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E-book Promoting Active Citizenship : Markets and Choice in Scandinavian Welfare
In the 1980s, Swedish welfare researchers travelled the world to presentthe Scandinavian social democratic model at conferences. The modelrepresented a‘modern’alternative to the market economy and socialism,combining generous benefits and economic equality with high labourforce participation for both women and men. However, the downsidequickly became apparent: high taxes and swelling public debt. Thetransfer value to other countries was in question since the trend inspiredby Thatcherism and Reaganomics was to cut taxes and slash publicbudgets. Was the model at all sustainable with an ageing population? Buteven as an economic crisis hit Scandinavia in the early 1990s, the welfaremodel did not die—it was transformed. In the new millennium, the Scandinavian countries—Denmark,Sweden and Norway—seemed to be on their way to overcoming at leastsome of the inherent problems of their welfare model. In a special issuein 2013,The Economisteven presented the Nordic countries as‘the nextsupermodel’because they had reduced public debt and spending asshares of GDP, simplified and lowered taxes, and built pension systemson a solid foundation that made automatic adjustments for longer lifeexpectancy, while at the same time developing open, innovative andknowledge-intensive economies. Furthermore, the Scandinavian coun-tries have high levels of happiness and well-being (Helliwell et al.2016)and social trust (Ervasti et al.2008; Rothstein2003) and navigated the2008 globalfinancial crisis better than almost everyone else. Norway hadoil income invested in a sovereign fund and no public debt, but the otherScandinavian countries did not have such advantages.
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