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Around 1970, public aid for private schools in Australia, New Zealand and the U.S. was marginal although a politically influential Catholic school establishment was desperately campaigning for public aid in all three. Since then, the three education systems have diverged dramatically. While in the U.S. public aid has, by and large, been denied to private schools, especially sectarian ones, in Australia all private schools have since received aid and the private school sector has expanded significantly as a result. In New Zealand, public aid to private schools is modest and the private school sector has, in fact, diminished in size since 1970. This study explains the reasons for the divergent development with an emphasis on institutional constraints and also on the strategic creation, and bypass, of institutions by both proponents and opponents of public aid. A framework of two comparisons of political institutions, policy processes and decision making - Australia compared to the U.S. and Australia compared to New Zealand - offers insights about the circumstances under which the use of veto points aids or fails reform. Furthermore, the study also explores how significant reform can proceed in either a rapid or a slow pace. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]