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V. 38, No. 2, A 2004, . 204 219

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The Path-dependency of an Idea: Why Scandinavian

Welfare States Remain Distinct
Robert Cox

Abstract
Examining reforms that have taken place in the s, this article explores the hypothesis
that the most distinctive characteristic of the Scandinavian model today is the stickiness of its
reputation, rather than the institutions and policies that make up the model. Borrowing the concept
of path-dependency from institutional analysis, the article argues that because there is a strong
commitment to the idea of a Scandinavian model, there is a tendency to expand conceptions of the
model so that policy changes appear to be consistent with it.

Keywords
Welfare state reform; Path-dependency; Scandinavian model
Introduction
The Scandinavian welfare model is a powerful image of an advanced democratic society with a generous system of social support. Since the s, this
model has come under strain, as many reforms have been adopted in all
Scandinavian countries which seem similar to those adopted in other welfare states in Europe and North America: e.g. more contributory pensions,
shorter periods of eligibility for sickness and unemployment, user fees for
social and medical services, and work requirements for public assistance and
unemployment benefits.
Despite these changes, much scholarship on the welfare state suggests
that the distinctiveness of the Scandinavian model remains intact (e.g. Huber
and Stephens ; Lindbom ; Rothstein ; Kuhnle ). Scholars
who make this point acknowledge that many (neo-)liberal reforms have been
adopted in Scandinavian countries, but that they have not crossed the line
that separates the Scandinavian from other welfare models. There is, however, disagreement on this point. A carefully researched article by Richard
Address for correspondence: Robert Henry Cox, Associate Professor and Director, School of International and Area Studies, University of Oklahoma, Elm Street, Norman, OK , USA. Email:
rhcox@ou.edu
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Main Street, Malden, MA , USA

Clayton and Jonas Pontussen (; see also Fulcher ) claims that

important changes have taken place in Sweden, the quintessential case of the
Scandinavian model, and that Sweden is coming to look more like those
welfare states that make up the Continental model of welfare. Others have
put forward similar arguments for the case of Denmark (Andersen and Larsen
; Cox ). The dispute is based on disagreements over where the line
between the different welfare models is to be drawn (Goodin and Rein )
as well as over differing interpretations as to which reforms uphold the model
and which challenge it.
If the Scandinavian model has clear contours, then reforms must either
conform to or challenge the model. How can there be such dispute over the
effect of policy change on the model? This article explores one possible answer
to this question by positing that the Scandinavian model is an idea whose
core characteristics are broad and potentially in conflict. The core characteristics of the Scandinavian model are the values of universalism, solidarity
and decommodification (freedom from the market), not the specific policies
that one finds in any one Scandinavian country. The level of generalization
and the potential for contradiction between these basic values allow almost
any interpretation of policy reforms to fit some definition of the model.
The basic values of the Scandinavian model are subject to a variety of
operational definitions, and this adds to the confusion. On the one hand, some
scholars employ narrow conceptions of the model, arguing that its core values
logically lead to specific policy solutions (e.g. Rothstein ; Cox , ;
Clayton and Pontussen ). Narrow definitions, however, inevitably lead to
the conclusion that the old model is no longer relevant or, as Bo Rothstein
argues, that proposed reforms would mark a serious departure from the
model. This is because the basic principles of the Scandinavian model are
assumed to have reached near perfection during the golden age of welfare
expansion (Esping-Andersen ). Any reform after the golden age, by contrast, must mark a departure from the ideal. It is an operational problem: by
employing narrow definitions of the model, reality is doomed to disappoint.
Other scholars correct this problem by adopting broad conceptions of the
Scandinavian model. Recognizing that a number of policy combinations
could be employed in the pursuit of any specific goal, they look for evidence
whether policy reforms remain consistent with the core values (e.g. Furniss
and Tilton ; Palme ; Lindbom ; Huber and Stephens ). But
broad conceptions of the Scandinavian model lend themselves to problems
of operational vagueness and logical contradiction. The problem is twofold.
On the one hand, broadly defined values allow for many varied interpretations as to which reforms are appropriate and encourage dispute over the
appropriateness of the policy instruments. On the other hand, there are
different assessments of which value takes priority for a selected policy.
Though the three core values are related and often support each other,
occasionally they stand in conflict. When the values are in conflict, deciding
which takes priority has a strong impact on whether the policy change is or
is not seen to be consistent with the model. Occasionally, scholars who see
a policy reform as a logical result of universalism differ from those who see
solidarity as the priority for that particular policy.
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Narrow conceptions of the core values require specific policy solutions.

