Date: 21/09/2022

Relevance: GS-2: Comparison of the Indian constitutional scheme with that of other countries; effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

Key Phrases: Politics of Sweden, Scandinavian countries, Nordic countries, Social democracy, Socialism, Organization for Economic Cooperation and Development (OECD)

Context:

• In the recently held general elections in Sweden a fractured electorate mandate has left major parties to seek support of coalition partners.

Background

• The ruling Social Democratic party returned as the single largest party with only 107 of the 349-seat strong Riksdag (Swedish legislature) but unable to form government as it lacks required numbers even with the support of its partners.
• A coalition led by the Moderate Party is expected to form the government with support of Sweden Democrats, a party with its origins in the neo-Nazi movement in the country has created uproar in the political circles.

A threat to the Nordic model

• The rise of Social Democracy is polarizing Sweden’s society through its political agendas and threatens the political and social consensus driven Nordic model (sometimes termed as democratic socialism).

Understanding socialism and social democracy

• The Political-economic system prevalent in the Scandinavian countries is based on a strong welfarist basis and emphasis on collective bargaining.
• Although it is called as democratic socialism, it is different from the “socialism” associated with the regimes of the erstwhile Communist bloc.
• The communist socialism was based on state ownership of the major means of production and a one political party system drawing its ideological basis for rule on behalf of the working class.
• Democratic Socialism, on the other hand, seeks to achieve socialist goals of redistribution and restructuring of formal democratic and liberal institutions in vastly unequal and elite driven systems.

Why is the Scandinavian model so ‘exceptional’?

• Strong social democracies
  • In the Scandinavian countries, there is reliance on representative and participatory democratic institutions where separation of powers is ensured.
  • A comprehensive social welfare schema with emphasis on social services and investment in child care, education and research etc. is funded by progressive taxation.
  • The presence of strong labour market institutions with active labour unions and employer associations which allow for
    • Significant collective bargaining, wage negotiations and coordination
    • An active role in governance and policy.
  • All these countries also follow a capitalist model of development which allows entrepreneurism and funding of welfare policies through a large degree of wage taxation in relation to corporate taxes.
• Centered around human capital augmentation
  • As of 2019 among the Organization for Economic Cooperation and Development (OECD) countries all the Scandinavian countries have the highest proportion of the workforce belonging to trade unions
    • Which is about 91% for Iceland and about 50% for Norway while the other countries lie in between the two.
  • Education is free in all the Nordic States; health care is free in Denmark and Finland and partially free in Norway, Sweden and Iceland.
  • Workers get several benefits — from unemployment insurance to old age pensions, besides effective child care.
  • Therefore, labour participation rates in these countries are among the highest in the world (even among women).
  • The five Nordic nations rank in the top 10 among OECD countries in government expenditure on health and education if calculated as percentage of GDP.
• Steps taken and results thereof
  • These countries have undertaken a series of steps in deregulation of industry and privatization of some public services since the early 1950s till the 1970s.
  • Over the years they retained the emphasis on welfare, taxation and investment compared to the rest of the world and Europe in particular.
  • This has helped these countries achieve significant outcomes — high levels of international trade and participation in globalization, economic progress, and low levels of inequality and high living standards.
  • In the most recent UNDP report, Norway ranked second among countries in the Human Development Index (HDI) and most Scandinavian countries remained in the top 10.
  • The Nordic countries ranked the highest on various indices like press freedom, gender equality and among the top 20 countries in GDP per capita (PPP, $) according to the World Bank’s recent data.

Key features of Scandinavian governance

• Relatively smaller and more homogenous populations enabling focused governance and thriving social democratic models.
• The “corporatist” model of involving interests of both capital and labour, facilitated by government, has led smoother transition from agrarian to industrial to post-industrial and knowledge/service economies
• The political presence of the Social Democratic Parties in these countries along with like-minded coalition partners has
  • Strengthen democracy in these countries.
  • Ensured favourable agricultural prices and universal social security
  • Gave less priority to issues of ownership and focused on economic expansion, more jobs and increasing tax incomes
• This has led to equal citizenship rights and pragmatic class compromises and thus highly empowered citizenry.

Conclusion

• While social democratic parties today no longer enjoy the dominant presence in the political party systems of these countries but are still the largest organized forces in most Nordic countries.
• The pole position for social democratic parties in these countries has been because of thriving labour and environmentalist movements in civil society
  • It has helped generate a political consensus on the welfarist model resulting in even conservative parties keeping them more or less intact.
• In recent times key differences have been on social and immigration related issues among these parties and some commentators believe that the rising influence of the SD in Sweden will not be a threat to its welfarist model.
• In many ways, the Nordic model of social democracy offers lessons to the developing world, including countries like India to “truly have unity despite the myriad complexities of diversities, differential internal development and histories.”

Source: The Hindu

Mains Question:

Q. “The rise of right wing or reactionary political ideology in most of the modern democracies has the potential to sever the democratic credentials.” In light of the statement, discuss challenges present before modern democracies with recent examples and suggest ways to strengthen democratic character of polity in various democratic states including India. (250 words).