The study details the effects of ministerial discretion combined with behind-the-scenes negotiation of interests among bureaus and governments, as well as scientific uncertainty on bargaining among governments. The author argues that the consultative processes used were insensitive to the inequalities among the parties regarding regulatory capacity. As a result, the relationships among the parties were not characterized by the reciprocity required for rapid implementation of the air quality management plan. The process used to amend the management plan to accommodate emissions trading illustrates the lack of partnership, insensitivity to variations in regulatory capacity, and an unwillingness to involve all partners in the debate associated with organization of air quality regulation. Inattention to the role of the state in improving the regulatory capacity of firms and governments is a major impediment to the development of effective regulation. The building of partnerships that permit flexibility is a challenging task that requires assumptions apparently alien to both policy advisors in a parliamentary system and advocates of market-based regulation. 5 notes and 96 references