The Heavenly Nordic Countries: Analysing Success of the Nordic Nations

Guest Opinion


In the world happiness report 2020 , Finland ranked 1st, Iceland 4th, Norway 5th, and Sweden 7th. In the democracy index recently released by V-DEM institute, Denmark ranks 1st followed by Iceland which is on 3rd, Norway on 5th followed by Finland on 11th. In most of the major evaluations around the world, Nordic countries are among the best performers. Scandinavian countries comprise Sweden, Norway and parts of northern Finland. The word “Nordic” has been derived from the Scandinavian language denoting northern islands. Nordic countries consist of Norway, Sweden, Finland, and also Denmark and Iceland along with the Faroe Islands.


The Nordic Model

There is the presence of a unique Nordic model that has certain characteristics that are common across Nordic countries which include a comprehensive welfare state along with a super-competitive economy. These countries have spent huge amounts of public and private investment on human capital and on creating a strong set of labor-market institutions like generous unemployment benefits and strong trade unions. The foundation of this model is often understood as a combination of collective risk-sharing and openness to globalization. The citizens of Nordic countries are not averse to globalization due to the great safety net provided by the welfare state. The process of globalization benefits through the existence of a free market in the nordic nations, and the quality of services increase due to free competition. High taxes are considered economically harmful but in the case of Nordic countries, these high-taxes have been used to support employment and growth, infrastructure, research, and child education. This kind of spending has significantly reduced the negative effects of high taxes. The nordic model operates as a kind of compensation mechanism where winners of structural change and globalization facilitate the losers and compensate them for their loss through redistribution of income through the mechanism of the welfare state.

From 2013 till now whenever the world happiness index has been published, most Nordic countries have undoubtedly been among the top ten nations in the world. Their happiness is not limited to the top positions in the world happiness index but sparkles it's flair in other areas of economy, social and political life too. Nordic countries have consistently been among the best in terms of securing political rights, state of democracy, trust between citizens, lack of corruption, gender equality, and in many other global comparisons. But what makes these geographically small countries with freezing winters, rank on the top in every sphere is a question worth pondering upon.

Decoding the Nordic Success

There are a number of factors that have contributed to Nordic success. The first factor relates to the quality of institutions. The institutions in these Nordic countries are welfare-oriented with a well-functioning democratic setup along with almost non-existent corruption. Secondly, the Nordic people experience and exercise high autonomy and freedom combined with invaluable social cohesion based on trust amongst the people which automatically leads to well-satisfied people and less corruption. Third, the Nordic welfare state model is famous worldwide for the extensive social benefits it provides to the people. The welfare state thus plays a huge role in the happiness and developmental indices of the Nordic nations. Unemployment benefits redress the much required social security for the deprived persons. Progressive taxation helps in income redistribution and also prevents the concept of some people being more equal than others. It also allows the state to invest in social welfare schemes that could be easily made available to less well-off sections of society. Fourth, the quality of government also plays a huge role in the successful development of the Nordic region. In order to assess the quality of government two parameters can be taken into account: democratic quality and delivery quality. Democratic quality can be assessed based on access to political participation, the extent of freedom of expression, right to form associations and political stability. Delivery quality can be assessed based on the prevalence of rule of law, control of corruption and government effectiveness. Nordic countries rank high on fulfilling both these criteria of government quality. Fifth, there is a major absence of economic insecurity in the lives of Nordic people, due to strengthened welfare-oriented social and economic policies of the state. For example, people in some Nordic countries can take 6 months off from their jobs to start a business, if they are not successful in the business adventure, they can join their jobs back. Economic security does play a huge role in people’s happiness. Sixth factor relates to historical developments. Nordic countries historically have not seen deep class-divides and income inequality as these countries were not characterized by the kind of serfdom and feudalism that prevailed in Russia and the rest of Europe. Farmers were relatively independent and cultivated land. The legacy of protestant religion has also contributed to the Nordic success . The prevalence of mass education in the 19th century has also led to the development of citizens who have a strong sense of national identity and social cohesion which translates into social trust and lack of corruption. Mass education has transformed into social and institutional trust which ultimately led to the formation of a comprehensive and corruption-free welfare state. The Nordic countries are caught in a virtuous cycle between the people, the political parties, and the state.

