Welfare state under pressure

Welfare state under pressure

The current economic crisis is threatening the welfare state. Many claim that the crisis makes it difficult to combine efficacy and equality of opportunity, which constitute the basis of the welfare state. Can we sustain the welfare state? Can the Nordic model survive and is it transferable to other countries?

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These were among the issues discussed at a welfare conference in Berlin, organised by the two Nordic Centres of Excellence (NCoE) on welfare and NordForsk. The conference marked the end of the two Centres, funded by NordForsk from 2006 under the NCoE scheme.  
“Nordic cooperation is high on the agenda in Berlin and is a topic of increasing interest as the welfare state is challenged all over Europe,” said Norwegian Ambassador Sven Erik Svedman as he welcomed scientists and stakeholders to the joint Nordic Embassies in Berlin.

Complex crisis

Chiara Saraceno“The welfare state is in a crisis, but it has been for the last 30 years,” said keynote speaker Professor Chiara Saraceno, from Collegio Carlo Alberto in Torino, Italy.
The professor continued by saying that this current crisis is more complex, however, and is accompanied by additional factors that put pressure on the welfare system. Problems such as unemployment and the aging population will pose challenges to the availability of welfare benefits for all.

Cutbacks to the welfare state

copy_of_Palme_200x200px.jpgThe participants at the welfare conference of the pan-Nordic embassy building agreed that the current crisis calls for continued investments in welfare. They warned against cutbacks in the welfare state such reductions in pensions, unemployment benefits and health care services. “The political solutions must extend beyond the immediate responses to the current crises to avoid duplicating the failures of the recent past,” said Professor Joakim Palme, of Uppsala University in Sweden.

Dialogue between researchers and politicians

“Researchers need to have debate and dialogue with the decision-makers,” said Deputy Director of NordForsk Riitta Mustonen.  Professor Palme agreed on the importance of dialogue, however: “As we have seen many times, policy-making is not always driven by research and knowledge,” he added.

Adapt, not copy, the Nordic model

copy_of_PeterHall_200x200px.jpgParticipating scientists from 17 different European countries and North America were somewhat divided in their views of whether the Nordic welfare model is applicable across the board. The general belief is that different states require different welfare models. According to professor in comparative political science at Harvard University, Peter Hall, each country’s unique economic system dictates its welfare needs and calls for a custom-made set-up of welfare benefits and their mechanisms. “I think the Nordic equality is refreshing, but we need to avoid conversion theories,” said Professor Hall. Joakim Palme agreed: “The Nordic model is not exportable as such. The concept needs to be designed for each national state in particular.”

Education is key

Professor Hall went on to say that Western democracies are going to have to expand on high value-added labour and that the Nordic countries have been good at matching skills with jobs. According to Hall, this is partly due to the use of apprenticeships in companies, reinforced by high quality in the formal schooling with the development of general skills that are transferable across sectors. “The success of the Finnish education system is mentioned very often in the US,” the professor said.

Transnational research angles

The two Nordic Centres of Excellence have studied different aspects of the Nordic welfare model. NordWel has focused on historical foundations and future challenges of the Nordic welfare state. “By developing transnational research angles I think we have created a new interdisciplinary standard for looking at the historical perspective of the welfare state,” said Pauli Kettunen, professor of political history at the University of Helsinki and leader of the NCoE NordWel.

Concept clarification

Bjørn Hvinden, leader of REASSESS, the other NCoE, explained that their research has focused on the concept and characteristics of the Nordic welfare model. “In the political debate we see some confusion about the notion of the welfare model, which illustrates the need to clarify that the model is something more than just how we practice welfare politics at the moment,” he says.
What is unique about the Nordic welfare model is:

  1. In the Nordic countries the ambition and ability has been high in combining economic efficacy with social equation.
  2. Common values and political consensus in the countries have led to high public acceptance for governmental redistribution of wealth.
  3. Due to close cooperation between government, employers and unions, the Nordic countries have avoided devastating conflicts in the working life. In addition this has led to relatively small differences in salaries.

NCoE learning process

Professor Ann Orloff from Northwestern University, US and member of the Scientific Advisory Board said: “These NCoEs have been truly wonderful and should serve as models for future work.”
Both Centre leaders thanked NordForsk for the opportunities they were given to build networks in the Nordic countries and across the world. The two leaders added that they had learned a great deal, and that there has also been challenges: “It has been a learning process for the Centres and for NordForsk,” Kettunen said. Senior advisor and program secretary for the NordForsk welfare program Harry Zilliacus, concurred: “The concept of the NCoE was fairly new when we started out in 2006. All parties involved have contributed to the development and continuous improvement of the scheme.”

A formal evaluation of the two NCoEs on welfare will be conducted this fall, and it’s conclusions will be presented in February 2014.

View videointerviews from the conference!

Text: Anne B. Heieraas
Images: NordForsk / Terje Heiestad

Main image: Members of the steering comittee, the Centreleaders and the program secretary:
From left: Rolf Rønning, steering comittee, Risto Vilkko, steering comittee, Pauli Kettunen, leader of NordWel, Harry Zilliacus, programsecretary NordForsk, Kenneth Abrahamsson, steering comittee, Bjørn Hvinden, leader of REASSESS, Krista Varantola, steering comittee, Steinar Kristiansen, steering comittee.
Image 2: Chiara Saraceno, Professor from Collegio Carlo Alberto i Turin, Italy
Image 3: Joakim Palme, Professor in political science from the University of Uppsala, SE
Image 4: Peter Hall is Professor in comparative politics at Harvard University