Russian Academy of National Economy and Civil Service under the President of the Russian Federation
Faculty of Economic and Social Sciences

Scandinavian model: advantages and contradictions of a welfare state

Anna Olkova 3rd year student

2011

Table of contents
Introduction 3
Chapter 1. The role of Scandinavian model in economic theory and practice. 5
1.1. Scandinavian model in civilizational context: incarnation of integralism. 5
1.2. Scandinavia in European economy: comparative analysis 10
1.3. Cultural preconditions for the Scandinavian model formation. 13
Chapter 2. Model performance and competitiveness: distinctive features 16
2.1. The role of public sector in Scandinavian economies 16
2.2. Peculiarities of labour market in Scandinavia 21
2.3. Human capital and innovations: learning economy 26
Chapter 3. Scandinavian model: challenges and threats 33
3.1. Demographic challenge: ageing of population versus public finance 33
3.2. Paradoxes of economic growth in welfare states 36
3.3. The problem of labour disincentives and decommodification. 38
Conclusion 41
Bibliography 43

Introduction

In the light of a current trend of moving towards socialization in economy, Scandinavian experience stands out, being probably a unique example of building a highly-socialized and at the same time viable economy. The image of Scandinavian countries appears to be controversial in modern economic observations. On the one hand, obviously, the Scandinavians’ performance is ranked high in terms of the majority of competitiveness indicators. The main advantages of the Scandinavian economies are, probably, a peaceful labour market and an egalitarian income distribution. On the other hand, many observers note that economic incentives in Scandinavian