Sweden has commonly been regarded as a prominent example of the Social democratic Welfare-state regime (Esping-Andersen 1996), characterized by strong State govern¬ance and involvement in welfare matters. In the last two decades, however, the Swedish public sector and education have undergone a radical and extensive transformation in neo-liberal direction, including both external and internal privatization (Ball & Youdell 2008) and preceded by far-going decentralisation from the State to municipalities and schools. Our paper describes and analyses both forms of privatization, especially how they materialize in Swedish upper secondary education, but also their uneasy relationship to still existing values and goals of e.g. equality, universality and inclusion in education. The aim is to clarify in what ways external and internal privatization of education are still framed by the values and politics of the social democratic welfare-state regime, or if it is more accurate to speak of a dominance of the liberal welfare-state in Sweden today, departing from the example of education. Ball, S. J. & Youdell, D. (2008). Hidden Privatisation in Education. Brussels: Education International. Esping-Andersen, G., ed. (1996). Welfare States in Transition. National Adaptations in Global Economics. London: Sage Publications.