Despite the overwhelming success of the Irish alternative, adepts of large state interference continue to plead in favor of a Scandinavian model. Nonetheless the outdated Scandinavian policies have proved to be particularly inefficient. The Scandinavian countries have gone through a long period of steady decline with poor growth and job creation. In 1970, Sweden’s level of prosperity was one quarter above Belgium’s. By 2003 Sweden had fallen to 14th place from 5th in the prosperity index, two places behind Belgium. According to OECD figures, Denmark was the 3rd most prosperous economy in the world in 1970, immediately after Switzerland and the United States. In 2003, Denmark was 7th. Finland did badly as well. From 1989 to 2003, while Ireland rose from 21st to 4th place, Finland fell from 9th to 15th place.
Together with Italy, the Scandinavian countries are the worst performing economies in the entire European Union. Rather than taking them as an example, Europe’s politicians should shun the Scandinavian big-government recipes. If there is anything to be learnt from the Scandinavian experience it is that Scandinavia succeeds in making a more efficient use of public resources, through investment and innovation. Nevertheless even their most restrictive unemployment policies will never result in higher growth so long as they keep their Keynesian policies and excessive government in place. The best proof of the failure of the Scandinavian model may be that the Scandinavian countries themselves are increaslingly abandoning it.
