Foreign sector and welfare state in Sweden: From complementarity to tensions

Luis Buendia, Juan Barredo and Juan Balay
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Juan Barredo: CREG - Centre de recherche en économie de Grenoble - UGA - Université Grenoble Alpes, UPV / EHU - Universidad del País Vasco [Espainia] / Euskal Herriko Unibertsitatea [España] = University of the Basque Country [Spain] = Université du pays basque [Espagne]
Juan Balay: Chercheur indépendant

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Abstract: In this article, we analyse the relationship between the foreign sector and the ‘Swedish model' of welfare state since the 1960s. The initial hypothesis is that the old relationship between the foreign sector and the Swedish welfare state during the expansion phase of the latter was mainly complementary, almost symbiotic, thus adhering to the compensation thesis. We ascertain that the different reforming waves of the late twentieth century transformed this relationship into one where the foreign sector became a source of distress, creating certain incomplementarities in the model. After reviewing the historical links between both, we examine their evolution over recent decades, paying special attention to transformations prompted by the process of globalisation. We conclude that the efficiency thesis best explains the current links between the foreign sector and the welfare state in Sweden.

Keywords: foreign sector; welfare state; compensation thesis; efficiency thesis; financialisation (search for similar items in EconPapers)
Date: 2022-12
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Published in Structural Change and Economic Dynamics, 2022, 63, pp.310-319. ⟨10.1016/j.strueco.2022.10.005⟩

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Journal Article: Foreign sector and welfare state in Sweden: From complementarity to tensions (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-03850882

DOI: 10.1016/j.strueco.2022.10.005

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