Learning from the Nordic welfare model: what and how? EU Centre Singapore Working Paper No. 16, September 2013

This paper posits that the Nordic countries were able to ensure good standards of equality for its citizens, while at the same time maintaining decent levels of economic growth. This can be attributed to the Nordic countries’ more holistic approach towards social spending and their focus on uplifting the skill levels of its workforce. Thus, the notion that there must be a trade-off between economic performance and a more aggressive welfare regime should be examined more thoroughly. The debate for policy makers should perhaps be framed with regard to where the balance should be between growth and equity rather than a trade-off. Firstly, the paper will elaborate on what exactly the “Nordic model” is, based on a broad literature review. Next, the paper will unpack the key characteristics of the Nordic model and analyse if indeed expansive welfare provided through state support erodes work ethic and impact the economic competitiveness of countries. Next, the paper will provide an explanation for how the balance between economic and social objectives is maintained, in some of the Nordic countries. Lastly, the paper discusses whether the same balance can be achieved in Singapore.