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The Swedish Model : What , why and whereto ?

The Swedish Model : What , why and whereto ?. Lars Niklasson, Associate Professor Political Science Linköping University, Sweden. What is the Swedish Model ?. Collective bargaining since 1938 Welfare for work (”Arbetslinjen”) since the 1950s (?)

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The Swedish Model : What , why and whereto ?

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  1. The Swedish Model: What, why and whereto? Lars Niklasson, Associate Professor Political Science Linköping University, Sweden

  2. What is the Swedish Model? • Collectivebargainingsince 1938 • Welfare for work (”Arbetslinjen”) since the 1950s (?) • A welfarestatesince the 1970s (?) • A ”high tax equilibrium”: hightaxes and highquality (?) • ”Goodgovernment” generates trust in government? • Reforms since the 1990s • A new ”supermodel” (The Economist, February 2013)

  3. Topicsof the course • The roots: from the Vikings to the present days • ---1809-1932-1968-1995 • The effects: qualityoflife and competitiveadvantage? • (Betterthan the alternatives?) • The logic: self-supporting trust (”equilibrium”) • (Only in Sweden?) • Operations: central/local, fragmented/coordinated • Whereto? Europeanization, globalization

  4. The ambition of the course Aftercompletionof the course, the student should… …be ableto show a fundamental knowledgeof the origins and structureof the Swedish government and the Swedish social system …have the capacityto deal with the manymythsconcerning Sweden and Swedish society

  5. 1: The rootsof the Swedish Model IntroductiontoStatebuildingLars Niklasson Swedish historyto 1600 Sofia Gustafsson Swedish history 1600-1800 Henrik Ågren Swedish history 1800-2000 Björn Ivarsson Lilieblad Goodgovernment from 1850 Lars Niklasson The earlypoliticsof the WS Elin Wihlborg Seminar on the literature Seminar on individualpapers

  6. 2: The Swedish Welfare System IntroductiontopoliticsLars Niklasson Education and trainingLars Niklasson Governance & privatizationBo Persson Legitimacy & efficiencyLars Niklasson Drivers ofchangeElin Wihlborg Seminar on the literature Seminar on individualpapers

  7. Course requirements • Active participation at the seminars • Questions on the literaturewill be provided • Submit and defend a short individual paper • 1,000-1,500 words • A topicrelatedto the course • A question and a short analysis • Onlyfew extra sources (use the literature) • Collaboration is encouraged • Highgrades for clarity and creativity

  8. The literature • A historycompendium • Articles by Bo Rothstein et al • QualityofGovernmentInstitute, Gothenburg • Morel, Palier & Palme 2012: Towards a Social Investment Welfare State? Ideas, Policies and Challenges, Bristol: The Policy Press • Articles from Oxford Handbook on Swedish Politics(forthcoming) • Articles on highereducation policy

  9. 1. IntroductiontoStatebuilding • States are different • Nordic, Anglo-Saxon, German, French, Asian etc. • Parliaments, governments, bureaucracies etc. • Comparisonhelpsus understand and seecausalitys • The historical process helpsexplain present variety • Whatwasbeforestates? • Whyhavethey dominated from 1648? • Howwerepatternsformed?

  10. Sweden and Denmark:Different pathsand outcomes • Estates (the nobility) vs absolutist kings • Strong peasants or towns (Not West/East) • A militarystate vs separation • ”Corruption” until 1870s vs 1730s • The legal systems, universityeducation • Gradualshift from conservatismtocorporatism vs radical break and strong liberalism (by the farmers) • S: Protectionism, administrative corp., social corp. (statism) • D: Radical break 1848-49, farmers and towns, littlecorporatism • More private providers in the Danish WS, less paternalism

  11. Knudsen & Rothstein 1993:State-building in Scandinavia • Whatare ”western” and ”eastern” patterns? • How do Sweden and Denmark fit thesepatterns? • Sweden’sbureaucracywasmorecorrupt for a longertimethanDenmark’s; How? Why? • Whatwere the important steps in Sweden’s ”road tomasspolitics”? Howdid it differ from Denmark’s? • Howdid the popular movements differ? • Canweseedifferences in the welfarestates? (1993) • (Why is Sweden moresimilartoDenmarknow? A new path?)

