The Nordic Model - Its Arrival and Decline

Abstract

The traditional administrative and social model of the Nordic countries, called "the Nordic model", arrived politically after the Second World War in the wake of the brake-through of Keynesian economic theory. Typically for this model was that it favored extensive state intervention to achieve full employment and social redistribution. It aimed at maintaining effective demand not only by economic intervention but also by regulation for social equality and fairness. Strong employee and trade unions were part of this model. Political stability was the outcome of this policy. The Nordic welfare model is often called the «the Keynesian welfare state». The universal welfare arrangement and social security scheme of the model continued flourish until the brake through of neo liberalism. Over the last twenty years the Anglo-Saxon neo-liberalism has penetrated the Nordic countries step by step with the consequence of threatening the model itself. First and foremost, this penetration is found as policies for the breakdown of public service monopolies, privatization, the exposure of public sector activities to market competition, and lastly the liberalization of the labor market. As political rhetoric the Nordic universal welfare state and social security scheme continues; but what about the institutional reality? The discussion in this paper is about how long the Nordic model could be said to be a survivor. For the time being it is the ideology of neo liberalism which guides social and administrative model arrangements in Europe, including the Nordic countries, led to a large extent by the EU.