How do you discipline without spanking?

My friends' kids here in Sweden are spared from spanking (and any physical punishments) because it is against the law and parents can be arrested for it. So, what they usually do for punishment is to take away a privileged item that the child loves. For younger kids, they take away a favourite toy while for older kids, if they have computers, mobile phones -- they'll be taken away. Alternatively, they will take away tv-time, game days or even their favourite weekend dessert. It works each time!