A Nordic model for governance?

In its latest edition the renowned business publication The Economist, ran a special report on capitalism and the government models of Nordic countries. The major Nordic countries:

Norway, Sweden, Finland and Denmark, have been taking the spotlight in all kinds of surveys and country rankings in recent years – from economic performance to the perceived happiness of their citizens, Nordic countries have been steadily improving. The region has also become a hub for innovation, be it in business or cultural production, or even in the merging of both. The special report even says that Sweden has become the world’s centre of “thinking the unthinkable”, a reputation that once belonged to Britain.

This is why The Economist suggests that other countries can learn from the success of Nordic governance. The most widely known notion of the “Nordic model” is that of a socio-economic system that puts prime value in equality and the government’s responsibility to provide the needs of its people, a concept of governance otherwise known as "universalist" welfare states.

One of the most characteristic qualities of Nordic governance and public service is its apparent pragmatism. As The Economist article explains, “so long as public services work, they do not mind who provides them”. Nordic politics is also known for being relatively transparent and for its extensive use of technology for government transactions and affairs. Another distinctive characteristic of Nordic governance is its remarkable ability to forge partnerships – partnerships that actually work, at that – between the private and public sectors. Some have even dubbed Nordic societies (particularly Sweden) as the “middle way” between capitalism and socialism. Of course, this kind of system also has its drawbacks.

The Economist cites relatively high levels of public spending and the dependence of too many people on government benefits as some of the challenges that Nordic societies have to face. As a matter of fact, the concept of the welfare state may seem impractical and even impossible to some; but still, there is a lesson to be learned here. Especially Norway with its high income from the petroleum industry has tended just to increase public spending instead of making the hard choices. In my view this represents a large risk for my country.

The Economist says that “the main lesson to learn from the Nordics is not ideological but practical. The state is popular not because it is big but because it works. A Swede pays tax more willingly than a Californian because he gets decent schools and free health care.” This, I think, best sums up the driving force behind Nordic countries’ success, and points to the principle that other governments should emulate: a focus on results rather than on the means. The reason why Norway, Sweden, Denmark, and Finland have been coming up with efficient systems and policies is probably that they do not let traditional rules get in the way of innovation. They are not afraid to walk the unconventional path and use the seemingly “unfeasible” methods if these are the ones that would work at the end of the day. This attitude, I think, is something that all countries, regardless of the type of government or society, should adapt.

Knut Harald Nylænde is an Oslo-based entrepreneur primarily engaged in the investments sector. With degrees from Norway’s best business schools and several years of management experience up his sleeves, Knut now serves as the Chief Executive Officer of Moxie AS, the investments group which he also founded.