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The scandinavian welfare states
Stephens, John D
Stephens, John D
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dp67.pdf
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"The Scandinavian welfare states have enjoyed an international reputation for combining generous welfare state entitlements with rapid economic growth, low unemployment and very high levels of labour force participation, particularly among women. They seemed to have achieved the elusive combination of social equality and economic efficiency. As recently as 1988, Sweden, Norway and Finland appeared as international exceptions, maintaining very low levels of unemployment while not only maintaining but actually expanding welfare state entitlements in the previous decade. Denmark, with a decade of high unemployment and attendant economic problems, seemed to be the outlier. Within five years, all three experienced historically unprecedented increases in unemployment. Indeed, in Sweden and Finland, the turn of economic events was widely termed a “crisis” which equalled or exceeded that of the Great Depression. Many analysts have linked the poor performance of the Nordic economies to their welfare states. The generous entitlements are expensive and, it is argued, they have made the Scandinavian economies uncompetitive. This problem has been accentuated by the processes of economic internationalization and European integration, which make international competitiveness all the more imperative. This critical view of the Nordic welfare states appears to have found some acceptance even among their principal architects, the Social Democrats and trade unions, as they have recently agreed to cuts in some entitlements, such as lowering replacement rates and introducing waiting days for benefits. Moreover, trade unionists and Social Democrats, in Scandinavia and elsewhere in Europe, have expressed fears that the long-term result of the 1992 initiative would be to reduce welfare state provisions to the lowest common denominator within the European Union. This paper examines the development, achievements and current crisis of the Scandinavian welfare states. Although the main focus is social policy, it is impossible to understand the development of the latter without consideration of complementary economic policies which produce growth and thus employment. The paper will argue that, taken as a whole, welfare state entitlements have made little if any direct contribution to the current economic problems of the Scandinavian countries. In fact, many of these entitlements may actually have created competitive advantages."(pg 1)
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1995-06
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With permission of the license/copyright holder