Modern Welfare States: Scandinavian Politics and Policy in the Global AgelSecond Edition

424 Pages·2003·2.02 MB·English

by  Eric S. Einhorn

Modern Welfare States

Modern Welfare States
Scandinavian Politics and Policy
in the Global Age
Second Edition
ERIC S. EINHORN AND JOHN LOGUE
LibraryofCongressCataloging-in-PublicationData
Einhorn,EricS.
Modernwelfarestates:Scandinavianpoliticsandpolicyintheglobalage/EricS.
EinhornandJohnLogue.—2nded.
p. cm.
Includesbibliographicalreferencesandindex.
ISBN0–275–95044–1(alk.paper)—ISBN0–275–95058–1(pbk.:alk.paper)
1.Scandinavia—Politicsandgovernment—1945– 2.Scandinavia—Socialpolicy.
3.Welfarestate. I.Logue,John,1947– II.Title.
JN7042.E45 2003
361.948—dc21 2002029882
BritishLibraryCataloguinginPublicationDataisavailable.
Copyright(cid:1)2003byEricS.EinhornandJohnLogue
Allrightsreserved.Noportionofthisbookmaybe
reproduced,byanyprocessortechnique,withoutthe
expresswrittenconsentofthepublisher.
LibraryofCongressCatalogCardNumber:2002029882
ISBN:0–275–95044–1
0–275–95058–1
Firstpublishedin2003
PraegerPublishers,88PostRoadWest,Westport,CT06881
AnimprintofGreenwoodPublishingGroup,Inc.
www.praeger.com
PrintedintheUnitedStatesofAmerica
Thepaperusedinthisbookcomplieswiththe
PermanentPaperStandardissuedbytheNational
InformationStandardsOrganization(Z39.48–1984).
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CopyrightAcknowledgments
Theauthorsandpublishergratefullyacknowledgepermissiontoreprintthefollowing:
Excerptsfrom“OfMaastricht,SocialDemocraticDilemmas,andLinearCucumbers,”John
Logue,ScandinavianStudies64(4):626–40.1992.Reproducedwithpermission.
Excerptsfrom“RestrainingtheGovernors:TheNordicExperiencewithLimitingthe
StrongState,”JohnLogueandEricS.Einhorn,ScandinavianPoliticalStudies11(1):45–67.
1988.Reproducedwithpermission.
Excerptsfrom“TheScandinavianDemocraticModel,”EricS.EinhornandJohnLogue,
ScandinavianPoliticalStudies9(3):193–208.1986.Reproducedwithpermission.
Contents
Illustrations vii
Preface:ScandinaviaintheEraofGlobalization ix
Acknowledgments xv
AbbreviationsandAcronyms xvii
I. UnderstandingScandinavianPolitics 1
1. StilltheSocialLaboratory? 3
2. ThePerilsofSuccess 15
II. ScandinavianDemocracyToday 35
3. IsThereaScandinavianDemocraticModel? 37
4. InstitutionsofDemocracy 53
5. PoliticalActors:Parties,Voters,InterestGroups 93
III. ScandinavianWelfareStates 145
6. ThePoliticsofSolidarity 147
7. PolicyinanInterdependentWorld 163
8. TheSocialWelfareState 191
9. ManagingtheMarketEconomy 219
10. FromIndustrialConflicttoWorkplaceDemocracy 259
vi Contents
IV. TheModelAppraised 303
11. ScandinavianWelfareStatesandTheirCritics 305
12. TheFutureoftheScandinavianModel 325
V. Appendixes 351
A. PopularVoteinScandinavianParliamentaryElections 353
B. DistributionofParliamentarySeats 360
C. GoverningPartiesandCoalitions 366
D. ElectionstotheEuropeanParliament,1979–99 376
References 379
Index 395
Illustrations
FIGURES
1.1 MapofScandinavia 6
5.1 ScandinavianPartyCoalitions,1930s–1950s 118
5.2 ScandinavianPartyCoalitions,1960s–1980s 119
5.3 ScandinavianPartyCoalitions,1990stopresent 122
10.1 TheDevelopmentofScandinavianIndustrialRelations 266
10.2 HowtheSolidaristicWagePolicyWorks 282
TABLES
1.1 Scandinavia’sGeography,Demography,andEconomy 5
3.1 DevelopmentofPoliticalDemocracyinScandinavia 39
4.1 IncreaseinWomen’sRepresentationinParliament,1960–2000 71
4.2 ParliamentaryBasesofGovernmentSupportasPercentof
Years,June1945–April2003 74
4.3 EuropeanCommunity/UnionReferendainScandinavia,
1972–2000 86
4.4 LocalandCountyGovernment,1999 89
5.1 ScandinavianPartySystems:MajorPartiesContestingthe
1998–2003ElectionsbyIdeologicalPlacement 98
viii Illustrations
5.2 SwedishPartyVote(Percent)byOccupationofVoters,1998 128
6.1 TheOriginsofSocialInsurance:DateofPassageofFirst
ComprehensiveSocialLegislation,byTypeofLegislation 149
7.1 ImmigrationandRefugeesinScandinavia,1990–2000 176
8.1 PublicSocialExpenditureTransfers,asaPercentageofGDP,
1960–99(averageforperiod) 201
8.2 ScandinavianSocialWelfarePrograms 203
8.3 SocialSecurityExpendituresbyPurposeintheNordic
Countries,1998 204
8.4 IncomeDistributionandPoverty 210
8.5 GrossandNetSocialExpendituresasaPercentageofGDP
atFactorPrices,1997 211
9.1 RealGDPGrowthperCapitaandInflation,AverageAnnual
Rates,1960–2002 221
9.2 LaborForceasPercentageofPopulationAged15to64,by
Gender,1960–99(averageforperiod) 230
9.3 ReceiptsandOutlaysofGovernmentasPercentageofGDP,
1960–99 246
9.4 SpendingonUnemploymentPolicies,asPercentageofGDP,
1985–96 248
9.5 SourcesofTaxRevenuesasaPercentageofTotalTax
Revenue,1998 251
10.1 Trade-UnionDensityinSelectedWesternNations,1950–97 263
