While economic globalization is frequently cited as a source for regulatory policy convergence, the precise causal links between these two variables often go unexplored. The common thread missing from most of the globalization literature is the role of state agency in the regulation of the global political economy. This paper builds on a simple game-theoretic model of policy coordination to argue that great powers remain the most important actors in determining the extent of policy convergence. When great powers act in concert, there will be effective policy harmonization. When the great powers fail to agree, partial policy convergence will take place through competition. The increasing returns to scale of regulatory harmonization will lead powerful actors to compete for as many allies as possible, leading to strong policy convergence, but at multiple nodes. These different pathways are examined by inspecting the variation in outcomes of two different issue areas: money laundering and genetically modified organisms (GMOs). © 2005 Taylor & Francis Group Ltd.