1. The Swedish Model Government Offices of Sweden, Ministry of Finance
Presented by Dylan Richard

2. What is the Swedish Model?
A social wefare strategy of inclusive growth
Main objectives of the model:
Prosperity, equity, and gender equality
Autonomy and independence
Seeks to provide publicly provided welfare services and social security systems covering Swedes “from the cradle to the grave”
Prosperity:
Should increase and be equitably distributed among citizens
High and rising prosperity is dependent upon a dynamic business sector that contributes to high productivity growth and employment
Equity:
Based on the fundamental belief in the equal value of all human beings and their equal rights to independent and autonomous lives
Gender Equality:
A central component of the equity goal in the Swedish Model
Autonomy and independence:
Prevents power imbalances
A matter of relationships between employees and employers, but also between individuals and their families
The Swedish Model aims to create a society in which individuals can maintain a good standard of living and favorable opportunities for development, independently of family and with a strong position in relation to their employers
Based on a direct alliance between the individual and the state in regards to both rights and duties

3. Who are the authors? The Government Offices of Sweden
Ministry of Finance
The Ministry of Finance is responsible for issues concerning central government finances, including coordination of the central government budget, forecasts and analyses, tax issues, and management and administration of central government activities. The Ministry is also responsible for matters concerning financial markets, consumer legislation and housing and community planning.
Important to note that the authors of the paper are the same people who created the program that the paper is talking about, which opens the door for potential subjectiveness and biased perspectives about the effectiveness of Sweden’s wefare system

4. Schematic of the Model

5. Prerequisites for the model
Sound public finances
Trust and legitimacy
High employment
Strong and equal social partners
Sound public finances – essential to ensuring that fiscal policy is sustainable over the long term and that there is fiscal space to pursue stabilization policy
Trust and legitimacy – research shows that trust is the most fundamental factor in the successful establishment and upholding of common regulations that benefits most people
High employment – has direct impact on the capacity to achieve the objectives of the Model. Needed to finance the programs and limit the amount of social transfers that are required
Strong and equal social partners – includes partnerships between employees and employers, which can be made stronger by the use of strong labor unions (Nordic countries have highest union membership rates in the world)

6. Pillar 1 – a labor market that facilitates adjustment
Coordinated wage formation
Wage conditions regulated through collective agreements made directly between social partners (employers and employees), rather than state and local government intervention
Active labor market policy
Supports mobility in the labor market
Also includes training initiatives, subsidized employment, and employment services
Effective unemployment insurance
Facilitates adjustment in labor market and creates acceptance for the need for continual structural transformation in the economy

7. Pillar 2 – welfare policy
Welfare services
Includes childcare, education, and healthcare
Social security systems
Create a more equitable distribution of prosperity
Pillar 3 – economic policy
Openness and competitiveness
Open to international competition
Stabilization policy
Mainly in the form of monetary policy
Maintain a fixed monetary value (2% annual inflation)
Welfare policy
– designed to promote high labor force participation, high employment, strong productivity growth, and competitiveness.
-Also designed to promote equality of both opportunities and outcomes.
-distinguished by a high degree of universality: cover the entire population, not just economically disadvantaged groups
Economic policy
Swedish prosperity based on the ability of Swedish companies to compete internationally
Sweden is ranked as the 9th most open country in the world according to Eurostat

8. The relationship between economic efficiency and social equity
Acknowledges a tradeoff that exists between efficiency and equity and is a key factor in the Swedish Model
More social equity requires more social programs, which require more funding (taxes). This taxes will reduce economic efficiency in the form of deadweight loss
How to limit this distortionary effect?
Properly designed incentive systems
Anderson (2015) – how systems are designed is important in relation to incentive problems and the risk of over-use of social programs.
Sweden’s answer: emphasize making rights conditional upon duties
i.e. right to get unemployment insurance conditional upon the person actively looking for a new job

9. Concluding remarks
The Swedish Model stresses growth in prosperity that is equally distributed
Interaction and cooperation between social partners (employers and employees) and with political leadership is essential to evolving the model and responding to changes in the outside world
Don’t forget about the potential biases that could affect the article being that the author is critiquing their own program
Article did not specifically identify any criticisms of the Swedish Model