Broad conceptions of the core values allow for a number of different policy
combinations. Differences between these narrow and broad conceptions of
the core values are one of the major sources of dispute. Despite its potential
for value conflict, and despite the vague policy prescriptions that the core
values provide, the idea of a Scandinavian model continues to provide a
strong point of identity for policy-makers and the general public in Scandinavia.
This attachment to the idea of a Scandinavian model, despite the potential
conflict among its basic values, allows for what I call the stickiness of the
models reputation.

The Path-dependency of Ideas

Scholars agree that the distinctive characteristics of the Scandinavian
model are its particular combination of the values of universality, solidarity
and market independence (decommodification). Here there has been general
agreement over time that these are the important values, and debates over
the efficacy of the model center on interpretations of whether the era of
austerity has disrupted the ability of Scandinavian welfare states to successfully promote these values. The stickiness of the Scandinavian model arises
because these core values continue to dominate expectations of what should
happen, as well as interpretations of what has happened to Scandinavian
welfare states. To study the values that underlie welfare policies requires an
ideational perspective, a perspective that has gained in prominence in recent
years.
In the burgeoning literature on the role of ideas in politics, there are two
directions taken by most of the research. In the first approach, the emphasis
is on identifying the causal effect of an idea on a specified outcome. This line
of research has done much to illuminate the role of ideas in changing the
preferences of actors (Blyth ), bringing together political coalitions
(Berman ), or changing the course of political development (Rochon
; Torfing ). Yet studying the causal significance of ideas can be
methodologically frustrating because one can only prove that ideas matter
when they cause a change to occur. It is fairly easy to demonstrate when ideas
were decisive in affecting a certain event, but it is harder to demonstrate that
ideas matter when their impact cannot readily be seen, for example when no
change has taken place. Moreover, for research of this type, the emphasis is
usually on new ideas. In other words, it is new ideas that shift the priorities
of actors and thereby facilitate change. Old ideas, the assumption holds, are
the foundation for preserving the status quo. Both these limitations make it
difficult to use this ideational perspective to study the Scandinavian model.
Because the model is not a new idea, it cannot cause these new reforms.
Yet another perspective seeks to address this concern by exploring how
ideas have a constant impact on everyday life, even when no dramatic
change occurs. Everyday ideas help people develop cognitive maps of the
world and interpret complexity. This approach to the study of ideas draws
heavily from Max Webers factvalue dichotomy, and has recently been
elaborated by Peter Hall (). According to Weber, a large part of our

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understanding of the world is constructed. This is not to say that we imagine

