Chapter 8 Limits to State Intervention into the Private Sector Economy: Aspects of Property Rights in Social Democratic Societies

Abstract

The recent reform in Norway on the gender composition of boards of directors in public firms, requiring boards to have at least 40 per cent of each gender, inevitably raises general questions concerning state regulation of property rights. What are the normative limits to state intervention? And more practically: how far could and should such interventions go? The question may be approached from several angles. The line followed here is to look into recent history in two Scandinavian countries – the most state-friendly of all existing democracies – to explore the differences between political interventions which have gained a high degree of legitimacy and those that failed or were never put into practice. In the discussion, both economic efficiency and normative concerns are evoked. Successful reforms introducing employee representatives into health and security committees, as well as to the boards of enterprises, are contrasted to the failed cases of quasi-nationalization of commercial banks in Norway and the wage-earner funds in Sweden. These results throw light on possible democratic justification and political viability of the gender quota reform.