The Nordic model was on display at the World Economic Forum in Davos, Switzerland last week and the government's of the regions produced a brief report on what has long been admired by the Left but is also getting attention across the political spectrum as governments scramble to make their economies more competitive.
Prime Minister Jens Stoltenberg Norway said his country has succeeded at combining a social welfare state with an efficient, market-oriented economy and spreading the wealth in the process. It’s not just Norway’s oil income that’s fueled the country’s success, he stressed. “It’s completely possible to ruin an economy, even with oil money,” Stoltenberg told newspaper Dagens Næringsliv (DN) before leaving for Davos.
“We have shown that it’s possible to have a society where we value fair distribution of wealth along with dynamic private business,” Stoltenberg said. “But we still have our unsolved problems.” Nor is it realistic for other countries to copy the Norwegian model or the systems of other Nordic countries that also sustain high standards of living.
Sweden's centre-right government said:
"In a short period, the Swedish tax
burden, particularly on low and middle income earners, has decreased markedly.
In total, the implemented stages of the in-work tax credit and our declared
reform ambitions equate to around 2 percent of GDP in 2011. Sweden is therefore
making excellent progress in its ambition to shape income taxes in a way that
counters marginal effects and poverty traps and enduringly raises the employment
The Economists's columnist Bagehot, whose column this week is on the Nordic regions, comments in a blog note in relation to Europe's past worries about competitiveness: "The single biggest reason that Europe was not the most dynamic and competitive knowledge-based economy in the world, I argued, was that lots of Europeans (perhaps most) did not want to live in such a competitive place. For sure, they want to stay rich and comfortable, and they know that globalisation is a threat. But lots of Europeans are not prepared to do anything about it, if it means taking shorter holidays, working longer hours, graduating more quickly or retiring much later."
Every country has its pluses and minuses and I recall a Belgian remarking that the Swedes were the most boring people in Europe.
Aithníonn ciaróg, ciaróg eile (One hedgehog recognises another), I thought to myself!
During the property bubble, Ireland set 2013 as the target to be recognised as a 'world-class knowledge economy' as if it could be achieved in an unreformed broken governance system.
The report for Davos, The Nordic Way (pdf), says that in international comparisons, not least the World Economic Forum’s global competitiveness index, the Nordic countries are almost always found at or near the top.
In one meta-index that is an aggregate of 16 different global indices (competitiveness, productivity, growth, quality of life, prosperity, equality etc) the four main Nordic countries - - Sweden, Norway, Denmark and Finland -- top the list.
What are the reasons it asks? Is there such a thing as a common “Model” particular to the Nordics and if so, will it last? Is it sustainable, even transferable to other parts of the world?
The report provides what it terms bits and pieces of what the governments believe are some plausible explanations for the relative success of the Nordic societies. It says if these experiences can improve the understanding of their way of doing things and if it inspires debate and development in other parts of the world, they will be very pleased.
They say shared values are also about sharing values and experiences with others.
The fact that Nordic countries showed resilience during the recent financial crisis largely seems to be the result of previous deep crises in the Nordic region in the 1980s and 90s. During these crises, the Nordic countries renewed and modernized their respective economies in ways which sometimes constituted a break with previous regulations and tax systems.
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