reality, but our perception of reality is filtered through our values and preferences, causing us to highlight some aspects of reality as more important
than others and thereby to create an understanding of the world that has
a decided bias. These values and preferences help us to define strategies
for action and are an important reason for the political goals we choose to
pursue. Therefore, values and action reinforce one another. Values influence
action, action helps to reinforce the values that inspire it, and so on. In this
approach, ideas are the linkage mechanism between values, which are fairly
constant, and immediate circumstances, which change.
This article employs this second approach to the study of ideas, positing
that the stickiness of the Scandinavian model arises because, though there is
strong agreement on the core values of the model, these three values have a
potential to lead to conflicting policy prescriptions. Therefore, while scholars
recognize the same basic values, the way they define them and the particular
emphasis they place on one value over another in interpreting a particular
policy change will allow for a variety of interpretations of the impact of
welfare reforms.
The core values of the Scandinavian model are not only important to the
scholars who observe the model, but they are widely shared by the citizens
of Scandinavian countries and constitute an important component of national
identity in those countries. When political values possess this degree of
shared attachment, they create what March and Olsen () called a logic
of appropriateness for the consideration of policy options. Because of the
strong attachment to values, some policy options will be viewed more favorably than others. In the process of promoting reform, policy leaders appeal
to the shared values to gain support for their reforms. But, because these
abstractions are so broad and encompassing, they often are difficult to operationalize with precision at the micro level. Moreover, across different micro
phenomena, there might be discrepancies in the degree to which specific
events actually conform to the model. At the same time, different values
might lead to different policy prescriptions. If policies represent a combination of numerous values, which values are deemed most crucial will afford
a greater appropriateness to some policy options than to others. The model,
therefore, can cover a lot of inconsistency and contradiction.
These points are especially important when assessing the relevance of a
welfare model in a changing environment. If the model offers a picture of
reality, and reality changes, does the model do the same? If the model is strict
in its connection between values and policy options, then the model would
necessarily change, or become irrelevant as policy changed. But, if the model
were conceptualized broadly, incorporating values that had very general
application, or which even potentially contradict one another, then policy
reform need not lead to a change in ones perception of the efficacy of the
model. Rather, one need only adjust the priority given to different values to
create an interpretation of the model that would resolve the conflict with the
changing policies.
This tendency to hold on to comfortable values in a changing world is
what I refer to as the path-dependency of an idea. People interpret changes
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through the perspective of the values they hold dear and seek to shift their
ideas to make the changing circumstances fit their expectations. This point
has been elaborated more fully by Peter Hall (), who argues that policy
paradigms have a powerful effect on peoples thoughts and expectations, and
that they are reluctant to alter their paradigmatic views, sometimes even in
the face of overwhelming evidence that does not fit the paradigm. Here the
causal effect of ideas is not to influence the world, but to alter our individual
or collective perceptions of it, so that our value systems are preserved. In
practical terms, the result is a conceptual stretching of our ideas to make
them accommodate change.
David Arter has presented a similar assessment of the Scandinavian
model, arguing that what is left of the model following the three decades of
welfare reform is really only the social democratic consensus that created
ideological support for the expansion of welfare states. Arters argument, like
the notion of path-dependency being sketched here, is that the values and
expectations created by Scandinavian welfare states have continued to shape
discussions of what constitutes appropriate policy reform. The result is a
conceptual reinvention of the ideological priorities that underlie social
democratic consensus. Insightfully described by Urban Lundberg and Klas
mark (), the social democrats have managed to reinvent their interpretation of the model to accommodate change. Where they once argued
that their ideological goal was to lead the struggle of labor against capital,
Scandinavian social democrats now portray themselves as the globalization
vanguard, using the welfare state to keep their economies globally competitive. This neo-liberalization of social democracy (Arter ), has been
associated with policies of fiscal conservatism and, ironically, liberal parties
have voiced support for welfare programs to take advantage of the voter
disdain for welfare cutbacks.
The path-dependency of the Scandinavian model is a reaction to two
types of change. The first is the empirical issue of whether policy reform has
marked a change from the model. Whether it has is the question that has
dominated much of the literature on welfare reform in Scandinavian countries. The second type of change concerns a broadening of the Scandinavian
model itself. On this point, the model has been subject to less critical
reflection. Narrow conceptions of the Scandinavian model lend themselves
to specific policy prescriptions. Recently, broader conceptions of the model
have appeared which outline general principles that are sometimes vague, or
which offer new first values in place of the older ones. And these changing
conceptions of the model can occasionally lead to contradictory policy
prescriptions.

