The Nordic model has been challenged during the recession, but it has nevertheless proven to be adaptable and resilient. Although Scandinavian countries have had to come to terms with budget cuts, their commitment to comprehensive welfare is still strong.
According to a recent feature in the British weekly The Economist the Nordic model will be the next “supermodel” for societies and their economies. “If you had to be reborn anywhere in the world as a person with average talents and income, you would want to be a Viking,” the magazine claimed. But what exactly is the “Nordic model”? In brief: it is an economic model that combines high level of welfare and social protection with high rate of GDP. This model has been applied by the Scandinavian states since their independence, and was facilitated their relatively small size and homogenous populations. But is it a winning model? Evidence seems to confirm that it is indeed. Even if there is no lack of problems, this model has shown its positive qualities compared with the other Europeans countries. During the period of the economic crisis, Norway, Sweden, Denmark and Finland have had performed well when compare to the slowdown in the rest of Europe. The real question, however, must be: is this model that is valid for all? The response might not be so positive. The other face of this model is the high rate of taxation these countries impose on their citizens. In addition, the high level of social protection is possible largely because the Nordic countries are so small, and their systems will hardly be exportable to other countries.
In the end, the so called “Nordic model” is one of the most important examples that economic growth can be achieved even if with high taxation and comprehensive welfare – as long as the state budget has no problems.