This paper explores the role of regional governments in implementing radical neoliberal reforms during the 1990s. The Harris government in the province of Ontario, Canada, and the Kennett government in the state of Victoria, Australia, are used as case studies. In 1992 the Kennett government was elected to office in a landslide victory, and over the next seven years it cut 10% from government spending, embarked on Australia’s largest privatisation experiment that yielded more than A$30b in proceeds, deregulated the labour and property markets and retrenched over 75,000 public sector workers. In 1995 the Harris government was swept to office with a mandate to implement its manifesto for government: the ‘Common Sense Revolution’. This document, which was described in the National Post as a ‘chamber of commerce wish list’ (May 4, 1994: 15), consisted of a radical reform program of spending cuts, tax cuts and public service retrenchments. Over the next seven years Harris proceeded to implement this agenda, along the way redefining the role of the regional state in Ontario in much the same way as the Kennett government was doing, albeit on a more substantial scale. The question addressed by the paper is this: what are the social and political conditions that have made these sweeping reforms possible? Of particular interest to us is the explanation implicit and sometimes explicit in the existent literature that would have us believe that the rise of neo-liberalism is accompanied by a change in the mode of regulation: people’s values and beliefs shift decisively in ways that render the new regime of accumulation legitimate in their eyes. We ask the question: was this so? We show that in the case of Victoria, at least, it was not. This in turn begs the question of how, then, was the transformation achieved? We suggest that the answer is to be found in a theoretical approach that combines regulation theory with regime theory.