Does the Welfare State Harm Economic Growth? Sweden as a Strategic Test Case

Walter Korpi

Chapter 8 in Social Policy and Economic Development in the Nordic Countries, 2005, pp 186-209 from Palgrave Macmillan

Abstract: Abstract On a world-wide scale, economic growth rates declined markedly after the mid-1970s. In many Western countries, politicians and economists argued that the main causes for this slowdown could be traced back to distorting effects of their welfare states. Such diagnoses were often used to support significant limitations and cuts in social provisions. Welfare states are of major relevance for distribution and redistribution of economic resources among citizens in Western countries. For social scientists, it is therefore of importance to assess to what extent there is an empirical base for the hypothesized negative growth consequences of welfare states. This is important, perhaps especially for those who tend to promote welfare state policies. If major negative consequences remain unrecognized, or nothing is done to abate them, the legitimacy of the welfare state, at least in the long run, is undercut.

Keywords: Business Cycle; Welfare State; OECD Country; Causal Interpretation; Economic Growth Rate (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:pal:sopchp:978-0-230-52350-0_8

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DOI: 10.1057/9780230523500_8

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