Core Values of the Scandinavian Model

Most definitions of the Scandinavian model of welfare identify three fundamental values that inspire welfare policies: universality, solidarity and market
independence (decommodification). In terms of policies and programs, however, how these principles are implemented becomes a matter of difference in
interpretation. Universalism is the fundamental principle of the Scandinavian

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model. Universalism exists when welfare programs are available to all citizens.
But there are sharp differences between narrow and broad conceptions of
universalism. According to the narrow definition, universalism requires that
welfare benefits be available to all citizens. This definition excludes programs
that require means-testing or which target certain populations as violating
the principle of universalism (Rothstein ). A broad conception of universalism, by contrast, focuses on the nature of the entitlement rather than the
benefit. Joakim Palmes conception of universalism posits
not only that entire populations should be covered within the same framework,
but also that benefits and services should be adequate enough to really
provide protection for people in different situations and with different
income levels. In order to make the system of protection work in practice, it is vital that we find techniques that, in essence, help to increase
the number of tax-payers and, whenever possible, to decrease the number of
benefit recipients. (Palme : ; emphasis added)
Palme clearly distinguished between programs that provide coverage to
everyone and those that actually provide benefits to every citizen. The narrow
conception of universalism is often applied to social insurance programs,
while the broader conception includes other programs such as universal
health care where everyone is covered, but only sick people receive a benefit.
Moreover, as Bo Bengtsson has noted in his discussion of social rights in
the area of housing policy, the distinction between universal and selective
can quickly become muddled at the level of program operation (Bengtsson
).
Indeed, Walter Korpi and Joakim Palme ( ) have argued that a
mixture of programs that provide universal benefits and those that provide
means-tested benefits constitute a stronger overall floor for social protection,
and greater security for the universality of the system. At this broad level
of conceptualization, however, it is hard to distinguish the universalism in
Scandinavia from universalism in any other country, except on the level of
generosity in the system (Hicks ). At the broad level of conceptualization,
the Scandinavian model is distinctive because it provides more services and
because they are often more generous than in other countries (Greve ).
More things such as day care, elder care, employment and other services are
available in Scandinavia, but their mechanisms of delivery are varied and not
really different from how universal services are provided in countries that
represent other welfare models. Applying the broad conception to his assessment of welfare reforms in the s, Stein Kuhnle () concludes that despite
reductions in benefits across a number of programs, the basic universalism
in those programs has been preserved.
The second value, solidarity, encourages the creation of programs that
break down class divisions or regional disparities. Solidarity builds upon
universalism, because if all citizens are entitled, then the maximum scope for
solidarity can be reached. Again, narrow conceptions of solidarity are programspecific while broader conceptions offer vague outlines for policy. Narrow
conceptions of solidarity focus on the degree to which programs achieve
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redistributive ends, because redistribution demonstrates a commitment to the

least well-off in a society. Broader interpretations of solidarity are employed
to justify programs that do not redistribute but that create political coalitions
across classes. For example, earnings-related pensions in Sweden do not have
a redistributive effect, but many observers have noted that they help to create
strong political coalitions in support of the program by giving the middle
class and working class a common interest in maintaining the program (for
example, Rothstein ). But there is conceptual stretching in this broad
interpretation. The concept of solidarity, which in a narrow sense signifies
an affective attachment between people, is expanded to include coalitions of
material interests in this broader sense. Davidson () argues that this
broad conception of solidarity in Sweden should be distinguished from
Anglo-Saxon egalitarianism, which he attributes to programs that promote
redistribution.
Finally, the principle of decommodification has been an important value
of the Scandinavian model. This awkward term refers to the ability of Scandinavian citizens to live independently of the market, because their personal
choices are not governed by market considerations. Narrow conceptions
of market independence focus on the micro conditions of individuals. For
example, high-income replacement rates in pension schemes allow people to
enjoy an accustomed standard of living regardless of their employment status, and generous universal benefits allow people to participate meaningfully
in society. According to Bo Rothstein, freedom from the market means that
social programs such as old-age pensions, health care, childcare, education,
child allowances, and health insurance are not targeted to the poor, but
instead cover the entire population without consideration of their ability to
pay (: ). User fees, particularly in health care, are specifically
excluded from this narrow conception because such fees restrict the ability
of some citizens to enjoy the services.
Broader interpretations of freedom from the market, by contrast, focus on
the macro-economic relationship between the public and the private sector
in the Scandinavian model and argue that the success of the model lies in
the ability of generous, universal programs to crowd out private alternatives
for the same services. A broad conception of freedom from the market
says nothing about which services must be provided, only that when they
are available, they must be provided by the state rather than the private
sector (Furniss and Tilton : ). User fees are less problematic for this
broad conception of freedom from the market, if the fees merely strive to
contain costs and do not preclude someone from enjoying the service
(Palme ).
Thus, the basic values of the Scandinavian model lend themselves to
narrow or broad interpretations. Moreover, when combined, the importance
given to one value over another in evaluating a specific program can vary
substantially. By combining narrow and broad conceptions of the different
values, a wide variety of interpretations can be given to the reforms of the
s. This becomes even more pronounced if we consider the number of
policy areas over which narrow or broad conceptions of the model can
be applied.

