Dismantling the Social Democratic Welfare Model? Has the Swedish Welfare State Lost Its Defining Characteristics?

Abstract

The Swedish welfare state was often seen as the most highly developed welfare state and a model for others to follow. In the early 1990s, however, the Swedish economy was in big trouble; the state budget had enormous deficits which the government had to cover by loans in the finance market, exposing the Swedish welfare state model to the evaluation of international capital. This article describes what happened to the welfare state in the 1990s. Was it dismantled? The Swedish experience can shed some light on two competing hypotheses. Globalisation is often seen as an irresistible force that dismantles national autonomy and particularly the possibility of generous welfare arrangements. Another line of thought, however, points out that the welfare state is highly resilient to cutbacks. Cuts are very unpopular among voters and are therefore very dangerous for politicians or parties that aspire to be re‐elected. I argue that my data show that although the Swedish welfare state was reformed in many ways in the 1990s and some cutbacks were made, the welfare state has not been dismantled. Its major attributes when compared with other countries —— e.g. its generosity, universality and developed welfare services —— are almost as prominent as before the crisis. This result is in line with the thesis of the welfare state's resilience and contradicts the globalisation thesis.