Scandinavian Unexceptionalism

Nima Sanandaji published this short book with the Institute of Economic Affairs, arguing that the Nordic countries' social and economic outcomes are not produced by their welfare states and that the international left has drawn the wrong lesson from them.

His argument has three parts. First, the Nordic countries achieved high incomes, long life expectancy, low inequality and high levels of social trust before their large welfare states were built, mostly between 1870 and 1936 under limited government and open trade. Second, the period of largest government expansion, roughly 1970 to 1990, coincided with relative economic decline, particularly in Sweden, where the country fell from near the top of the international income rankings. Third, descendants of Nordic emigrants to the United States show outcomes comparable to or better than those of people in the Nordic countries themselves, including higher incomes and low poverty rates, which he takes as evidence that culture rather than policy produces the results.

The argument is contested at each step. Critics point out that the emigrant comparison suffers from selection, that self-reported ancestry in American data is unreliable, that measures like life expectancy and inequality did improve substantially during the welfare state period, and that the Nordic countries' own reforms since the 1990s retained large welfare states while changing their mechanisms. Sanandaji writes for a think tank with a stated position, and the book is advocacy. It is worth reading for the historical timing argument, which is real, and should be set against the empirical work on Nordic social mobility.