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Policies and Programs of the Scandinavian Model

Universal pensions
Universal pensions are a form of income support crucial to the Scandinavian
model. Narrow conceptions of the model argue that in order to be universal,
pension benefits must accrue to all citizens, regardless of market position.
This speaks in favor of flat-rate pensions that provide equal benefits to all,
a situation closest to the Danish example. Typically excluded from narrow
conceptions of pensions are means tests, which target the poor. Occupying a
curious position in conceptions of the Scandinavian model are contributory
pensions, specifically the Swedish ATP. This pension provides benefits to all
members of the workforce, but there are differences in the level of benefits,
based on ones own history of pension contribution. On this count it violates
a narrow conception of solidarity. On the other hand, it meets the requirements for a broad conception of solidarity on largely historical grounds. As
Bo Rothstein states, the ATP historically was important for creating a bond
between the working and middle classes by creating a program from which
all could benefit (, ). Some observers, like Rothstein, see this as a
program that builds social solidarity. Others claim that it is simply a selective
benefit that appeals to the special interest of the middle class, not their
fondness for solidarity (Baldwin ; Gal ).
This broad definition allows for a more generous interpretation of changes
to pension schemes, which were dramatic in both Sweden and Denmark. In
both countries, pension reforms were based on the carefully drafted recommendations of special commissions. For example, Denmark caught up with
Swedens example by introducing a contributory pension scheme. Some have
declared this new program a departure from the universalism of the Danish
pension system. Others see it as an improvement to the model that brings it
in line with the Swedish case by helping to crowd out private alternatives. At
the moment, the size of the Danish contributory scheme is small, but adherents to each interpretation have argued that its future impact will be great
(Andersen and Larsen ; Christiansen and Petersen : ). In Sweden,
the earnings-related ATP was transformed into a defined-contribution
scheme (Anderson ). Universalism has been preserved, but government
projections indicate that most future pensioners will have lower pensions
under the new system (ibid.). In both countries, the potential controversy of
these dramatic reforms was mitigated by two factors. First, the changes are
being phased in slowly over time, and will not be fully felt for twenty years
in Sweden, and thirty years in Denmark. Second, many of the most controversial reforms were so complicated that they were overlooked in the public
discussion and therefore escaped scrutiny.
New targeting in social services
Another reform to Scandinavian welfare states is the effort to improve the
efficiency and reduce the cost of social services, the most distinctive programs
of the Scandinavian model. To a greater degree than under any other welfare
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model, Scandinavian welfare states provide social services on a universal

