Sweden and the Revival of the Capitalist Welfare State
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Sweden and the Revival of the Capitalist Welfare State

Andreas Bergh

This book tackles a number of controversial questions regarding Sweden’s economic and political development: • How did Sweden become rich? • How did Sweden become egalitarian? • Why has Sweden since the early 1990s grown faster than the US and most EU-countries despite its high taxes and generous welfare state? The author uses new research on institutions and economic reforms to explain the rise, the fall and the recent revival of the Swedish welfare state. The central argument is that a generous welfare state like Sweden’s can work well, provided that it is built on well-functioning capitalist institutions and economic openess.
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Chapter 4: The return of the capitalist welfare state

Andreas Bergh


During the last two decades of the twentieth century, Sweden changed so radically that it is difficult to do justice to all the changes on paper. Without a doubt, this was an eventful time across the world, but compared to other established Western democracies, the Swedish pace of change was still remarkable. This chapter summarizes the changes that took place. The Swedish reforms cover politics, economics and welfare policies, and it is difficult to distinguish which reforms have been more significant than others. In many cases it is not even possible to place the reforms in a clear chronological order, since they were under consideration for different durations of time before they finally were implemented. Appendix A contains an attempt to list the most significant changes chronologically, from allowing consumers to use answering machines from suppliers other than Swedish Telecom in 1980, to the introduction of the Swedish Telia shares in 2000. This chapter describes some of the most important reforms in more detail, and continues by asking if the changes represent the end for the Swedish model, and concludes that they should rather be seen as the return of the capitalist welfare state.

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