International ideas vs. national traditions: Nordic economic and public policy as proposed by the OECD

Abstract

Through analysis of the Organisation for Economic Co-ordination and Development (OECD)’s recommendations to reform Nordic public and economic policy, this article seeks to assess the OECD’s influence on Nordic politics. OECD recommendations are placed at the juncture of internationally acknowledged ideas and national traditions – thus being potentially useful for national policy-makers trying to deal with this tension. During the post-war period the Nordic countries found an original combination of international ideas and national traditions, involving a combination of economic efficiency and social equality. The OECD acknowledges this tradition in various ways but seeks to reform Nordic public policy according to a different, and in many ways opposing logic. OECD recommendations for Nordic countries typically include lower income taxes, lower levels of social security benefits, individual level wage setting, more relaxed employment protection legislation, an increase of the labour supply and a balanced budget. In spite of existing evidence of regime stability, it is not possible to exclude OECD influence on Nordic public and economic policy as past reforms correspond in many ways to these recommendations. This, in turn, raises the question of the democratic legitimacy of the way in which reforms are prepared.

Keywords:

• OECD
• Nordic
• ideas
• power
• legitimacy

Notes

1. Nordic post-war policies may also be understood as a ‘third way’ between socialism and capitalism, cf. Thesis Eleven special issue 77(1), 2004; Hilson 2008.

2. The OECD has published a follow-up series on the Reviews on Regulatory Reform entitled Better Regulation in Europe. Produced in association with the European Commission, the focus of this series is different from that in the previous reviews shifting from a focus on the management of the economy to management practices themselves (i.e. from the perspective of the economist to that of the lawyer). Hence, these recent reviews are excluded from this study in order to maintain consistency in the source material.

3. More recently the Swedish central bank, along with many other central banks, has started to abandon this belief in connection with events associated with the global financial crises that began in 2008.