Swedish Reforms Threaten the Welfare State

Due to an increasing climate of fiscal austerity and unpredictable financial markets, the longevity of even the strongest welfare states has become increasingly questionable. The resulting reforms, primarily structured around privatization, may have jeopardized the degree of social egalitarianism in the provision of social services in Sweden. Swedish social democracy is characterized by a comprehensive welfare state that provides services, “cradle to grave," to its citizens. However, the degree and transition of the welfare state have always been a point of contention.

Historically, the Social Democrats, the longest political party in power, were the chief architects of the Swedish welfare state. Social problems related to poverty were the primary catalyst for the expansion of the welfare state in the 1880's. They viewed the welfare system strategically as a tool to transform an agrarian economy with vast inequities to a more progressive and equitable society. Therefore, the Social Democrats expanded the public sector such that it could become a guarantor of egalitarianism by providing high quality social services for all citizens. This ideological frame aided the Social Democrats in vying for popular support amongst the entire citizenry which subsequently facilitated the preservation of the welfare state. However, during the 1990's, the Swedish welfare state was challenged by financial pressure and dwindling political support, not unlike that witnessed globally today.

From the 1970's until the late 1990's, Swedish political parties made severe cuts in the provision of welfare services espousing a less paternalistic and more efficient system of delivery. In 1999, the Swedish government created the Welfare Commission to evaluate the welfare development of Sweden through the 1990's. 

The main finding of the report was that a greater number of people experienced disadvantage during the time period. Overall, the report showed that distinctive class and gender differences emerged due to the privatization of welfare services. Severe financial and health problems coupled with lower wages markedly impacted laborers and women. Furthermore, mental illness and insecurity increased among younger citizens. People born outside Sweden faced poorer prospects in health, employment, income, and political resources when compared to Swedish locals. Higher fees and patient financing of medical care increased significantly in childcare, elderly care, pharmaceuticals, and dental care, which adversely impacted lower socioeconomic groups so they were less able to access services. The commission found that there was an overarching trend toward decentralization, market orientation, and user financing that has problematic consequences for social egalitarianism.

The Swedish case shows that reforms, even in the strongest welfare state, can result in decreasing social egalitarianism for vulnerable groups. It is important to note that the welfare service reforms, a function of capitalism, have been unraveling the achievements of welfare states. Of utmost significance is the recognition that increasingly unequal results will start to impact social cohesion and further deterioration in the quality of the welfare state has the potential to completely unhinge the Swedish system. Middle class opt-out from dissatisfaction is one serious consequence that has the potential to change the core of the social democratic welfare state completely away from welfare service provision. If deemed of significant importance to the citizenry, it is still plausible for Sweden to amend or redesign welfare service policies to better meet the needs of the population and reclaim its position as an internationally renowned welfare state even in times of transition.

Photo Credit: Christopher Neugebaeur