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This article explores the emergence, operation and outcomes of social partnership in the National Health Service (NHS) in Scotland and Wales. Social partnership emerged in the NHS following political devolution in 1998 which transferred powers to left-wing governments in Scotland and Wales. These arrangements helped improve health services, modernize industrial relations and enhance staff terms and conditions. In NHS Scotland, union participation in strategic decisions produced extensive co-operation to dismantle the internal health market, improve services and enhance staff terms and conditions. Union participation in NHS Wales was restricted to discussing workforce issues, and although co-operation increased when Welsh governments gained enhanced legislative powers and dismantled the internal health market, it delivered fewer improvements in service and pay levels. Differences in government political positioning (against public sector marketization) and degree of independence (with devolved administrations granted different legislative powers) help explain the operation and outcomes of social partnership. [ABSTRACT FROM AUTHOR]