Amos,

Sometimes time out works, sometimes punishments such as getting a good taste of soap works.

I don't think that treating a child like a grown-up works. You can not bargain with a child. They want what they want, when they want it, and can see no reason at all that they should be denied. I have seen far too many parents with their youngsters in tow kicking and screaming and crying because mommy or daddy wouldn't get them what they wanted.

There are only a few ways of getting people to do what needs to be done. I have already said that appealing to their better selves doesn't work with children as they have a very short view of the world (it revolves around them).
That leaves reward or aversion. Reward is a good choice but it leaves you owing the child something (other than the loving they should already be getting)for every time they behave. Lets teach them all how to blackmail us! (My children only wanted more love when it was time for bed and they could delay going to bed by asking for hugs and kisses all around the house).

Aversion (spanking) lets them know that their behavior is not acceptable, will not be tolerated, and will be a bad experience for them. It is not revenge. It is not swift and righteous punishment.
It also seems to have worked well in that when my children were still of an age to throw tantrums a threat of a spanking was enough to elicit sober behavior.

By the way, a child who has never seen a sword will pick up a stick and whack his sister with it regardless of whether the parent "smacks" that child or not.