10.2 DaysLostthroughStrikesandLockoutsper1,000Employees
inSelectedWesternNations,1960–99 281
Preface: Scandinavia in the
Era of Globalization
“A week is a long time in politics” is the way British Prime Minister
HaroldWilsononceputit.
Adecadeisevenlonger.ReviewingourearliereditionofModernWelfare
States, which appeared in 1989, we were impressed by how much had
changedinthesefewyears.ThecollapseoftheSovietUnionandtheend
of the Cold War fundamentally altered the balance of power in Scandi-
navia, permitting both Finland and Sweden to join the European Union.
ImmigrationhasincreasinglyturnedtheoncehomogeneousScandinavian
states into societies of racial, religious, ethnic, and linguistic diversity—
and put the issue of civil rights for immigrants on the political agenda.
Privatization has become fashionable, even for some of the Social Dem-
ocrats who once sawthe growth ofthe publicsector as thesurrogatefor
socialism.
The Scandinavian Social Democratic model offered capitalism with a
humanface:aredistributivewelfarestatethateliminatedpovertyandthat
wasbasedonaprivatelyowned,marketeconomy.Transferpaymentsand
socialservicesraisedthelivingstandardsoftheworstofftonearmiddle-
classlevels.Thetaxburdenwashigh,butcarefulnationaleconomicman-
agement limited the costs of countercyclical public sector spending. The
toolsofstatepowerwereusedtopromotepolitical,social,andeconomic
egalitarianism. There were plenty of strains, but those strains were pri-
marilyinternaltotheindividualScandinavianstate’ssystem.
Thismodelwaspremisedontheassumptionthatthenation-stateisthe
proper unit for making economic policy. In the increasingly globalized
economy,thissimplyisnolongertrue.Everyyearpowerseepsfromthe
x Preface:ScandinaviaintheEraofGlobalization
ScandinaviacapitalsofCopenhagen,Helsinki,Reykjavik,Oslo,andStock-
holm to the European Commission in Brussels, to the European Central
BankinFrankfurt,totheinternationalcommercialbanksinLondon,New
York, and Tokyo, and to multinational corporations in England, France,
Germany, Holland, Japan, and the United States. This has profound im-
plications for the future development of the Scandinavian Social Demo-
craticmodel.
Much in Scandinavia and in this book is still the same as it was more
than a decade ago. The political history of modern Scandinavia is un-
changed, although a bit longer. Political institutions are little changed,
although they deal with new policy issues and have an overlay of Euro-
pean Union law. Political actors—parties, interest groups—are funda-
mentally the same, although they too grapple with new problems.
Scandinavian trade unions have actually increased their already strong
position, while trade unions elsewhere in the world have lost member-
ship. The Social Democrats have been almost as dominant in govern-
mentalofficeastheywereintheirheyday.
Much,however,haschanged.Amongpoliticiansandvoters,anewgen-
eration has come of political age, solidifying party fragmentation. The
monolithic Social Democratic vote from working-class families has de-
clined as the working class has become more affluent and as the wedge
issueofimmigrationhasunderminedpoliticalclasscohesion;partymem-
bership has plummeted to half or less of what it was a dozen years ago.
Womenhavecomeofageinpolitics,providing40ormorepercentofthe
members of parliament, a prime minister in Norway, a president in Ice-
land, both president and prime minister in Finland, and the chair of the
Swedishtradeunionfederation.
The first edition of Modern Welfare States dealt with two major policy
themes.ThefirstwasthedevelopmentofthemodernScandinavianwel-
farestateintheperiodbetweenwhenSocialDemocratstookpowerinthe
depths of the Great Depression and the oil crisis in 1973–74. The second
dealt with the internally generated strains that came to the fore in the
1970sand1980s.ThetaxrevoltledbyMogensGlistrupinDenmarkand
AndersLangeinNorway;theperniciousinterplaybetweenhighmarginal
taxrates,highinterestrates,andthetaxdeductibilityofmortgageinterest
ontheeconomy;andeffortstoreformthetaxsystemtoavoidtheseprob-
lemsfiguredheavily.Sodidrisingtake-upratesforvariouswelfarestate
servicesamongtheyoungergeneration.Althoughtaxesandwelfarepro-
gram take-up rates remain issues, tax reforms and welfare adjustments
haveamelioratedsomeofthedifficulties.
WedepictedaScandinaviasubstantiallyaheadoftherestofEuropein
terms of its provision of transfer payments and social services to its citi-
zens, a region that was more egalitarian than the Continent or England,
wheredemocracywasasocialandeconomicconceptaswellasapolitical