The Nordic Model - Embracing globalization and sharing risks

More documents

Recommendations

Info

cism of (interventionist) policy failures played some role. Rather, regulatory and other policies were adjusted under the pressure of events. What originally was a commitment to free trade, developed – under the influence of the internal logic of globalization – into a policy embracing the market. The increased prominence given to market-friendly policies may in hindsight be seen as having contributed to the successful changes that have since taken place in the Nordic economies, and which have helped them to cope with the challenges of new technologies and new competitors. Also, in the new environment the Nordic countries have reoriented their policy concern about competitiveness towards policies that pay more attention to the supply side of the economy and that support R&D and innovation. The claim that the Nordics are complying with and exploiting market forces rather than suppressing them is supported by the data reported in figure 2.1, which shows the OECD’s index of the strictness of employment protection legislation (EPL, vertical axis) and its index of the strictness of product market regulation (PMR, 4.0 3.5 Por 3.5 EPL 3.0 Spa Fra Gre 3.0 Swe 2.5 Bel Ger 2.5 Net Ita Fin Aut 2.0 2.0 Den 1.5 1.5 UK Ire 1.0 1.0 0.8 1 1.2 1.4 1.6 1.8 2 4.0 Labour market, Product markets, PMR Figure 2.1 Regulation in the EU15, 2003 EPL = Summary indicator of employment protection legislation. PMR = Product market regulation. Source: OECD Economic Surveys: Italy-OECD (2007). The Nordic model: myth or reality? · 35
horizontal axis). These indices are broadly based and systematically compiled; they are the best available measures for international comparisons of regulation in product and labour markets. As is seen, the indices are strongly correlated, though regulation in Sweden is tilted towards the labour market and regulation in Italy in favour of the product market. It also appears that the EU15 countries fall rather neatly into four familiar categories. The Anglo-Saxon countries are the most liberal, having the highest ranks for EPL and PMR (except for Denmark). They are followed by the Nordics, notably Denmark, and then by the Continental countries, while the Mediterranean countries are the ones most bent on regulation according to both indices. While broadly based, the indices reported in figure 2.1 arguably do not suffice to characterize the attitude of member states to the market mechanism. However, there is a wealth of other information pointing in the same direction. The Nordic countries rank very high in terms of the index for “Ease of Doing Business” (EDB) produced by the World Bank Group. Denmark, Sweden and Finland are all among the top 6 performers in the “Global Competitiveness Index” published by the World Economic Forum. The Nordic countries have a good track record with regard to transposition of and compliance with Community legislation for the internal market. In the area of banking, Denmark and Finland nowadays have low regulatory barriers to competition and all the Nordic countries have relatively light rules for prudential supervision (de Serres et al. (2006)). Turning to a wider perspective, there is an extensive “economic freedom index” compiled by the Fraser Institute, and a globalization index developed by a Swiss institute (the “Konjunkturforschungsstelle” in Zurich). Both of these indices give high ranks to the Nordic countries, and the ranking between groups of countries is roughly the same as in figure 2.1. According to Bergh (2006), the Nordic countries have in the past decades improved their ranking significantly according to both indices. It is also interesting to note that Denmark, Sweden and Finland are among the six top nations in the world (with Singapore, Hong Kong and Norway) in the subindex of the EDB measuring external openness, that is, the “trading across borders”. Markets in the Nordic countries are less tightly regulated than in Southern Europe and the Continent 36 · The Nordic Model
Page 1 and 2: The Nordic Model Embracing globaliz
Page 3 and 4: ETLA B232 ISBN 978-951-628-468-5 IS
Page 6 and 7: THE AUTHORS Torben M. Andersen is P
