Deborah Mabbett analyses the historical development of the political economy of Sweden and New Zealand. She examines the reasons why two countries, whose governments shared similar political objectives of full employment, income equality, and social security, should have developed markedly different policies towards the welfare state, wage bargaining, and trade. Sweden adhered, with a few exceptions, to a policy of free trade, while New Zealand was highly protectionist. Sweden's wage-fixing institutions were corporatist, while in new Zealand the state played a much larger role in wage determination. Sweden developed a much larger public sector and a more extensive system of social security transfers than New Zealand. Dr Mabbett investigates these differences through an examination of the whole set of economic and social policies adopted in the two countries in relation to employment and wage determination.