.This can be especially problematic when theobject of governance is an inherently unstruc-tured but complex system such as the globaleconomy. Second, there may be co-ordinationproblems on one or more of the interpersonal,inter-organizational, and inter-systemic levels.These levels are often related: thus inter-organi-zational negotiation often depends on interper-sonal trust; and de-centred inter-systemic steer-ing involves the representation of system logicsthrough inter-organizational and/or interpersonalcommunication. Linked to this is the problem-atic relationship between those engaged in com-

41The rise of governance and the risks of failure: the case of economic development

munication (networking, negotiation, etc.) andthose whose interests and identities are beingrepresented. Gaps can open between thesegroups leading to representational and legit-imacy crises and/or to problems in securingcompliance. Third, there is the ‘governability’problem, i.e., the question of whether the objectof governance could ever be manageable, evenwith adequate knowledge (Mayntz, 1993b;Malpas and Wickham, 1996). Fourth, there isa problem of governance without government –the inability to manage the repercussions ofmany devolved decisions. I address this problemin a later section on meta-governance.

Dilemmas of governance

In addition to these general constraints affectinggovernance and meta-governance, there are spe-cific dilemmas within individual mechanisms.Here I will discuss four such dilemmas.

Co-operation vs competition. Capitalist econom-ies operate through an unstable mix of co-oper-ation and competition. One horn of the resultingdilemma is how to maintain interpersonal trust,secure generalized compliance with negotiatedunderstandings, reduce noise through open com-munication, and engage in negative co-ordi-nation in the face of the many and variedopportunities that exist for short-term self-inter-ested competitive behaviour – behaviour whichcould soon destroy the basis for continuing part-nership. The other horn is that an excessivecommitment to co-operation and consensuscould block the emergence of creative tensions,conflicts, or efforts at crisis-resolution whichcould promote learning and/or learningcapacities and thereby enhance adaptability.This horn is especially acute when the environ-ment is turbulent, speedy action is required,incrementalism is inappropriate, and it wouldtake time to build consensus. Such dilemmashave been widely discussed in recent analysesof flexible industrial districts, learning regions,innovative milieux, etc. They also occur politi-cally in the trade-off between partnership andpartisanship. For partnerships are typicallylinked to differential advantages for politicalparties, tiers of government, and departmentalinterests as well as to differential economicinterests of various kinds. This poses dilemmas

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both in relation to any given partnership and,even more acutely, in relation to the opport-unities that may exist for juggling multiple part-nerships to secure partisan advantage.

Openness vs closure. Heterarchies operate incomplex, often turbulent, environments. Theyface problems in remaining open to the environ-ment at the same time as securing the closureneeded for effective co-ordination among a lim-ited number of partners. One horn of theresulting dilemma is that closure may lock inmembers whose exit would be beneficial (e.g.,inefficient firms, underemployed workers, sunsetsectors) or block recruitment of new social part-ners (e.g., new firms, marginalized workers,sunrise sectors). The other horn is that opennessmay discourage partners from entering intolong-term commitments and sharing long-termtime horizons. This may prompt opportunism in(the potentially self-fulfilling) case that partner-ships dissolve or involve high turnover. It isreflected in the choice of maximizing the rangeof possible actions by expanding relevant basesof membership or favouring the ‘small is beauti-ful’ principle for the purpose of focused andtimely action; and the choice of variable geo-metries of action versus fixed spatial boundariesfor membership of a governance arrangement.An interesting variant of this latter version ofthe dilemma is whether to permit transnationalpartnerships or to insist on sovereignty.

Governability vs flexibility. Heterarchy is saidto permit longer-term strategic guidance(lacking in markets) whilst retaining flexibility(lacking in hierarchies with their rule-governedprocedures). But this is also the site of adilemma: that between governability (thecapacity for guidance) and flexibility (thecapacity to adapt to changed circumstances).This assumes several forms. Reducing com-plexity through operational rules as a precon-dition for governing a complex world needs tobe balanced against the recognition of com-plexity to mobilize the ‘requisite variety’ ofactors and resources. Avoiding duplication tolimit resource costs needs to be balanced againstmaintaining an adequate repertoire of actionsand strategic capacities. A third variant is posedin the choice between exploiting past organiza-tional and inter-organizational learning to stan-

42 Bob Jessop

dardize around ‘best practice’ and maintainingadaptability in the face of a turbulent environ-ment by avoiding ‘lock-in’ to outmoded rou-tines. This last problem is particularly associa-ted with efforts to impose ‘best practice’ fromabove rather than encourage diversity and allowfor horizontal communication and learningamong partnerships.

