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The article tells the story of changes in governance discourse and practices in Icelandic primary and secondary education in the late 1990s. Budget reform, curriculum changes and school-based self-evaluation aimed at a greater nancial and pedagogical accountability of school professionals, especially principals, has changed the roles of principals and teachers. A clinical approach to diagnosing special educational needs views inclusion as a technical matter rather than as a social goal and enhances the emphases on the individual and her or his needs, proposed in the curriculum discourse. These kinds of reform have entered the educational discourse in Iceland, looking as if they were inevitable steps towards progress in the new millennium. They are modern educational sagas about Iceland and its place and role in global competition.

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