The growing fascination (bordering on obsession) with governance mechanisms as a solution to market and/or state failure should not lead us to overlook the risks involved in attempts to substitute governance through networks and solidarity for markets and/or hierarchies and the resulting likelihood of governance failure. ‘Thinking about institutional design nowadays requires sociological input’ (Hajer and Wagenaar, 2003: 2) – this means that the challenge is to develop relations between the spheres of civil society, the economy and the state that are less hierarchical and less paternalist, that are sensitive to the needs and aspirations of diverse groups (and especially those who tend to get marginalized) and that have a capacity to learn from diverse knowledge resources (Amin and Thrift, 1995; Storper, 1997; Moulaert, 2000; Healey et al, 2003).

Given contingent necessity, social complexity, structural contradictions, strategic dilemmas and multiple or at least ambivalent, goals, failure is a contingently necessary outcome of attempts at governance (on the sociology of failure, see Malpas and Wickham, 1995). What is necessarily contingent about governance attempts are their modalities, sites, forms, temporalities, spatialities, effects and capacities for recuperating or responding to failure. On the last point, indeed, Offe (1975b) notes that, since each and every mode of state policy-making is prone to failure, one must either accept that a stable state apparatus is impossible or that it is possible only to the extent that it has the capacity to flexibly shift modes of policymaking as the failures and contradictions of the dominant mode (or the prevailing policy-making mix) become more evident and threaten the state's rationality and legitimacy. Offe concludes that the state's long-run survival depends on specific organizational qualities of the state, including what I have elsewhere termed the articulation of government and governance. This is a powerful argument and can be generalized to other forms of (self-reflexive) coordination besides the national state.

Heterarchic governance through networks and solidarities is not always more efficient than markets or states in resolving problems of economic and/or political coordination. Much depends on the strategic capacities to sustain exchange, negotiation, hierarchy or solidarity as well as the specific nature of the coordination problems.