Pauli Kettunen, Professor of Political History, University of Helsinki; Jorn Henrik Petersen, Professor of Social Sciences, Southern Denmark University; Klaus Petersen, Professor of History, Southern Denmark University

The "Nordic model" of the welfare state, usually perceived as the gold standard of public assistance frameworks, is facing an existential crisis. New immigration patterns, aging populations, and globalization are combining to pose a threat to the continued viability of Scandinavia's egalitarian approach to benefit programs. Three leading scholars on Scandinavian welfare states spoke in a panel discussion of the challenges the Nordic model is currently facing.

Pauli Kettunen described the shift taking place as one where the basis of entitlement is changing from that of a citizen to that of a consumer, or from "stakeholders" to "shareholders." He described the Nordic model's unique background in the region's optimistic view that all clashes between economic interests may be resolved within the context of a solidaristic society. The problem however, is that societies are decreasingly self-contained because of both globalization, and the specific changes brought by the rise of the European Union. Intergovernmental organizations (IGOs) have infiltrated the Nordic model and promoted a redefinition of the relationship between public and private.

Klaus Petersen focused his remarks on the problem of immigration, particularly in his native Denmark. The late 1960s, he said, were the moment when the Danish welfare state "met the world" after the introduction of a guest worker program. Guest workers in Denmark became welfare state citizens, with few limitations on access to benefits, even after the flow of temporary workers was stopped in 1973. In the 1980s, however, right-wing political parties seized the opportunity to capitalize on growing resentment and opposition to entitlements for immigrants. These parties have become a permanent feature of the Danish political landscape, and gained prominence with the victory of the Danish People's Party in the 2001 elections, which has led to more restrictive immigration policies and nativist efforts to mitigate expressions of Muslim culture in Danish society.

Jørn Henrik Petersen discussed problems with the Nordic welfare state that run deeper than immigration to the core question of the legitimacy of the welfare framework. Since the 1970s, he said, there was been a growing sense of dissatisfaction with the extensive rights and privileges of the "classical" Scandinavian model, which promoted a more egalitarian society but at the expense of stifling competition. With the global rise of neo-liberalism in the 1980s, right-wing political parties offered a "New Danish Model," introducing a framework with more elements of competition and individualism at the expense of solidarity. These revisions were implicitly accepted by left-wing parties before the end of the 1980s, Petersen said, because of a failure to formulate a better alternative. The trend of neo-liberal policies has accelerated after the success of right-wing parties in Denmark's 2001 election, which brought about the introduction of individualized pension plans and private health insurance. In short, the view of the state has changed from a "political entity to a service supplier." What is most remarkable about this change, according to Petersen, is that this broad change in the framework of the welfare state has gone without discussion—a "silent transformation." The actual expenditures of most Scandinavian countries on welfare entitlements have changed little, but the underlying attitudes have, and there is little indication of what the end result will be.

Drafted by Richard Iserman
Sonya Michel, Director of United States Studies, Ph. (202) 691-4388
Christian Ostermann, Director of West European Studies, Ph. (202) 691-4176