  12. Swedish history Lecture 2: Swedish historyto 1600 Lecture 3: Swedish history 1600-1800 Lecture 4: Swedish history 1800-2000 Based on the compendium Excursionto western Östergötland

  13. 5. The rootsofgoodgovernment • The puzzle: Whatcauseswhat? • A. Economicdevelopment, industrialization • B. ”Goodgovernment” withoutcorruption • C. Welfare policies • Rothstein et al: the qualityof the government is the key • Corruption is a barriertowelfare and development • (Co-evolution withearlyindustrialization?) • Howcanyou go from corruptionto non-corruption? • Corruption is a stableequilibrium • Now: oneof the leastcorruptcountries in the world • LessonsapplicabletoRussia, Africaetc

  14. Sweden was a thirldworld country • The Frenchambassador 1771: Twoserious problems, love for democracy and total corruption • A patrimonial, nepotisticstate • A blurredlinebetween public office and private interest • Heckscher: Marshy (försumpad) administration • Hiring not based on merit • Offices were sold tofinanceretirement • Holdseveraloffices and hireothersto do the job • Fees, housing and grain insteadofsalary • Briberywas a crimeonly for judges

  15. Howcanweexplain the transformation? • Howto stop takingbribes? • Morecontrolpresumes a benevolentprincipal • Howtocontrolstateleaders? • Democraticelections, accountability, presumes… • A social trap, a suboptimal equilibrium (”collective action theoryofcorruption”), explainspersistence • ”Big bang” as a wayout: impossible? • An endogenouswayout? (Ostrom 1990)

  16. Ostrom’s solution Supplyof a solution, Comitment, Monitoring A cooperation game (as overfishingetc) A highpayoff from cooperation ”Another world is possible” New ideas: Liberalism Exogenousfactors?

  17. Data shows the transformation • Appeals Court cases on malfeasancepeakedtwice, i.e. therewasincreased attention to the problem • A new HighCourt in 1789, by the absolutist kingbutwith a long-term positive impact • A needto save moneyafter the wars 1808-09, 1814 • A new political situation after the collapseof the government 1809. A new constitution and a new king • A threatto national survival, becoming a small state • Corruptionwasmainly in the rural administration

  18. Debates in the Parliament (the Diet withfourestates) • The separation of public and private money: punishment for taking private ”loans” 1823 • Severalinitiativestooutlaw promotion based on fees (pension system introduced in the 1870s) • A new tax system and the introductionofsalaries • A Weberianperspective: an impartialbureaucracywasneededtostrengten the legitimacyof the public sector (not divinity, heritage, tradition etc) • The bureaucracy as a machine (hierarchy) tohandleroutinecases in governments (and companies)

  19. Wheredid the ideas come from? • Enlightenment liberalism: meritocracy, impartiality, professionalism, accountability • Britain, France, Prussia, Bavaria (Schiller/Beethoven…) • Stronger from 1830 dueto a liberal press and more liberals in the Parliament/Diet (industrialists) • Demand for a more representative parliament and a governmentthatrespected the constitution

  20. Bureaucracy and the economy From feudalloyalty (back) to Roman legal traditions Need for education and gooduniversities Morerationalgovernment: Railway Board 1862, Telegraph Board 1865, Road and Waterway Commission 1841 Feudalguildsabolished 1864: freetrade and commerce Industrializationstartedaround 1870

  21. Teorell & Rothstein 2012: Gettingto Sweden: Malfeasance and bureaucratic reforms 1720-1850 Whatare the key elements in a theoryinspired by Ostromtoexplain the abolishmentofcorruption? Whatare the keyevidencethat Sweden confirmstoOstrom’sexplanation? What external (exogenous) factorscanhavehelped in the transformation of Sweden?