basis. However, many concerns have been expressed about the costs of these
services and their potential to dampen peoples incentives to work or care for
each other (Srensen ; Rothstein ). In response to these concerns,
governments have introduced three types of reforms: to improve bureaucratic
efficiency, to discourage take-up from people who do not need the services,
and to improve the incentives to work. The effect of these reforms often has
been to limit the universality of services, either by forcing some to pay for them,
or by connecting the universal right to the acceptance of a new responsibility.
In Sweden and Denmark, for example, there is now a curious paradox.
Social democrats, who control governments, have justified these reforms on
the grounds that they target the assistance at those most in need of support.
Liberals, by contrast, have opposed targeting because it adversely affects the
benefits enjoyed by middle-class citizens, who tend to vote for liberal parties
(Green-Pedersen ).
Those who favor targeting defend it as a way to preserve solidarity
by making it possible for most resources to be devoted to those most disadvantaged. However, those who see these changes as a departure from
the Scandinavian model decry the introduction of targeting as a violation of
universality. They argue that in countries where targeting is more prevalent,
such as Australia and the United States, solidarity is eroded because targeted
programs stigmatize their recipients and are underfunded due to a lack of
public support (Korpi and Palme ).
At the center of this dispute is a disagreement over which value of the
Scandinavian model has highest priority. Those who place universality paramount oppose targeting. Those who see solidarity as the primary value are
willing to allow for variations in benefits in order to ensure the most disadvantaged are given assistance. The Scandinavian model is broad enough to
provide a defense for each interpretation, even though they are in conflict
with one another.
Labor market reforms
Labor market reform has been another area of dramatic change in Sweden
and Denmark. During the golden age of the welfare state, full employment
was made possible by, and in some cases generated by, the welfare state. Strict
job tenure rules limited the capacity of employers to reduce their workforce.
Generous job training programs allowed the skills in the workforce to respond
to pressures for structural adjustments in the economy.
Deregulation of the labor market is reducing many of these conditions.
Opportunities for more flexible labor contracts are eroding the security of
employment, especially for younger workers first entering the labor market.
Financial pressures are prompting political leaders to take a closer look at the
perverse incentives in retraining schemes that made these programs function
as hidden unemployment schemes. Labor market deregulation allows for
more flexible contacts.
The key feature of the reform has been the introduction of active labor
market programs, especially in Denmark. Active labor market policy has

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been defended by asserting that there is reciprocity between social rights

and social obligations. The Danish legislation is clear in stating that the right
of citizens to work creates an obligation on the part of the state to provide
opportunities for employment. In practice, this allows municipal officials to
provide offers of work to citizens, which they must accept because the other
part of the right to work entails an obligation on the part of the citizen to
accept any reasonable offer of employment (Cox ).
Since the Lisbon summit of the European Union declared them a
desired direction for future reforms, active labor market measures have had
growing significance in Scandinavia. Yet there is a debate among scholars as
to whether these new measures actually alter the Scandinavian model. The
strictness of the work requirements does serve to recommodify labor and
establish a more punitive environment for the long-term unemployed (Larsen
). However, many observers have argued that these criticisms are overstated. Such work requirements have always been in place in Sweden, where
active labor market programs have been a core component of the welfare
state for many years. In Denmark, where the programs were a new innovation in the mid-s, many have argued that despite their neo-liberal characteristics, they actually serve as a crucial device to transform the skills of the
labor force. Therefore, they are an innovation in keeping with the proactive
tradition of the Scandinavian model (Torfing ).
Yet there is no way to resolve the question whether active labor market
policies fit the Scandinavian model. Because they were historically absent in
Denmark, they do not fit with that countrys welfare tradition. On the other
hand, they were a core component of the Swedish welfare state, but their
absence elsewhere makes it awkward to place them in the center of the
model (Schwartz ). This ambiguity allows for a variety of interpretations
of these reforms, and these interpretations do not distinguish neatly between
narrow and broad conceptions of the model.
Decentralization of wage bargaining
One of the occasionally overlooked features of the Scandinavian model
is a system of centralized wage bargaining. Centralized wage bargaining is a
combination of norms and institutions that ensure workers and employers
strive both to keep wages relatively close together and to support legislation
to establish uniform social benefits. Centralization of collective bargaining
allowed for two important results. First, it allowed for greater consistency
across the entire economy. This worked in the interests of macro-economic
planning because it provided a powerful mechanism for ensuring conformity
to economic goals. For example, centralized collective bargaining ensured
smaller discrepancies in wages across sectors and industries. Also, it encouraged compliance with macro-economic goals, such as wage restraint (Huber
and Stephens ).
Second, as a feature of the welfare state, centralized bargaining helped
to create broad-based support for legislation to create social benefits. Peter
Swenson () has outlined the economic logic of this. To state his finding
briefly, the norms and institutions of centralized bargaining enforced a
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commitment to relatively uniform wages, forcing employers to compete for

