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Understanding Swedish Social Democracy: Victims of Success?

  • Vartiainen, Juhana
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    The economic policies of Swedish Social Democrats were not the product of one centralized authority but, rather, a series of initiatives influenced by many political actors and inspired by egalitarian preferences. We focus on three policy areas. First, the welfare state is a central achievement of Social Democracy. Although its expansion is over, it has cemented Social Democracy's position in power and is still popular among the electorate. Second, the labour-market model is in crisis. The centralized Rehn/Meidner model is not working, coordination of wage bargaining has turned out to be difficult, and the trade unions' radical politics of the 1970s alienated Swedish employers from social concertation. Finally, macroeconomic management has had to struggle with inflationary pressures, and the overheating of the late 1980s and the subsequent deflationary shock led to a sharp increase in unemployment in the 1990s. Many of these problems are related to Social Democracy's internal strains. Copyright 1998 by Oxford University Press.

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    Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

    Volume (Year): 14 (1998)
    Issue (Month): 1 (Spring)
    Pages: 19-39

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    Handle: RePEc:oup:oxford:v:14:y:1998:i:1:p:19-39
    Contact details of provider: Web page: http://oxrep.oupjournals.org/

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    1. Hibbs, Douglas Jr. & Locking, Hakan, 1996. "Wage compression, wage drift and wage inflation in Sweden," Labour Economics, Elsevier, vol. 3(2), pages 109-141, September.
    2. Henrekson, Magnus, 1996. "Sweden's Relative Economic Performance: Lagging Behind or Staying on Top?," Working Paper Series 460, Research Institute of Industrial Economics.
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    6. Gunnarsson, Gudmundur & Lindh, Thomas, 1997. "Swedish Employment in the 1950s - Filling the Lacuna," Working Paper Series 1997:13, Uppsala University, Department of Economics.
    7. Korpi, Walter, 1996. "Eurosclerosis and the Sclerosis of Objectivity: On the Role of Values among Economic Policy Experts," Economic Journal, Royal Economic Society, vol. 106(439), pages 1727-46, November.
    8. Mikael Apel & Per Jansson, 1999. "System estimates of potential output and the NAIRU," Empirical Economics, Springer, vol. 24(3), pages 373-388.
    9. Hibbs Jr., Douglas A. & Locking, HÃ¥kan, 2000. "Wage Dispersion and Productive Efficiency: Evidence For Sweden," Working Papers in Economics 21, University of Gothenburg, Department of Economics.
    10. Assar Lindbeck, 1997. "The Swedish Experiment," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1273-1319, September.
    11. Lancaster, Kelvin, 1973. "The Dynamic Inefficiency of Capitalism," Journal of Political Economy, University of Chicago Press, vol. 81(5), pages 1092-1109, Sept.-Oct.
    12. Lundberg, Erik, 1985. "The Rise and Fall of the Swedish Model," Journal of Economic Literature, American Economic Association, vol. 23(1), pages 1-36, March.
    13. Kaitala, Veijo & Pohjola, Matti, 1990. "Economic Development and Agreeable Redistribution in Capitalism: Efficient Game Equilibria in a Two-Class Neoclassical Growth Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 421-38, May.
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