  22. Rothstein1998: State Building and Capitalism: The Riseof the Swedish Bureaucracy Whatare the key elements of a bureaucracyaccordingto Max Weber? Howdid the Swedish civil service differ from the Weberianmodel? Whatare the benefits of a bureaucraticgovernment? Is the bureaucraticmodel still appropriate for governments? Howcan it be improved?

  23. 6. The politicsof the earlywelfarestate Popular protest and organized civil society Freetrade vs. protectionism Democracy for men and women Saltsjöbaden 1938: corporatism The dominanceof the labormovement 1932-76 ATP as a key event and major conflict ”The solidaristic pay policy” and the booming 1960s 1968 and the 1970s: triumphor hubris?

  24. What is a universal welfarestate? • Benefits for all (universal vs. selective) • Compare: Bismarckian systems, company-basedwelfare • Everyonepays • Createsloyalty, if it workswell • The cynical interpretation: a waytobuyvotes • Does it create social capital or is SC a prerequisite? • Onlypossible in homogenoussocieties? • A gradualdevelopment, small steps, pragmatism

  25. Rothstein 2008b: Is the universal welfarestate a cause or an effectof social capital? Whatare universal welfarestates? Whatareitselectoral and politicaleffects? Whatare the alternative explanations for a relation betweenbiggovernments and social capital? Whatevidencepointsto the welfarestate as an outcomeof social capital? Whatevidencepointsto the welfarestate as a producerof social capital?

  26. Rothstein, Samanni & Teorell 2012: Explaining the welfarestate: Power resources vs the qualityofgovernment What is the Power ResourceTheory? Whatare the problems with PRT? What is ”bringing the state back in”? Whatare the keyideas in the QualityofGovernment (QoG) theory? Whatdoes the empiricalevidence show? Arethereany problems with the evidence?

  27. The Swedish Model, part 2 IntroductiontopoliticsLars Niklasson Education and trainingLars Niklasson Governance & privatizationBo Persson Legitimacy & efficiencyLars Niklasson Drivers ofchangeElin Wihlborg Seminar on the literature Seminar on individualpapers

  28. 7. Introductionto the politicsof the welfarestate • 1976-82-91-94: Challenges and decentralization • 1995: Membershipof the European Union • Late 90s: Cutbacksto save the welfarestate • Toogeneroustowork? • 2006: Back to ”work for welfare” (Arbetslinjen) • = Reforms to save the welfarestate? • Influence from 1997: The European Social Model • Whereto? A Social Investment State?

  29. A new typeofwelfarestate?(Morel, Palier & Palme, intro) • 1. Social investments in skillsand modern needs/risks (work/familylife, changeofcareers etc.) • = an Economist’sperspective on welfare:utilityratherthan social rights, ”productive social policy” • = Collectiveresponsibility • Alva and Gunnar Myrdal: families and women • (Wantedselectivepolicies) • 2. Keynes: the macroeconomy, moretraditional/male • 3. Neoliberals: rigidities, market distortions, gov’tfailure • Three paradigms (table 1.1) SIWS as a hybrid

  30. A new typeofwelfarestate, continued • Critique: • Less support for passive unemploymentwith the focus on ”activation” • Less support tostayoutside the labor market • Bad implementation ofpoliciesagainstexclusion in the Lisbonstrategy • An instrumental view on women and children (as labor force) • Divergent views (Nordic vs Anglo-Liberal): • Esping-Andersen on positive effectsof social rights, aim for equality, combination of investment and protection • Giddens on moral hazard and duties, beneficialinequalities, support as springboard, from passive toactivemeasures

  31. Waves of transformation(Hemerijk 2012) • 1. Keynesianism after WWII (the Depression) • From charityto right, tamingcapitalism, classcompromise, embedded liberalism (Bretton Woods) • 2. Neoliberalism after the 70s (Stagflation) • Monetarism (balanced budgets, low inflation, stablecurrency), flexibility, gov’t as problem, selectivepolicies • OECD Jobs Study 1994: highunemployment in Europe, EMU to limit politics, social pacts/not cutbacks • 3. Social investment since 90s (the Third Way) • OECD 1996, EU 1997, Esping-Andersen et al 2002. A balance. The welfarestatecan be positive for competitiveness. Structural (not cyclical) unemploymentneedscapacitating services

