Negotiations that are embedded in a hierarchical authority structure are conducted under conditions that differ significantly from those of "freestanding" negotiations. The mechanisms for the ministerial bureaucracy also apply to the relationship between the hierarchical authority of the state and certain types of negotiated policymaking among actors in civil society. Hierarchical coordination may in principle be able to produce outcomes that achieve both welfare efficiency and distributive justice for all types of societal problems and under all strategic constellations—which explains why this mode of interaction is typically presupposed in substantive policy analyses. The constellation changes when the state is itself party to negotiations, rather than a third party setting the stage for and intervening in negotiations between societal groups. The limits of self-regulation may be extended, however, if associations are operating "in the shadow of the state."