Polycentric Governance Meets the New Economy: The United States, the European Union and Transnational Regulation

In contrast to previous production regimes, the emerging global information economy is widely integrated due to technological innovation rather than to hierarchical forms of institutional organization. As a consequence, the almost universal availability of electronic networks across national borders does question basic conceptions of territorial sovereignty. The analytical framework of multi-level governance (MLG) is able to relate such sector-specific changes, prima vista, to broader concerns about the appropriate exercise of political authority in formally as well as informally connected subnational, national and international arenas. Yet, such adaptive institutional arrangements may have difficulties in fully capturing authoritative decision-making that moves ‘sideways’, ‘out of the hands of governments and into the hands of non-state actors’ (Haufler, 2003, p. 226). Likewise, the recognised need for transnational regulation of commercial relations to advance the exploitation of new information technologies does create multiple, competing and conflicting political loyalties among economic actors that will rarely shift in an exclusive, onedirectional fashion to supranational bodies, such as the European Union (EU), and may, instead, favour inter-governmental agreement and international organization.