What Does a Study of Scandinavian Experience Tell Us about the Relationship between Globalisation and the Welfare State

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As the report declares neoliberal argumentations show that an open economy, as well as a global market where the forces of the market will make the rules, will compel all States to converge towards a neoliberal political system which will involve significant cutbacks in States’ market interventions as well as the renunciation of States’ commitment to redistribution and equality. In this sense, liberal economic principles, as are present in a global economic environment, will need to be adopted and adapted by the states as well in their programs.
This discussion researches that with strict reference to the Swedish model, some show that the model is in a significant crisis and that this crisis has started and continued during the 90s. The explanation for this crisis would be concluding the need for a state to remain competitive in the 21st century, alongside the private actors. The reason for this bears the economic justification of competition: a foreign investor is much more likely to choose a state where the economic policies the state has implemented are more permissive, less aggressive, more flexible. Why choose a state where you would have to pay an additional salary in taxes for each of your employees, when you can choose a country with a permissive legislative system and a location where you could trim your human resource related costs as close to 0 as possible? Globalization is often associated with a diminishment in state sovereignty as private actors.