This paper analyses the main features of Sweden’s public expenditure and addresses some key policy issues. Public spending is high relative to GDP, reflecting the wide support for the Swedish welfare state. The institutional framework within which spending decisions are made has both strengths and weaknesses: the expenditure ceilings need to be reinforced, more prioritisation of expenditure is needed, and state agencies need to become more accountable for their performance. Outlays and outcomes are examined for childcare and education, health, caring for the elderly, and social insurance, where some aspects function very well and others need considerable improvement. Some tools and techniques for getting better results from public spending are also considered, including contracting out and user charges. More could be done to clearly set out the costs as well as the benefits of social choices ...