Making social policy work for economic development: the Nordic experience

The Nordic welfare states offer some lessons in a development context. A main achievement has been sustainable poverty reduction. Another important lesson is that, while democratization often leads to greater pressures for social policy expansion, social policy can also contribute to democratization. The Nordic countries further demonstrate that is possible to unify social protection with a competitive and growth-oriented economy. In a number of policy areas, particularly in relation to social services and labor market policy, the Nordic countries have also become leading modernizers. The women-friendly dual-earner model not only combats poverty among families with children, but also enables women to participate in the labor market. The future sustainability of the Nordic model of social policy hinges on the number of taxpayers that can be mobilized. In order to be successful in this, governments need to take a combined, or holistic, approach, and consider both micro motives and macro considerations.