The Nordic Way- shared values for a new reality?

What`s so special about the Nordic countries? Global Challenge, an independent think tank that provides solutions to global challenges relating to the fields of economy, environment and democracy, tried to find an answer in a new report that was published this week during the ongoing World Economic Forum in Davos, Switzerland. The report was written in cooperation with Investor, the largest industrial holding company in Northern Europe, The Nordic Council of Ministers, an intergovernmental collaboration between the Nordic countries, and The Norden Association, a non-profit organization aimed to support the cross-border cooperation in the Nordic region.

The Nordic countries are often found at the top in international performance indexes like competitiveness, productivity, growth, quality of life, prosperity and more. Is there a common model for the Nordic countries and if so, can this model be applied to other countries in central Europe or the USA?

The economic situation in the Nordic countries is characterized by low budget deficits, a large public sector with mostly high taxes and inclusive welfare. Norway bases its wealth on oil and gas revenues, Denmark on transport and agriculture and Finland and Sweden on manufacturing, pulp and paper, telecom and design. After suffering from a deep recession in the 1970:s and 1990:s the Nordic countries have transformed their systems into a new macroeconomic framework with independent central banks, strict budget rules, deregulation and lower benefit levels. This framework has given the countries a stable low-inflation environment and long-term political stability. Another reason for the Nordic success is a high transparency and efficiency of public institutions which gives a huge amount of social trust and leads to low levels of corruption. Also, all four countries have open economies where labor unions are positive towards new technology and innovation. Above this, all countries have a high level of education.

Let us now take a look at the individual relations in the Nordic countries. Traditionally outside observers have put a strong emphasis on social solidarity, the ability to subordinate individual interests to collective rationality. But this picture isn`t correct – on the contrary, individual autonomy is highly institutionalized through a plethora of laws and policies. Interdependency within the family has been minimized through individual taxation of spouses, family law reforms have revoked obligations to support elderly parents and universal day care of children enables women to work. This makes the Nordic countries to the most individualized societies in the world where the family has been transformed to a social institution. According to the World Values Survey (WWS) are societies in which people put a strong emphasis on individual self-realization more willing to accept the market economy both as consumers and producers which gains sustainable capitalism. Citizens who feel empowered accept the demands of modernity and are willing to make compromises to achieve economic efficiency and rational decision-making. In the US, for example, individual rights and family-values trump the state which results in lower trust in social institutions which, unfortunately, have been seen as a threat to liberty.