Decentralization, goal steering, accountability, managerialism, evaluation, choice, competition and privatization are key terms in the international rhetoric of educational policy. However, in the historical traditions and cultural-social framework of various nations, this ‘new’ policy perspective takes a specific form and shape. In the Nordic countries, with their welfare state tradition which stresses equality in education as well as in other fields of life, radical changes are taking place. This article examines the change in educational policy and governance in Finland during the past decade. The examination is based on many sources and materials including documents, statistics and interviews with educational politicians, administrators and teachers, and a survey of students collected during two comparative research projects during 1998–2001.