Accountability vs efficiency. Some public–priv-ate partnerships are expected to serve the publicinterest as well as to deliver private benefits.But this blurs the public–private distinction andposes a familiar dilemma in terms of account-ability versus efficiency. On the one hand, thereare problems about attributing responsibility fordecisions and non-decisions (acts of commissionor omission) in interdependent networks. Theseproblems are especially acute when partnershipsare inter-organizational rather than interper-sonal. On the other hand, attempts to establishclear lines of accountability can interfere withthe efficient, co-operative pursuit of joint goals.A related dilemma is that public–privatearrangements run the risk of allowing theexploitative capture of public resources for priv-ate purposes and/or extending the state’s reachinto the market economy and civil society toserve the interests of the state or governingparty. A third version of this dilemma concernsthe relative primacy of economic performanceand social inclusion – how far the maximandin public–private partnerships is marketizedeconomic performance as opposed to addressingproblems of social cohesion.

These dilemmas can be managed collec-tively in several ways. Among these are thedevelopment of different institutions, appar-atuses, or agencies specializing primarily in oneor other horn of a dilemma and changing thebalance between them through differential allo-cation of resources, continuing competition forlegitimacy in changing circumstances, etc. Like-wise, different horns can be handled at differentscales. Thus in neo-liberal economies compe-tition is often pursued more vigorously at thenational level (privatization, liberalization,deregulation, etc.) whilst co-operation is pur-sued more vigorously at the local or regionallevel (through public–private partnerships) (cf.Gough and Eisenschitz, 1996). Differentgovernance arrangements may also be instituted

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to deal with different temporal horizons. Thusone partnership may have an open structure andlong-term horizon, another may be relativelyclosed and pursue specific tasks or developmentactivities with short-term time horizons.

From governance failure tometa-governance

In discussing ways of handling these dilemmasI have already broached the issue of meta-governance: the ‘organization of self-organiza-tion’. This idea should not be confused with asuper-ordinate level of government to which allgovernance arrangements are subordinated. Itinvolves instead the design of institutions andgeneration of visions which can facilitate notonly self-organization in different fields but alsothe relative coherence of the diverse objectives,spatial and temporal horizons, actions, and out-comes of various self-organizing arrangements.Meta-governance has institutional and strategicdimensions. Institutionally, it provides mech-anisms for collective learning about the func-tional linkages and the material interdepen-dencies among different sites and spheres ofaction. Strategically, it promotes the develop-ment of shared visions which might encouragenew institutional arrangements and/or newactivities to be pursued to supplement and/orcomplement existing patterns of governance. Inboth respects it involves the shaping of thecontext within which heterarchies can be forgedrather than developing specific strategies andinitiatives for them. States have a major rolehere as the primary organizer of the dialogueamong policy communities, as an institutionalensemble charged with ensuring some coher-ence among all subsystems, as the source of aregulatory order in and through which they canpursue their aims, and as the sovereign powerresponsible ‘in the last resort’ for compensatoryaction where other subsystems fail (e.g., wheremarkets, unions, or the science policy com-munity have failed). This involves almost per-manent institutional and organizational inno-vation in order to maintain the very possibility(however remote) of sustained economicgrowth.

Meta-governance does not amount to theinstallation of a monolithic mode of governance.

43The rise of governance and the risks of failure: the case of economic development

Rather, it involves the management of com-plexity and plurality. Thus markets, hierarchies,and heterarchies still exist; but they operate ina context of ‘negotiated decision-making’. Thus,on the one hand, market competition will bebalanced by co-operation, the invisible handwill be combined with a visible handshake. Onthe other hand, the state is no longer the sover-eign authority. It becomes but one participantamong others in the pluralistic guidance systemand contributes its own distinctive resources tothe negotiation process. As the range of net-works, partnerships, and other models of econ-omic and political governance expand, officialapparatuses remain at bestprimus inter pares.For, although public money and law would stillbe important in underpinning their operation,other resources (such as private money, knowl-edge, or expertise) would also be critical totheir success. The state’s involvement wouldbecome less hierarchical, less centralized, andless dirigiste in character. The exchange ofinformation and moral suasion become keysources of legitimation and the state’s influencedepends as much on its role as a prime sourceand mediator of collective intelligence as on itscommand over economic resources or legitimatecoercion (cf. Willke, 1992).

