Regional economic and social development is an important public issue in most countries, yet among the least successful. In Australia, some 40 years of trial and error regional strategy appear to have had limited success in securing long-range economic and social development leading to more diversified economies, population growth and converging regional wellbeing. The paper explores the nature of Australia's regional development problem and its causes as a prelude to summarising governments' changing capacity to influence and control events. Given this background, it sketches an emerging governance system, particularly in the State of New South Wales, designed to ameliorate regional adversity. Finally, it assesses the system's current and prospective functionality and impediments to system improvement.