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Nordic model

Social and economic model in Nordic countries / From Wikipedia, the free encyclopedia

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The Nordic model comprises the economic and social policies as well as typical cultural practices common in the Nordic countries (Denmark, Finland, Iceland, Norway, and Sweden).[1] This includes a comprehensive welfare state and multi-level collective bargaining[2] based on the economic foundations of social corporatism,[3][4] and a commitment to private ownership within a market-based mixed economy[5] with Norway being a partial exception due to a large number of state-owned enterprises and state ownership in publicly listed firms.[6]

Although there are significant differences among the Nordic countries,[7] they all have some common traits. The three Scandinavian countries are constitutional monarchies, while Finland and Iceland have been republics since the 20th century. All the Nordic countries are however described as being highly democratic and all have a unicameral legislature and use proportional representation in their electoral systems. They all support a universalist welfare state aimed specifically at enhancing individual autonomy and promoting social mobility, with a sizable percentage of the population employed by the public sector (roughly 30% of the work force in areas such as healthcare, education, and government),[8] and a corporatist system with a high percentage of the workforce unionized and involving a tripartite arrangement, where representatives of labour and employers negotiate wages and labour market policy is mediated by the government.[9] As of 2020, all of the Nordic countries rank highly on the inequality-adjusted HDI and the Global Peace Index as well as being ranked in the top 10 on the World Happiness Report.[10]

The Nordic model was originally developed in the 1930s under the leadership of social democrats,[11] although centrist and right-wing political parties, as well as labour unions, also contributed to the Nordic model's development.[12] The Nordic model began to gain attention after World War II[13] and has transformed in some ways over the last few decades, including increased deregulation and expanding privatization of public services.[14][11] However, it is still distinguished from other models by the strong emphasis on public services and social investment.[15]

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