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The Rise of Governance and the Risks of Failure:
the Case of Economic Development
Bob Jessop*
This article explores the roles of markets, states, and partnerships in economic coordination and
considers their respective tendencies to failure. Section 1 addresses the growing interest in
governance and seeks explanations in recent theoretical developments. Section 2 then asks
whether the rise of the governance paradigm might also reflect fundamental shifts in economic,
political, and social life, such that governance will remain a key issue for a long time, or is a
response to more cyclical shifts in modes of coordination. Section 3 considers the logic of
‘heterarchic governance’ in contrast to anarchic, ex post coordination through market exchange
and imperative ex ante coordination through hierarchical forms of organization. It also offers
some preliminary reflections on the nature, forms, and logic of ‘governance failure’. Section 4
addresses the state’s increasing role in ‘meta-governance’, i.e., in managing the respective roles
of these different modes of coordination.
1. The Rise of the ‘Governance’ Paradigm
Governance has only recently entered the standard anglophone social science lexicon and
become a ‘buzzword’ in various lay circles. Even now its social scientific usages are often ‘pre-
theoretical’ and eclectic; and lay usages are just as diverse and contrary. Nonetheless, in general
terms, two closely related, but nested, meanings can be identified. First, governance can refer to
any mode of coordination of interdependent activities. Among these modes, three are relevant
here: the anarchy of exchange, organizational hierarchy, and self-organizing ‘heterarchy’. The
second, more restricted meaning, is heterarchy (or self-organization) and is the focus of this
article. Its forms include self-organizing interpersonal networks, negotiated inter-organizational
coordination, and de-centred, context-mediated inter-systemic steering. The latt
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