The Nordics Lead by Example

It is often argued that the Nordic countries are happier because they have a small homogeneous population. But this claim lacks evidence. The Nordic countries are heterogeneous; about 19 % of Sweden's population was born outside the country. It is not ethnic diversity that reduces trust rather it is ethnically segregated residences that do so. World happiness report 2018 proudly asserts that the ratio of immigrants within a country does not affect the average level of happiness of those who are locally born. Thus, ethnic homogeneity is no explanation for the Nordics' happiness or development. The existence of innovation and creativity has helped the Nordic nations to prosper. For example, a lot of innovative ideas have been at work in Norway but among them, one that is especially appealing is the idea of the Norwegian Oil fund. This vision for an oil fund found expression when Einar Gerhardsen and his government claimed sovereignty over the Norwegian continental shelf. It laid the foundation to the Norwegian approach to petroleum resource management in which international oil companies were given licenses to search for oil. Ekofisk , which is regarded as Norway’s first oil field, was discovered in 1969. A committee called The Tempo Committee, chaired by Hermod Skånland, argued for storing the current oil revenue and spending only the real returns by creation of funds by the government . In 1990 Norway’s Parliament passed a law to establish the Government Petroleum Fund and entailed that all assets are to be invested outside Norway and out of the interest received on the fund's investment only 4 % will be used by the Norwegian government for its domestic use, rest 96% will be again used for investment abroad. This fund is an impeccable example of how the Norwegian government not only cares for its present generations but looks and believes in safeguarding and prospering future generations. Norway's pension fund is the second-largest sovereign wealth fund in the world and has stakes in 9,000 companies across 74 countries in mainly three sectors of the world namely equities, bonds, and real estate. Similarly, one more novel feature of Norway is that on its Constitution day (May 17) there are no military parades to be seen rather children of local schools march on streets in the traditional Norwegian dress. Proud parents are busy recording their children on their smartphones. The celebrations first began when poet Henrik Wergeland in 1833 did a public address that marked the birth of constitution day and Bjørnstjerne Bjørnson launched the first children's parade in Oslo in 1870. Similarly, Finland's education system is one of the most premier education systems in the world. In Finland, 98% of education is state sponsored with only 2% coming from private coffers. Most of the parents prefer public education for their children. Becoming a teacher in Finland is also a rigorous process with only the best being able to make it through the system. Teacher’s training in Finland is research-based along with a strong focus on developing pedagogical content knowledge. Teachers are also taught how to diagnose students with learning difficulties and a strong clinical component is inherent in their training. The result of this is that Finnish teachers are professionals whom the parents trust for knowing what is good for their kids. The high-quality teachers benefit the well-off sections of students at par with less advantageous ones as more than 95% of the total students go to public schools in Finland. Now to address the elephant in the room, most Nordic countries have reported a smaller number of coronavirus infections and have been successful in keeping their death counts extremely low except Sweden. Finland, Norway, Faroe Island, and Iceland each have less than 50,000 confirmed infections as of 22 December 2020. The number of deaths has been less than 1,000 in each of these nations with only 547 cases in Faroe Island and zero reported deaths. Most Nordic countries have performed exceptionally well (except Sweden) in controlling COVID-19 infections.

Conclusion

We must learn the right lessons from Nordic countries and emphasize on developing quality-oriented institutions in our cultural and political scenario. We must culturally work towards creating a community bounded by levels of high social trust and cohesion among people. The line of identity that demarcates the “self” and the “other”, divides us into “us” and “them” will be automatically blurred with high levels of community feeling in the people as seen in the Nordic countries. The governments must become welfare-oriented in the true sense of the term and should enlarge their goals from providing services to the people to enhancing people’s happiness and well-being. It is high time when India and other countries of the world start providing at least high-quality education to children at the primary level. Lastly, we in India must also start thinking about what legacy we as a country plan to leave for our future generations? Should it be authoritarianism and majoritarianism or should it be great schools and colleges or maybe overseas investments valuing trillions of dollars along with a healthy environment and most importantly a culture of trust and cordiality? The choices that our leaders and policy makers make, will decide the destiny of our generation and of generations to come.

By Preet Sharma

BA (Hons) Political Science, Hindu College

Preet is a third year student of Political Science Hons at Hindu College. She is a simple girl who loves engaging with complicated political theories . She is also deeply passionate about cooking other than reading and writing


References

Book,The Nordic Model :Embracing Globalization and sharing Risk, Torben M. Andersen, Bengt Holmström, Seppo Honkapohja, ,Sixten Korkman, Hans Tson Söderström, Juhana Vartiainen, The Research Institute of the Finnish Economy (ETLA) Publisher: Taloustieto Oy ,2007.



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