The Swedish Welfare Model: Increased State and Societal Capacity

Claes Berg
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Claes Berg: Retired from Sveriges Riksbank

Chapter Chapter 9 in Gunnar Myrdal, 2025, pp 167-178 from Springer

Abstract: Abstract Gunnar and Alva Myrdal were instrumental in the development of the Swedish welfare state, although its foundations were laid by politicians like Per Albin Hansson, Gustav Möller, Ernst Wigforss, Tage Erlander and Gunnar Sträng. The Swedish welfare state relied on both state intervention and active civil society engagement to drive transformational pressure. Myrdals approach anticipated modern theories suggesting that a strong state and strong civil society fosters increased capacity in both sectors. The Swedish economic policy of the 1950s and 1960s, influenced by Myrdal, focused on full employment and low inflation, supported by both demand- and supply-side measures. Key reforms included universal social insurance, education policy changes, and family policies promoting gender equality. Social democracy also aimed for political hegemony through welfare policies, influencing sectors like the labor market and public education. Despite challenges, the Swedish model achieved significant economic growth, low unemployment, and equitable income distribution. However, some regulations, such as rent controls and agriculture policies, led to economic imbalances. These regulations, combined with political deviations from some of the model’s main principles, meant that the economy had difficulty adapting when external pressures increased in the 1970s.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spshcp:978-3-031-75075-5_9

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DOI: 10.1007/978-3-031-75075-5_9

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