The role which the state plays in governance depends on a large number of factors such as the historical patterns of regulation and control of the particular policy sector: the institutional interest in maintaining control; the degree to which governance requires legal and political authority; and the strength of societal organizations and networks. The actual role which the stats plays in governance is often the outcome of the tug-of-war between the role state wants to play and the role which the external environment allows it to play. In the political economy literature on governance we find several examples of persistent self- regulation of market sectors and a common interest among corporate actors to minimize state presence in the governance of industrial sectors (Campbell et al., 1991; Hollingsworth et al., 1994 ) similarly, the network approach to governance substantiates the capacity of cohesive networks to fend off state interests in the governance of policy sectors (marsh and Rhodes, 1992 ).