Like a phoenix from the ashes? Reassessing the transformation of the Swedish political economy since the 1970s

Abstract

This contribution reassesses the evolution of the Swedish model since the 1970s across different institutional spheres. It addresses two questions. Firstly, why did a system that was based on strong complementarities undergo such extensive changes? Secondly, what explains Sweden's recent return to strong social and economic performance? The decline of the Swedish model is explained by the endogenous nature of change, which was sparked off by ‘normative dissonances’ that led actors to ‘defect’ from crucial institutions, leading to knock-on effects on other spheres through changing political strategies and macro-level political coalitions. It is further argued that the new complementarities that have emerged after 1995, while providing new sectors with institutional advantages, also contain sources of normative dissonances, which make the long-term viability of the ‘new model’ doubtful.

Keywords:

• Complementarities
• institutional change
• liberalization
• Sweden

ACKNOWLEDGEMENTS

I am grateful to Richard Deeg, Tony Edwards, Gregory Jackson and participants in the ICaTSEM project meetings, as well as two anonymous referees, for most helpful comments, and to Philipp Kern for excellent research assistance. The research leading to these results has received funding from the European Community's Seventh Framework Programme (FP7/2007-2011) under grant agreement number 225349 (ICaTSEM project).

Notes

Deeg (2007) defines institutional coherence as different institutional spheres being organized according to similar ‘logics’ or ‘ordering principles’ (market-based versus extra-market co-ordination).

I use the concept of ‘normative dissonance’ in order to capture a situation that Peter Swenson described as a ‘moral economy’. He defines a moral economy as ‘a pattern of exchange relations constrained by values and traditions that societal elites impose in interaction with subordinate groups’ (Swenson 1989: 12). Swenson underscores that élites' failure to enforce the norms that they establish often leads to sentiments of ‘injustice’ among rule- (norm-) takers and provokes ‘spontaneous rebellions’. I designate as ‘normative dissonance’ a situation where rule-takers perceive ‘injustice’ owing to a (perceived or actual) discrepancy between a given institution's affirmed goals or the norms ‘signalled’ by it and the impact that the same institution has on the actors governed by it.

Steinmo (2010: 62) reports that TCO and SACO organized 18.2 per cent of the workforce in 1950, but 41.7 per cent in 1989.

Deeg and Jackson (2007) distinguish the micro level of a national business system (the interaction between institutions and rule-takers) from the meso level (the linkages between institutional domains, e.g., complementarities) and the macro level (the politics, actor coalitions and processes that govern institutional reforms).

Kristensen (2011b) seems to acknowledge this when talking about ‘experimentalist’ reactions to new contexts.

Kristensen and Lilja (2011) identify as a second important complementarity in the ‘new model’ the match between the supposedly ‘reflexive’ and non-hierarchical way of work organization in Sweden (so called ‘learning organizations’) and its fit with the New Economy that requires increasing ‘reflexivity’ and worker involvement. For reasons of space this dimension cannot be discussed here. However, see Thompson and McHugh (2002: ch. 11) for a general criticism of this well-rehearsed argument about the necessary match between more flexible, post-bureaucratic ‘learning organizations’ and the ‘New Economy’.

The average GERD for OECD countries in 2007 was 2.3 per cent; see http://stats.oecd.org/OECDStat_Metadata/ShowMetadata.ashx?Dataset=CSP2010&Coords=[SUB].[GERD]&ShowOnWeb = true&Lang = en (accessed 28 July 2012).

This agreement was renewed on 1 July 2011.

Of the workforce in this emerging domestic services industry, 90 per cent are immigrant women mainly from Poland and Russia (Gavanas 2010: 43).