ABSTRACT: The system of nation-states is evolving into something more complex and indeterminate. One important development has been creation of regional communities. If these are to thrive in their own distinctive way, national governments, including United States, will need to support creative policies that harmonize interests, not only within such communities but also among them. Policy planners, therefore, must think globally and act regionally. ********** Not so long ago, international relations meant inter-state relations. Issues of war and peace belonged exclusively to governments of states. They ruled world. This was commonly called the Westphalian system, after 1648 Peace of Westphalia, which dictated principle of independent national sovereignty and laid geopolitical foundation for next several centuries. It replaced a more decentralized system that was much like system now emerging in this age of transition. The Westphalian system has given way to one in which dominance of nation-states is challenged by global and regional entities, as well as subnational ones. (1) National governments no longer have a monopoly over use of force on a large scale and, hence, over decisions concerning war or peace. Their power is seeping away. Fragmentation, or disintegration, appears to be inevitable side of coin from integration inherent in process of globalization. The reasons for this are not altogether clear. Perhaps disintegration has occurred because power has been reallocated within system. Perhaps global institutions seem too remote. Certainly, export of jobs and competition with workers in distant countries breed reactions leading to barriers between nations. Probably a mix of all these factors has contributed to this reaction, and we might reasonably invoke philosophy of Hegel to suggest that a new system of governance will be a synthesis of globalization and localization. In any case, arguably, all of conflict and turmoil that has affected Euro-Atlantic region since end of Cold War, perhaps even end of Cold War itself, has resulted from ambitions of actors operating below level of states. Ethnic cleansing, rise of political Islam, dissolution of multinational states, over-reaching by financial organizations--all these are evidences of fragmentation. The correlation with successes of globalization during this same period is too strong to ignore. National governments are fighting to retain their authority but it appears to be a losing battle. The technologies and tools they deploy to preserve their share of power also undermine it, as individuals and networks have become empowered by information technology. Barriers to trade only serve to weaken that power further. The process of creating new forms of governance continues unabated, but in a more or less haphazard fashion. This development does not mean that nation-states are going away or that their powers are permanently lost. In fact, one of striking things about history of nation-states is not merely how enduring they have been, but also how successful most have been in adapting to new geopolitical and economic conditions. A Example The archetype of cooperation is still European project, despite its many internal tensions. In Europe, a true security community has been constructed, where its members never entertain thought of war among themselves. But even in Europe, nation-states survive and in a few cases appear to thrive. The half-century of integration has served them well. To use language of one of contemporary Europe's best known historians, late Alan Milward, supranationalism has served to rescue nation-state. (2) This verdict is not universally held but nation-states do coexist with other structures designed both to limit and to extend their power. …