labor on the basis of social benefits. However, to avoid the adoption of endless
private social benefits, thereby undercutting the purpose of wage solidarity,
both employers and workers found it in their interests to support the adoption of legislation that would create uniform and transparent social benefits.
Thus, a cross-class coalition worked to create universal social programs that
also maintained solidarity in the work place.
Since the s, however, there has been a pronounced decentralization
of wage bargaining, especially in Sweden (Iversen ). Wage bargaining
in Denmark underwent what appeared to be a period of decentralization,
though some observers argue that the Danish pattern was little more than a
shift from bargaining within peak associations to bargaining within five cartels that continue to maintain a commitment to wage solidarity (Wallerstein
and Golden ). Despite the patterns of decentralization in bargaining, the
outcomes of wage solidarity seemed to have been preserved. Relative to
other countries, wage inequality in Scandinavian countries continues to be
small (Wallerstein ). The same is true of welfare benefits that derive from
wage bargaining, such as social insurance. These programs have preserved
their solidaristic components.
Yet effects from decentralization are visible at the micro level. Decentralization changes the way the norm of fairness is applied to discussions about
compensation and benefits. Centralized bargaining institutions have the
effect of setting a norm of fairness at the macro level. Decentralization, by
contrast, introduces a norm of fairness based on a workers usefulness to the
firm. One example of this micro logic is apparent upon closer examination
of the Danish case where the cartelization of wage bargaining actually allowed
skilled unions to break out of arrangements that tied them to unskilled
unions. Because their greater usefulness to the firm awarded skilled unions
stronger bargaining positions than unskilled unions, they were able to negotiate better packages of compensation through sector rather than centralized
bargaining.
Thus more decentralizing in the bargaining system is likely to bring with
it a growing spread in wages. In Scandinavia this pressure has been moderated by the strong social norms in bargaining that enforce compliance with
wage solidarity. However, there is growing pressure to provide other forms of
compensation outside of wages, for example, by developing more flexible labor
contracts (Iversen ; Pontusson and Swenson ). Such individualized
forms of non-wage compensation would seriously undermine the Scandinavian model. But, because they are more difficult to monitor, especially in
decentralized regimes, there is little systematic evidence of their extent.
This presents a dilemma for those who assess the continuing viability of
the Scandinavian model. If one takes a standard view of the Scandinavian
model and simply looks at traditional outputs of centralized bargaining, such
as wage inequality, one is likely to find confirmation that the model is intact.
But if one takes a broader view of the model and searches for evidence of
growing disparities in non-wage compensation, one might find evidence that
the model is being undermined. This article only provides a speculation,
rather than evidence, but the speculation offers a caution to those who might

