Globalization, market-based administrative reform and the creation of autonomous agencies have led most contemporary governments to cut back on their staff, deregulate markets, and place more emphasis on the private sector. A result of these developments has been that the capacity of the state to prepare coherent policy and to make informed and intelligent choice may have been reduced. Additionally, the globalized economy tends to delocalize corporations and to make the economic environment of the state less predictable. A result of both developments has been the growing significance of governance issues across and beyond traditional state boundaries. This book reviews and analyses these challenges to state policy capacity. The key argument in the analysis is that policy coordination across boundaries - within government, between governments and beyond governments - is becoming increasingly important. This applies both to domestic policies as well as to vertical policy coordination in multi-level governance arrangements.