Nordic Model: Welfare States, Globalization, and Social Policy
The Nordic Model
The Nordic Model represents a prototype of the welfare state with a societal and universal character. Through public policy efforts involving budgetary, political, and administrative measures, it aims to achieve the welfare of its citizens. Like other models, it has been greatly affected by globalization.
The Nordic countries are regarded as a distinctive group, representative of a social democratic system. This analysis draws on Kosonen Pekka’s (2001) work, “Globalization and the Nordic Welfare States,” which describes the relationship between globalization and the welfare states of Denmark, Finland, Norway, and Sweden.
The Nordic Model is characterized by several principles, which Pekka Kosonen called the “Nordic normative legacy.” From this model, a number of legitimate economic and social requirements arise:
- Universality and equality of social rights for all individuals and social groups.
- Government accountability.
- Income equality and gender equality.
- Pursuit of full employment.
Universality in social policy refers to how every citizen is entitled to services and transfers from the state. The public sector plays the main role in the distribution and supply of insurance and social services. Equality always refers to two aspects: the redistribution of income and gender equality. High levels of employment have been a feature in these countries as a redistribution mechanism and funding source for welfare policies.
All these elements have been possible not only because of the “Nordic normative legacy” but also as a result of similar economic and political structures. Small economies are based on national systems of production with a clear export orientation. The policy has been defined by a distinctly social democratic approach, highlighting agriculture, as the social structure is composed mainly of workers and farmers. Moreover, the labor market has allowed the access of women, whose participation has been high.
The main economic strategies and welfare policies have been a state issue, so they have not been affected by changes of government. This shows the overlap between them on the basic elements that make up well-being. Thus, changes in social policy cannot be simply attributed to the process of globalization, and the main issue for analysis is whether the “Nordic normative legacy” remains in force or if it has changed.
Full employment has lost its primacy to objectives such as stability and a balanced budget, despite the fact that all governments have full employment as a priority. Both in employment policies and in other social policies, the line of work (“work line”) was principal. The young unemployed, for example, have to participate in specific educational programs and perform some type of work, not only receive financial aid.
Regarding the social goal of equality, there is increasing acceptance of lower wages for young people, besides reducing taxes on Norwegian and Swedish products in order to encourage job creation. The principle of equality is considered a security, and redeployment continues, despite the problems of the labor market, which can be explained by the universality of taxes and the value of equality.
Solutions to social issues from the private sector have greater acceptance and implementation. The state social services have reduced their workforce in the name of efficiency. Although new players have come into play that make up the ‘welfare mix’, public accountability in service provision and maintenance of security is still prevalent. Universal social rights continue to be advocated by most social groups and political forces. In practice, one can detect the relation between income level and insurance or social assistance received. For the first time, long-term unemployment tends to be excluded from social benefits, and citizenship to attend new internal divisions so far unknown.
The vulnerability and sustainability of the Nordic models to globalization is the next step in the analysis. The high level of social spending and taxes could be considered to become vulnerable in the context of the international market.