Recently, some European social scientists have claimed that the old legal‐bureau‐cratic model of administration has been replaced by a new paradigm in public administration, characterized by a strong emphasis on collaboration in local inter‐organizational networks. The proponents of this policy network approach take a clearly voluntaristic view on policy implementation; network actors build consensus in negotiation processes, and the role of central government is restricted to that of goal‐setter, facilitator and mediator. Thereby, phenomena like power and steering are overlooked. This paper gives an account of a major Swedish reform in the area of old‐age care, whereby the boundaries between regional and local areas of responsibility for care of the elderly were displaced. By using a variety of control methods, central government was able to structure and steer the old‐age implementation networks. The consequences of this central steering were different on different administrative levels: for the county councils, the reform has resulted in a specialization for the core areas of primary health care and hospital treatment, whereas the municipalities have had to diversify their areas of activity. Thus, to understand the effects of the reform, implementation networks must be viewed as both hierarchical and horizontal power structures, where national government, from a hierarchically superior position, can affect formally horizontal relations between actors by creating patterns of interdependence. Central government’s steering has taken on less direct forms than the traditional ones, but indirect forms of steering can certainly be efficient, especially when several mutually reinforcing control methods are combined.