As European citizens we can count ourselves lucky to live in one of the most stable, developed regions on the planet. However with their consistent placing at the top of every index, table and graph out there, from quality of living to longest life expectancy, to happiest people, there is one group of countries that always reign supreme. The five golden boys of Europe – Norway, Sweden, Finland, Iceland, and Denmark – or the Nordic countries as they are also known, can seemingly do no wrong. Thus, a guest lecture this month from a distinguished professor on the topic of the Nordic Welfare Model, seemed like a good opportunity to learn more about Europe’s goodie-two shoes states, how they have found their success, and whether it is still a formula reaping rewards in today’s ever-changing society.
As a couple dozen students gathered into a small classroom in Celetná Street building, we were introduced to Professor Stein Kuhnle, teacher of Comparative Social Policy and Welfare State Reform at the University of Bergen. As we learned of his vast experience in giving seminars on the topic around the world, from the US to Australia, and serving as honorary professor in universities in Denmark and China, it was evident there was no better person to shed some light on the topic, and of course an honour to host him at Charles University. The welfare structure of any state has large consequences of the type of society it creates, and so an exploration of the Nordic model began, including not only its characteristics and outcomes, but also the challenges it faces, the main points of which I will subsequently discuss.
The Nordic welfare model has been dubbed with many taglines throughout the decades, from many scholars and different schools of thought. These include, ‘the middle way’, relating to how this system was born in the 1930s when the clash of ideologies was reigning over Europe, ‘the third way’, ‘the politics of compromise’, but perhaps most suitably of all is the label ‘consensual democracy’. As Mr Kuhnle familiarised us with the characteristics of the Scandinavian system, two of the most dominant themes were that of high state participation and also the importance of universalism. Essentially these socially democratic governments, financed by generally high taxation across the board, take a strong role in providing and redistributing services to its people. These services are provided to all, ‘universally’, with unlike many other European countries, residency being the sole criteria to be eligible to these services and welfare.
What may be of interest here is learning of the style of governments of these nations, perhaps here lies some unique secret to their success? Mr Kuhnle assured us that there is no magical solution that Northern Europe is following, merely guaranteeing a high level of consensus within the multi-party government, including the opposition, when it comes to decision-making. This importance on consensus means that there can be broad political compromises made on major reforms on issues such as taxes and pensions, which help see long term results and the expectation that reforms will last longer than just the current term of government. There is also a high level of participation of civil society, with a somewhat tripartite relationship between the government, trade unions, and employer associations. This focus on consultancy in policy-making contribute to the sky high scores of the Nordic countries in terms of state legitimacy, both in terms of input and output. The high level of participation and consultation also enhance the widespread equality seen in these countries whether it be through gender, regions, or income distribution.
When discussion turns to the question of the welfare state in crisis, Mr Kuhnle takes an optimistic view. He presents us a list of books throughout the past decade or so which have argued that this model in nearing its end, that it is facing a catastrophe, that it fails to address the problems of the global market and changing society. Among this list, one book stands alone, ‘Survival of the Welfare State’ by Stein Kuhnle himself, as he remains positive about the welfare model and the kind of society it creates, whilst still conceding that any open economy is vulnerable to global trends and crises. The challenges that these countries face are similar to the rest of Europe, and to be fair, it is difficult to see how any country on the continent can escape such issues as the Europeanisation of social policy and integration.
One of the major challenges not only Europe but the world has faced in the past number of years is the global financial crisis. Mr Kuhnle explains that the Nordic countries were not excluded from this and did see a decline for one or two years. However, as seems in their character, they responded well and have implemented several reforms to make their model more sustainable. These include introducing means testing, increasing individual responsibilities and adapting the pension system in response to the changing and aging demographic composition of the state. Another of these reforms in response to societal changes is that of parental leave schemes which has undoubtedly been a factor in the high involvement of women in social policy and government. Quotas on shareholders boards also assist in balancing the scales as these states graduated from ‘family welfare’ to ‘state welfare.’
So this all sounds great right? Why can’t we all implement this kind of system and live happily ever after? In response to this question of transferring the model, Mr Kuhnle makes several valid points. The first of these is history and context. In terms of the Nordic states, the close relationship between state and society is one with long historical roots, with a largely positive outcome. The same cannot be said around Europe, and herein lies another factor required with this model, a high level of trust in public institutions. With such high tax rates and thus a massive amount of funding available for public spending, maintaining trust that this money will be spent responsibly and fairly is an integral part of the welfare model and perhaps the rest of Europe’s biggest challenge in transferring to it. This level of trust needs to be built up over a long period of time and also necessary is that people see positive results that prove the government is acting in their best interests.
I think I speak for many when I say that increased accountability in government can only be a good thing and is a positive stride in building trust up between the ordinary people and the people who make decisions affecting them. If we can move away from this so called ‘institutionalised distrust culture’ throughout Europe, perhaps we can start to take efficient steps in looking after our societies through the actions of consensual and objective governments who can earn our trust. Let that be the ambition as I enthusiastically say in the words of Mr Stein Kuhnle, long live the ‘survival of the Welfare State’!
