ABSTRACT
Since the 1970s, the economic base of the Swedish government-especially its welfare state-has been steadily eroded. When there was a major crisis in the early 1990s, traditional policies of currency devaluation and active labour market intervention were unable to restrain the downward spiral. A new policy approach was adopted, including significant measures of public sector reform. Sweden’s traditional statist, corporatist policy of governance was changed with the introduction of measures such as marketisation and increased use of management by objectives and management by results to improve public sector resource management (Marcou 1993; Naschold 1996). In addition, there was a decentralisation of power from central government towards public corporations, agencies and-as discussed in this chaptertowards local government.
