Regulations and Governance in European Cities* PATRICK LE GALE ` S In most European countries, any challenge to the state raises major disquiet, given the weight of influence of states in structuring groups and interests and in organizing economic development, notably in the most heavily centralized countries. This article develops the hypothesis that the political aspect is being reinforced at the sub-national level. Then, following from this, it makes a detour through the works of various economists and sociologists, in order to bring to light — though not to try and cover exhaustively — modes of regulation which they have identified. In doing this, questions are asked about political regulation in situations or contexts where it is not necessarily dominant, in the hope that this may lead to an understanding of how different types of regulation have formed linkages in different types of territory. Finally, the article develops the concept of governance and redefines it within a territorial framework, from a ‘new political economy’ perspective. Regulation and territories Sociologists, political scientists and economists have rather different understandings of these two terms. In some sociological work on regulation (for example, the sociology of organizations or the sociology of law), economic sociology has developed a coherent group of pertinent, original contributions on issues of regulation. This type of approach has been developed particularly in order to study the regulation of the economy. Since Durkheim, Weber or Polyani, there has been interest in the political and social foundations of the economy, in mechanisms of regulation — other than market mechanisms — which might account for transformations in western societies and for economic development. For economists, the essential mode of regulation is market regulation, which is at the centre of all classical and neoclassical works. This market is a general system of exchange between buyers and sellers, where regulation most often operates through prices (sometimes through volumes). Within this framework, territory is of little importance. Different elements are contributing to the extension of market regulations: the processes which are creating a worldwide economy (Veltz, 1996); the growing role of transnational companies and their globalization strategy; deregulation and privatization movements (Wright, 1993); the globalization of financial markets; and technological changes. As Harvey (1989) has shown, the new phase of capitalist development which is expressed in the increased mobility of capital gives it a decisive advantage over immobile social and political structures such as states or social groups embedded in a particular territory. Joint Editors and Blackwell Publishers Ltd 1998. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA. * A different version of this article has been published previously in Italian in Stato e Mercato No. 1 (1998).