Swedish Model: Short Retrospective Analysis

Ionela Bălţătescu and Alexandra Rusu

Revista de Economie Mondiala / The Journal of Global Economics, 2015, vol. 7, issue 4

Abstract: The present article summarizes arguments, but also historical and statistical data supporting the following theses: (a) in the mid-twentieth century Sweden has become one of the most prosperous and fast-growing economies in the world promoting free-market, free trade and a favorable business environment; (b) the establishment of the welfare state and the enforcement of radical welfare reforms in Sweden resulted in only two decades in economic downturn: unsustainable financial situation of the public finances (by increasing government spending and public debt), inflation and macroeconomic policies that generated a boom bust business cycle and economic crisis; (c) the economic principles of the Swedish model (folkhemmet) and the radical vision of welfare policies were generally abandoned or weakened in the post-crisis period in Sweden. Economic policies and reforms enforced after 1990 reflects this new approach: lower government expenditures, lower taxes and the liberalization or the reform of certain markets that were traditionally under state monopoly; (d) Swedish model is one of the best examples of how economic freedom fosters economic growth and development, whereas radical welfare policies and reforms destroys the very foundations of wealth creation: private property and free market.

Keywords: Swedish model; Swedish welfare state; free market policies; free market reforms; redristributive policies; failure of the middle way in Sweden (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:iem:journl:v:4:y:2015:id:2822000009561051

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