This paper presents an overview of selected social policy developments in OECD countries during the eighties and describes some specific Australian developments over the period. It begins with a description of trends in government expenditure and indicates the extent to which public expenditure control has been achieved since the mid-eighties. Social expenditure trends are then described, although the absence of reliable comparative data make this analysis less complete than is desirable. Key features that have shaped the social policy context are then discussed, with a focus on the impact of government expenditure restraint, on changes in the labour market, on demographic change, and on the more general changes in economic thinking and the role of economic policy. The concepts of efficiency and effectiveness are then explained and their application to selected social programs explored. It is argued that both concepts - part of a new rnanagerialist approach to public policy generally – are essentially technical in nature and the limitations this implies for their application to social programs needs to be acknowledged. Specific consideration is given to their application in the income support domain, where international evidence from the Luxembourg Income Study is used to illustrate the shortcomings of adopting an overly narrow technical perspective. The paper then describes international developments in social services policy, focusing on health services. Finally, selected Australian experience since 1983 is discussed and used to illustrate how the current government has pursued social policy reform within an overall context of fiscal restraint.