This letter appeared in the 23 May 2009 Economist, and I am posting it with Bo Rothstein's permission.
SIR – You pointed to a shift in our understanding of which socioeconomic template is “the best” in Europe (“A new pecking order”, May 9th). The neoliberal Anglo-Saxon blueprint is in shreds, you say, and the French model, with its heavier regulation and higher taxes, is being given a second glance. However, looking at the data it is not the French but the Nordic countries that have the upper hand.
The World Economic Forum ranks the Nordics at the top for economic competitiveness; Transparency International ranks them towards the bottom on corruption; and the World Bank places them ahead of other countries when measuring the “knowledge factor”. On almost all measures of social trust and social capital, the Nordic countries come out ahead. Moreover, they have outperformed most of their neoliberal Anglo-Saxon counterparts as well as France and Germany in economic growth during the past 15 years.
Simply put, and contrary to what most economists take for granted, the Nordic countries have shown that social solidarity, high levels of taxation and economic competitiveness are not mutually exclusive. Public investment in human capital creates a sense of equality in opportunity among large segments of the population, which in turn has a positive effect on social capital. Together these factors increase economic prosperity.
Bo Rothstein
Professor of political science
University of Gothenburg
Gothenburg, Sweden
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