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Baldur Thorhallsson and Jóna Sólveig Elínardóttir

The Nordic states have an international reputation for being among the most advanced, liberal and egalitarian welfare societies in the world, as well as being active international players. Given their small state status, however, they face similar challenges when it comes to maintaining their influential positions, both at home and abroad. The main aim of this chapter is to examine how the Nordic states have dealt with these challenges and kept the Nordic model and their active international engagement intact. It argues that the Nordic states’ responses to current challenges are based on a profound understanding of their position as small states. They use their traditional, cautious and flexible approach, as well as their consensus seeking behaviour, when responding to economic, welfare and migration problems domestically, as well as confrontations by aggressive external actors. Simultaneously, they have sought political, economic and societal shelter provided by their close allies and international organizations and use these fora to continue their active international engagement. Thus, Nordic states generally cope and even prosper despite their size and related political, economic and societal vulnerabilities.