  32. Social investment(Jenson 2012) Beyond neoliberalism: critics on the left and right Investment (not spending) = future profits Responsibility mix: market, family, community, state Universal coverage Fostering prevention, rights and duties Governancethroughnetworks: communities (?) (Sweden: Learning accounts, citizen choice?) Neoliberalism failed: highspending & problems in Europe, experiments in Asia, revisedideas 1997 (World Bank)

  33. Ageing populations(Lindh 2012) Demographictransition: problem and opportunity Ageing population effect in 2030-40 National variety, National Transfer Accounts Transfers over the lifecycle: independence, retirement Life expectancy, fertility rates: dependency rates Worklonger, havemorebabies: welfare support Pensions: savings or pay-as-you-go Parentalleave Consequences for jobs: more services, less goods

  34. Post-crisis policy(Diamond & Liddle 2012) • MorebarrierstoEuropean social policy duetoaftershocksof the crisis, especially public finance • Directeffects: unemployment, austerity • EU divergence • Globalisationwinners and losers • Demography • Migration • The stateremainsbigbutchangesitsrole (NPM) • An opportunity for a European Social Model?

  35. Climate policy(Sommestad 2012) • Social policiesto support climate policy • Market-basedclimatepolicies: emissions trading • Incomeequalityleadstobetterclimate(?) • Public ethos, economic instruments regressive • Sectoralimpact: less agriculture, energy-intensive industries, more transport • Need for industrial policy, employment policy, dialogue, public investments (-- a role for markets, banks?) • The new economicsofsustainabledevelopment (Stern) • Long-term investments in public goods: educationetc.

  36. From LisbontoEurope 2020(Lundvall & Lorenz 2012) • The LisbonStrategy (2000): wide and with a goal: • ”The mostcompetitive region in the world” • ”Europe 2020” (2010): narrower, withpriorities • Smart, sustainable, inclusivegrowth (+targets) • Continuitywith the focusedLisbonStrategy 2005-10 • Still weak implementation (OMC), changeofmajority, SGP • EuropeanEmploymentStrategy: qualityjobs? Flexicurity? Less competitivenesswith less cohesion? • No understandingof the learningeconomy (or EMU) • A transnational welfarestateneeded = Europeanidentity

  37. A new economicmodel(Morel, Palier & Palme, conclusion) • A paradigm in searchof a new economicmodel • Modernisingideas • Capacitatingpolicies: education, family, employment • Weak implementation: • Increase in expenditure, not investments • Protection and promotion: the Nordics (NL, UK) • Activation = thirdway = ”toocloseto neoliberalism” • The analysis: disincentives, lack offlexibility • The solution: workingpoor. (Conservation?) Skillsareneeded.

  38. A new economicmodel, contd. Withhighskilljobs, moredifficulttoemploy migrants New national accounts? Investments vs consumption Political triggers: competition for the femalevote Against neoliberalism (– a new coalitionof socialists and conservatives? mercantilism, competitiveness) Germany not a viable alternative (?) Gradualchangemayleadtoparadigmaticchange

  39. Morel, Palier & Palme 2012: Towards a social investment welfarestate? Ideas, policies and challenges 1. Whatare the differencesbetweenGiddens and Esping-Andersen on Social Investment policies? 2. Whatare the threewavesreactionsagainst? 3. Whatare the differencesbetweeninvestments and savings? 10. In what sense is demography an opportunity? 11. Is the crisis an opportunity for a European Social Model? 12. What is the linkbetween social and climatepolicies? 13. What is missing in Europe 2020? 14. What kind ofcoalition(-s) would support a European Social Modelbased on the ideaof social investments?

