Europe has gone further than any other world region in developing international democracy and policymaking. This chapter investigates democracy at state and interstate levels in terms of its ability to tackle the problems produced by a global economy. It describes the traditional system of ‘hard-shelled’ territorial states which developed over the nineteenth century and the first half of the twentieth century, until they produced problems which could only be met by international action. The chapter focuses on the processes of globalization, which have eroded traditional boundaries and jurisdictions to produce problems unresolvable at state or even federation level – suggesting that the only solution lies in something resembling world government. Organizing and directing flows of trade and technology are multinational corporations operating across the world and largely unaccountable to any national government. Within democratic states, the more general political accountability of governments to citizens has decreased.