How do established global institutions adapt to new circumstances? And how are the formation and evolution of regional institutions constrained by global ones? These questions are at the centre of this work in which contributors explore the possibilities for reconciling regional and global institutions by nesting one within the other, or by creating parallel institutions that deal with separate but related activities. The authors use a theoretical framework to analyze the factors that lead to institutional bargaining games. They show how institutional innovation and the use of linkages might alter such games. Their essays examine the development of the Financial Support Fund, the European Economic Area, institutional competition and conflict in the Bosnian crisis, and problems in the European Monetary System. They reveal the advantages for international co-operation of both parallel and substantive institutional reconciliation, and provide a model for understanding institution-building and modification beyond the European experience.