  40. 8. Case study: Education and training • Two parts: • Primary, secondary, tertiaryeducation • Skillsdevelopment and training for adults • Structures, actors, processes, achievements • Challenges • Europeancomparisons (Morel, Palier & Palme 2012)

  41. Education policy Pre-school, primaryschool 1-9, secondary 10-12 National curricula, frameworklegislation and control Local and private implementation A strong focus on resultssince 2006: more uniform A debate on segregation, vocational programs

  42. Highereducation • Xxuniversities (PhD-granting) • Yy colleges (limited PhD-granting) • Several private, two independent • Alsosomevocationaltertiaryeducation (YH) • Student loanstostudy in Sweden and abroad • Quasi-market since 1993: • Formula funding, deregulation, qualitycontrol • Fees for non-EES students (exceptexchange) • What drives innovation in highereducation? • Competitionand/or top-down inititives?

  43. Labor market policy: training • Active labor market policy, ALMP = training programs • A national policy: peopleneedtomoveto the jobs • Formerly regional and corporatist, nowcentralized • Performancetargetsleadtocreaming • Exclusion: difficulttohelpclientswithmanyneeds • Localcollaboration or competition? • Training programs by local and regional gov’tstoo • ”One door in”, joined-upgovernmentbottom-up: • Infotek = guidance, Lärcentrum = co-location

  44. Consistent? Efficient? • The policiesoverlap in adult education • Are the systems integrated? • Do theypromoteequality (ofopportunity/outcomes)? • Do they support individualdevelopment? • Do they support economicgrowth? • Nextlecture on governance and privatization

  45. Good for the citizens? • Moreintegrated public services? • Moreadaptable services? • Not good at solvingcomplex problems, or these problems arenowmorevisible? • Fighting exclusion • Support for economicgrowth (betterskillsdevelopment? A strong business climate?) • Accountability?

  46. OECD comparisons(Nikolai 2012) Compensatorypolicies: unemployment, old age Investment policies: ALMP, family, education Spendingconvergence over time Spending in cash or in kind (services) Expansion of old age insurance and family benefits ALMP: moreactivation, less spending Four clusters (low/high) Figure 4.3-4.6 Increasedspendingbut less on education Convergence on Scandinavia or the UK?

  47. Employmentpolicies(de la Porte & Jacobsson 2012) • The EuropeanEmploymentStrategy, EES 1997 • After EMU, todevelopskills, part of the LisbonStrategy • Synergiesofeconomic, labor market and social policies • Targets the continental and Mediterraneancountries • Soft policy, OMC: increasedemploymentdueto EES? • Policy frame: problem, goal, benchmarks, instruments • Contradicts the economic policy frame (EMU) • Flexi+curity, employability, a role for social partners • EES has become a referencepoint, butlittlechange

  48. Employmentpolicies, contd • The Nordic countries: big fit • Less quality in activation, structuralissues not reformed • The English-speakingcountries: fit • UK: Domestically driven reforms, Ireland: ESF • The Continental countries: misfit • Moreactivation, ”Modèledanois”, Hartz reforms • The Mediterraneancountries: misfit • Moreflexibility, less security (oppositeofsocial investment) • The EastEuropeancountries: lowspending • Activation and flexibility, weak social partners

  49. Work-familypolicies(Morgan 2012) • Femaleemployment, gender equality, childcare • Pioneers: France, Norway, Sweden • Path-shifters: Germany, Netherlands, UK • Slow-movers: Austria, Italy, Spain • Politicalforces: new ideas? Barriers? • Electoralstrategies (Sweden and Norway) • The representation ofwomen in politics • General conservatism in the slow-movingcountries

  50. Active labor market policy(Bonoli 2012) • Ambiguousconcept. Four (six) types(table 7.1): • Investment in human capital? (or incentivestowork?) • Pro-market orientation? (or temporaryjobs?) • Spendingprofiles in sixcountries (figure 7.1) • General decline 1995-2005, except the UK • Reductionof ”jobcreation”, increaseof ”employmentassistance”, declineof ”training” • Spendinglevels: Nordic, Continental, UK • From education (60s), via occupation (70s) to re-entry (90s). Laggards becomeleaders: Denmark, UK.

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