In exercising this meta-governance role, thestate provides the ground rules for governance,ensures the compatibility of different govern-ance mechanisms and regimes, deploys a rela-tive monopoly of organizational intelligence andinformation with which to shape cognitiveexpectations, acts as a ‘court of appeal’ fordisputes arising within and over governance,serves to rebalance power differentials bystrengthening weaker parties or systems in theinterests of system integration and/or socialcohesion, etc. This emerging meta-governancerole means that networking, negotiation, noisereduction, and negative co-ordination take place‘in the shadow of hierarchy’ (Scharpf, 1994, p.40). The need for such a role is especially acutein the light of the wide dispersion of governancemechanisms and the corresponding need tobuild appropriate macro-organizational capaci-ties to address far-reaching inter-organizationalchanges without undermining the basic coher-ence and integrity of the (national) state. Thisrole tends to fall to the state because of itsheightened paradoxical position as an insti-

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tutional subsystem which is simultaneouslymerely part of a wider, more complex society(and thus unable to control the latter fromabove) and also a part normatively charged(notably in the last resort) with securing theinstitutional integration and social cohesion ofthat society (Jessop, 1990).

Concluding remarks

In conclusion I want to suggest that markets,states, and governance all fail. This is not sur-prising because failure is a central feature ofall social relations. For ‘there is no such thingas complete or total control of an object or setof objects – governance is necessarily incom-plete and as a necessary consequence mustalways fail’ (Malpas and Wickham, 1995, p.40). Given the growing structural complexityand opacity of the social world, indeed, failurebecomes the most likely outcome of mostattempts to govern it with reference to multipleobjectives over extended spatial and temporalhorizons – whether through markets, states,partnerships, or some other mechanism.

This is often recognized. However, whilstfailure in the other two modes of co-ordinationis regarded as inevitable, in the preferred modeof co-ordination it is typically seen as excep-tional and corrigible. For example, for liberals,although the state is prone to failure, a turn tothe market will solve the problem. If the marketfails, however, it can be improved. Conversely,for statists, the response to market failure isgovernment. If government fails, however, thenit should be improved. This polarization isreflected both in the succession of governmentsand in policy cycles within governments inwhich different modes of policy-making suc-ceed each other as the difficulties of eachbecome more evident.

If we accept the incompleteness of attemptsat co-ordination (whether through the market,the state, or heterarchy) as inevitable, then it isnecessary to adopt a satisficing approach tothese attempts. This in turn has three keydimensions: a self-reflexive orientation to whatwill prove satisfactory in the case of failure;a self-reflexive cultivation of a repertoire(requisite variety) of responses so that strategiesand tactics can be combined to reduce the likeli-

44 Bob Jessop

hood of failure and to alter their balance in theface of failure; and a self-reflexive ‘irony’ inthe sense that participants must recognize thelikelihood of failure but proceed as if successwere possible. Perhaps the supreme irony in

this context is that the need for irony holds notonly for individual governance mechanisms butalso for the commitment to meta-governanceitself.

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Notes

References

* This paper was initially deliveredto the Colloquium on ‘Enjeux desdebats sur la gouvernance’, 29–30November, 1996, at the Universityof Lausanne. It derives from workfor an Economic and SocialResearch Council research projecton local governance (GrantL311253032); it was written whileI was Hallsworth Research Fellowat Manchester University.

1. For example, the corporategovernance of firms, schools,hospitals, etc.

2. This is not to deny the claimthat modes of governance in partconstitute their own objects ofgovernance. Not all constitutedobjects of governance are amenable

to governance as defined in specificgovernance projects.

3. This typology is influenced bythe Luhmannian distinction betweenthree levels of social structure(interaction, organization, andfunctional system or institutionalorder); and by a correlativedistinction between different formsof social embeddedness – the socialembeddedness of interpersonalrelations, the institutionalembeddedness of inter-organizational relations, and thesocietal embeddedness of inter-systemic relations.

4. Asset specificity exists to theextent that assets have limited usesand are immobile.

5. In this way they may generatepolicy synergy, i.e., ‘a process bywhich new insights or solutions areproduced out of the differencesbetween partners’ (Hastings, 1996,p. 259).

6. This does not mean, for inter-systemic steering, that systems mustabandon their own distinctive codesor undergo de-differentiation. Butthe individual programmes that theyuse to specify these codes’operational implications must bemodified at the margins to facilitatethe continued negative and/orpositive co-ordination of theirrespective operations across thedifferent systems involved.

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