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quickly claim that the model remains intact. During the s employers
and some workers have been keen to find alternative forms of compensation
other than wages. Scholars need to pay attention to these and their effect on
solidarity in the work place.
Decentralization of government administration
During the s, governments across Scandinavia undertook to reform their
public administrations. The structure of local government was reformed and
streamlined in Denmark and in Sweden, a process that rationalized a system
of local administration that still preserved vestiges of its medieval origins.
Local government has been the primary provider of social services, and
consequently a major employer in all countries. Two major objectives in
much of this restructuring were to realize administrative efficiencies and to
make the public administration more democratically accountable (Lane ).
An important reform that affected the provision of welfare services was
the devolution of more program authority to the local level (Burkitt and
Whyman ). Inspired by a concern over the faceless character of formal
rules, local officials were awarded more discretion to take into account individual circumstances when awarding assistance. But granting local authorities
more discretionary power increased the likelihood that universal standards
could not be preserved. One of the original inspirations for universal standards was to ensure that all citizens were treated equally. However, this had
the perverse effect of creating uniform rules that permitted no consideration
for individual needs, or even local variations in needs. Decentralization delegated more authority to local officials, allowing them more freedom to set
rules to fit their local circumstances. However, it also allowed citizens to be
treated differently depending on where they resided (Villadsen ). Here,
the dictates of universalism were thwarted by a concern for doing what is
locally appropriate. For example, in the implementation of active labor market
policies and social assistance, some localities have imposed stricter conditions
than have others, at least in Denmark (Cox ).
Yet there is a dispute over what effect this decentralization of authority
has had on the Scandinavian model. Johansson and Borell () argue that
administrative decentralization has not led to the loss of central control over
policy-making. Instead, it has changed the role of central authorities from
director to facilitator. In short, how the process of administrative decentralization affects the Scandinavian model is also open to a variety of interpretations. If one takes a narrow view of universalism, one expects the uniform
application of national standards to prevail. However, if one takes a broader
view, not tied to any specific administrative formula, also any process of
reform is compatible with the model.

Conclusions
The debate over the impact of austerity on the Scandinavian model is lively,
but is ultimately irresolvable. The difficulty stems from the fact that the
Scandinavian model is not a precise formula, but a broad guideline for the
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construction of a welfare state. Within this broad guideline, there is a potential for conflict among the basic values that inspire the model. This conflict
can allow scholars to develop widely diverging interpretations about the
appropriateness of some welfare reforms. The broader the conceptualization
of the Scandinavian model, the greater the likelihood that any reform will
conform to at least one of the primary values of the model. The willingness
of people to accept the value contradictions in the model and even to exploit
these in defense of almost any reform is what I refer to as the stickiness of
the models reputation. Because the values are so highly regarded, scholars
and policy-makers are compelled to justify their observations and proposals
for reform by making reference to those values. To the extent that these
justifications find acceptance, the more they stretch the application of the
core values, the greater the degree of conceptual stretching that comes to
characterize the model.
An ideational perspective helps us grasp the salience of this argument. Most
frequently, scholars study the welfare state through class-conflict or institutional perspectives. In many cases, the role of values and ideas in structuring
the preferences of actors has either been assumed to be unproblematic (e.g.
most adherents to the Scandinavian model) or has been studiously ignored
(Pierson ). Those who have sought to include values in the formulation
have done so largely as an endogenous variable. Because the ideas and the
values of the welfare state have not been considered central, when they have
been incorporated into explanations of the Scandinavian model, they have
been defined in inconsistent ways.
Ultimately, the Scandinavian model is not a formal model that lends
itself to rigorous analysis (Goodin and Rein ). Indeed, it is not even the
Weberian ideal type that has a few core characteristics (Wincott ).
According to Max Weber, real-world examples never completely correspond
with the type, but they should approximate the core characteristics. Instead,
the Scandinavian model has developed such ambiguous definitions that it is
little more than a descriptive label for the welfare systems that exist in Scandinavian countries. Due to changing policies, and the desire to view these
changes in light of the idea of a model, the model itself has been shot full of
contradictions and inconsistencies.
Yet the Scandinavian model continues to have considerable power to
structure the beliefs, expectations and political strategies of people in many
countries. Even outside of Scandinavia, the idea of the model is invoked by
welfare opponents as an evil to be avoided, and by welfare advocates as a
civilized example towards which to strive. At this level of abstraction, however,
the correspondence between the ideal of the model and the real world of
policy is not important. Important is the fact that people believe in the model
and that they shape their goals on those beliefs. This is the path-dependency
of the Scandinavian model.

Acknowledgements
Two earlier versions of this paper were presented at the Structure of Governance Conference, Washington, DC, May and the th Annual

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Meeting on Socio-Economics, LEST, Aix-en-Provence, France, June

. I am grateful for comments from Graham Wilson, Bert Rockman,
Harvey Feigenbaum, Joel Aberbach, Scott Greer, Bent Greve and Cathie Jo
Martin.

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