From the dawn of humanity, formal institutions validated evolving economic, social and political relations among people. While at the initial stages of human development, the gatherers’ communities operated according to simple sets of rules, which were based on family hierarchy, the transition to the agrarian society, however, required more sophisticated administrative practices and mechanisms. Thus, the early state institutions were born, set to become an irreplaceable foundation of the human civilization. Although states established procedural and legal frameworks for the economic and social development, political and technological innovations of the XVIII–XX centuries didn’t contribute to the expansion of government power and influence over the backbone processes in the integrating world. Furthermore, new actors and institutions had started to deprive the state of some of its functions. Breakthrough discoveries in science and constant financial innovations, along with the process of expansion of capitals and ideas throughout two centuries resulted in the advent of a new paradigm in social and economic development of the world – ‘knowledge economy’. Oddly enough, its core features – diffusion and volatility of its main product – knowledge, as well as its producers – qualified educated individuals, and the internationalization of economy, act primarily in favor of state’s competitors: transnational corporations and supranational economic and political institutions. The new nature and interpretation of threats, and the new norm of progress and welfare based on transnational regulation and management play a role in quenching the status of the state, and although the humanity has yet to walk a long way towards a model of global organizational order, the descent of the state is inevitable.