So it comes as a breath of fresh air when a book like Social Policy
and Economic Development in the Nordic Countries comes along and builds
a convincing case in favour of the opposite.
Edited by Olli Kangas and Joakim Palme, this is the first volume in
a new series about social policy published by the United Nations
Research Institute for Social Development.The book analyses how the
Nordic welfare model has been able to develop, the impact it has had
and the challenges it faces in the future.
The authors are very clear that Scandinavian welfare policies have
achieved numerous victories, such as reducing hardship, inequality and
social exclusion. For instance, in their study about the effectiveness
of different types of family policies in reducing child
destitution,Tommy Ferrarini and Katja Forssén show that the ones used
by the Nordic countries have worked best because they assume both
parents are breadwinners, and they are universal and income-related. In
addition, they provide services that encourage more women to seek paid
employment and more men to do care work.
But the main point the authors are trying to make is that high
welfare spending, far from impeding economic development, has helped
it.Taking the example of Sweden, Walter Korpi explains that there is no
evidence that high taxes hampered the functioning of the market. About
the economists who argued that the country was suffering from
“Swedosclerosis”, Korpi says:“We must unfortunately say that, as far as
empirical evidence is concerned, this was not their finest
hour.”
Kangas and Palme also argue that, since the Nordic countries have
enjoyed high levels of and growth “despite” important levels of social
spending and state intervention,“ this suggests … that there are ways
in which properly designed social policies can contribute to
growth”.
However, that does not mean that the authors are unconditional
defenders of the Nordic model: Kangas and Palme dismiss as “wishful
thinking”,“myth” and “Candidelike” the belief that the Nordic welfare
model is the perfect solution to all the problems in the
world.
In fact, the most appealing part of the book is Kangas’ and Palme’s
analysis of how the Nordic model can survive future challenges. In
their opinion, it is vital that Scandinavia and Finland increase the
number of people in work, because they are the ones who will finance
the pensions of rapidly ageing baby-boomers.
To do that, the Nordic countries need to ensure that benefits and
services are universal.“As soon as we start means-testing,” write
Kangas and Palme,“it will affect the profitability of, particularly,
lowincome persons – often women – engaging in paid employment.” In
addition, benefits must be linked to earnings, so that “the more they
earn and pay, the better benefits entitlement will be”.
But Kangas and Palme also point out that none of these measures will
work if individuals do not have the right resources, such as relevant
skills or the adequate social services to take care of their
dependants. Most important of all is that governments must apply
efficient economic policies.“If there are no, or too few, jobs to apply
for, good skills may not be enough to get employment.”
Ultimately, the authors argue that Nordic governments need to focus
on social issues that are relevant to all and allow a greater degree of
individual choice, even in areas that have become subject to state
intervention.
It is a very interesting argument and this makes Social Policy and
Economic Development in the Nordic Countries an absorbing read on the
relevance of the Nordic model.
