Whereas the golden age of postwar economic expansion was a period of relative economic and institutional stability among the advanced democracies, the 1980s and early 1990s marked a period of policy experimentation and attempts at institutional reform. The rise of monetarism in Britain and the United States, the famous U-turn of the French socialists, and the collapse of the Government of National Unity in Italy all represented significant departures from the “postwar settlement” or, alternatively, from the corporatist trajectory of advanced capitalist political economies in the 1970s. The apparent crisis of tripartite or social democratic corporatism since the late 1970s might be attributed to the failure of corporatist experiments in countries, such as France and the UK, which never had the institutional preconditions necessary to the success of corporatist bargaining. Subjected to great political-economic stress, so the argument goes, corporatist arrangements collapse unless they have been consolidated through a long history of organizational adaptation and trust building (cf. Crouch 1993). However, such a view fails to take into account the manifest pressures for change in some of the small corporatist countries of Northern Europe.

The Swedish case stands out in this context. On the one hand, Sweden's postwar development embodied an extraordinarily coherent “model,” linking wage bargaining, macro-economic policy, selective state intervention in labor markets, and a variety of social policy measures. (At least, this is how Sweden came to be conceived by Swedish policymakers as well as foreign observers in the 1960s and 1970s.) On the other hand, Sweden represents one of the most obvious instances of “paradigmatic realignment” or “regime change” among OECD countries over the last 10 to 15 years. In terms of partisan politics, the abandonment of the postwar consensus has been much less confrontational than in the British case. As in the British case, however, we observe a reordering of basic policy priorities and a change in the way that policy makers think about the relations among the principal coordinates of economicpolicy (cf. Hall 1993). The goal of price stability has been upgraded relative to the goal of full employment, and policy deliberations have increasingly come to be informed by the notion of a trade-off between efficiency and equality and by the concomitant idea of public-sector spending and employment as an obstacle to competitiveness and growth.