For the past 20 years, the Australian government has been washing its hands of direct responsibility for the provision of services. There has been incessant "privatisation", "deregulation" and " contracting out".Has it gone so far that the government has lost control of substantial parts of economic and social policy?Has this greater reliance on markets led to a change in our values and in the willingness of government to support our democratic traditions?Michael Keating AC, Australian public service doyen and leading economic analyst, contests both propositions.There is clear evidence, he argues, that governments still govern. He shows there has been no decline in the power of government to decide what it wants to do nor in its ability to achieve its traditional objectives. To the contrary, government, by making greater use of "managed" rather than "free" markets, is now more effective in pursuing its policies than it used to be.Keating argues that what really limits the capacity of modern Australian government is the conflict resulting from the differential impact of policy changes on electorally potent interest groups. This incapacity is compounded by a more individualistic, less trusting society, which leaves governments struggling politically to present unifying, national policy acceptable to the wide variety of interests and opinions.This is an absorbing, clear and closely argued book which paints a different picture of the current relationship between government, markets and the Australian community and charts a different path for the future.