Page 8 and 9: CONTENTS PREFACE THE AUTHORS 1 INTR
Page 10: 8.5 The future of public services -
Page 13 and 14: Globalization is primarily an oppor
Page 15 and 16: ices financed by taxes, which are h
Page 17 and 18: 14, respectively, out of a total of
Page 19 and 20: are the effects of technical change
Page 21 and 22: - and, particularly, their effect o
Page 23 and 24: not contesting economic growth as t
Page 25 and 26: 1.6 AN EFFECTIVE WAGE BARGAINING PR
Page 27 and 28: etter be tried in individual cases
Page 29 and 30: The scheme of the social contract c
Page 31 and 32: is worthy and realistic. But the de
Page 33 and 34: supportive interaction of openness
Page 35: The financial deregulations in the
Page 39 and 40: does can nowadays be seen, in a bro
Page 41 and 42: employment increases in the public
Page 43 and 44: are not at the top of the league, t
Page 45 and 46: ENDNOTES 1 Wikipedia refers to popu
Page 47 and 48: consider employment and productivit
Page 49 and 50: from the mid-1980s. Finland has gra
Page 51 and 52: % 7 6 5 4 3 2 1 0 IT expenditure, %
Page 53 and 54: As technological change is to a sig
Page 55 and 56: 3.3 SOCIAL EQUALITY Economic effici
Page 57 and 58: 0.9 0.8 0.7 Net Fin Den 0.9 Composi
Page 59 and 60: ANNEX: GROWTH ACCOUNTING The Nordic
Page 61 and 62: sources of GDP growth in the EU15,
Page 63 and 64: 11 These decompositions have been c
Page 65 and 66: 4.1 THE WELFARE STATE AS A SOCIAL C
Page 67 and 68: The extent, coverage and quality of
Page 69 and 70: % % 80 80 60 60 40 20 0 OECD max Fi
Page 71 and 72: % 80 Total Old age % 80 60 60 40 40
Page 73 and 74: tem is seriously affected. Today, t
Page 75 and 76: Historically, however, the share of
Page 77 and 78: More children. Since the problem is
Page 79 and 80: Actually higher growth may make the
Page 81 and 82: dependency ratio driven by the baby
Page 83 and 84: 82 · The Nordic Model
Page 85 and 86: to handle much bigger fields today,
Page 87 and 88:
Table 5.1 Projections of public hea
Page 89 and 90:
5.4 AN EASY FIX - BRING SERVICES BA
Page 91 and 92:
Box 5.1 Growth and the welfare stat
Page 93 and 94:
it implies that the long-run defici
Page 95 and 96:
The level of taxation is already hi
Page 97 and 98:
One may ask why this problem arises
Page 99 and 100:
globalization may contribute to bot
Page 101 and 102:
able to pay to seek private solutio
Page 103 and 104:
102 · The Nordic Model
Page 105 and 106:
ily policies that Nordic demographi
Page 107 and 108:
absolute and relative terms than hi
Page 109 and 110:
in the participation decision of th
Page 111 and 112:
Table 6.2 The activity rate, aggreg
Page 113 and 114:
Thus, responsible unions should res
Page 115 and 116:
als take part in various unemployme
Page 117 and 118:
Box 6.2 What is the Danish “flexi
Page 119 and 120:
ENDNOTES 1 In his history of the ec
Page 121 and 122:
particularly noteworthy in a euro a
Page 123 and 124:
7.2 COORDINATION AND DECENTRALIZATI
Page 125 and 126:
also depends on the business cycle.
Page 127 and 128:
ut not in any dramatic way (cf. fig
Page 129 and 130:
displays higher nominal rigidity th
Page 131 and 132:
model stem from an age in which the
Page 133 and 134:
mostly in the years 1980-2000. For
Page 135 and 136:
Table 8.1 Government expenditure by
Page 137 and 138:
ure. This selection bias alone will
Page 139 and 140:
that everyone gets their worth as m
Page 141 and 142:
8.3 THE CASE FOR GOVERNMENT PROVIDE
Page 143 and 144:
maximizing firms tend to focus exce
Page 145 and 146:
than zero based budgeting) are impe
Page 147 and 148:
sectors, place at or above the medi
Page 149 and 150:
The demands for objectivity limit w
Page 151 and 152:
assessed case by case. The importan
Page 153 and 154:
c. Vouchers Vouchers are issued by
Page 155 and 156:
mechanically in the political debat
Page 157 and 158:
ENDNOTES 1 The private sector inclu
Page 159 and 160:
The biggest hurdle to overcome for
Page 161 and 162:
ment has a higher return when spent
Page 163 and 164:
REFERENCES Adema, W. and Ladaique,
Page 165 and 166:
Jonung, L. and Hagberg, T. (2005):
Page 167:
Is there a Nordic model? What are t
show all

The Nordic Model - Embracing globalization and sharing risks

Create successful ePaper yourself

Delete template?

Save as template?