Globalization and Welfare series
Edited by Klaus Armingeon and Michelle Beyeler
Chapter 6: International organisations and welfare states at odds? The case of Sweden
Eero Carroll Have the OECD and Swedish decision-makers seen eye-to-eye on the country’s social policies? Concordance exists, but is limited – the welfare state has in many ways resisted cutbacks. Sweden has traditionally had high tax rates, a large public sector, and (until the early 1990s) low unemployment. The Swedish welfare state has mainly been seen as a political project of the Social Democratic Party (SPD), particularly since 1932 when the party first gained its sustained control of the Swedish executive (though right-centre coalition governments were in power 1976–82 and 1991–94). The development of Swedish welfare was however in no way predestined, passing through a number of stages. Compulsory employer liability for work accidents was enacted in 1901. Compulsory health care and sickness insurance followed in 1931 and 1955 respectively. Public occupational superannuation (ATP) was fully enacted by 1962, complementing the citizenship-based basic pensions (People’s Pensions) in force since 1947. Finally, increasing state subsidies to the voluntary unemployment insurance system (legislatively sanctioned in 1934) enabled higher coverage and a reduction of individual insurance fees. The expansion of public child care, education, and health care, mainly within local authorities or regional county councils (landsting), took longer – not taking off (in tandem with public employment) until the 1970s. The economic recession of the early 1990s brought about a sea change in Swedish welfare. Unemployment soared, GDP decreased, and social insurance benefits were cut back. The re-ascendant Social Democratic Party enacted the Fiscal Consolidation Programme of 1994–98, which included more expenditure...
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