„Anders oder ähnlich? Vergleich des Nordischen mit dem deutschen Modell“

1. „Anders oder ähnlich?Vergleich des Nordischen mit dem deutschen Modell“ Stein Kuhnle University of Bergen and Hertie School of Governance Seminar und Podiumsdiskussion:Das Nordische Modell – ein zukünftiges System auch nach der Finanzkrise? 6. September 2010; im Felleshus der Nordischen Botschaften, Berlin Email address: kuhnle@hertie-school.org

2. Model(s)? • „There is no such thing as a Scandinavian [Nordic] model“ (Stein Ringen) • „Welfare states [political systems] do not come as models“ • „The Nordic model is whatever characteristics the Nordic political and welfare systems at any time possess“ • „Lack of distinctiveness makes the German model distinctive“ (Jens Alber)

3. (Welfare) models: what’s in a name? Characterizing the Nordic countries: • Scandinavian/Nordic; • Social-democratic; • Institutional-redistributive • Beveridgean; Characterizing Germany: • Bismarckian; • Industrial-achievement; • Christian-democratic; • Corporatist-conservative; • Continental;

4. --and there are many other ”models in town” • Liberal; • Residual; • Basic security; • Radical; • Latin; • Southern; • Protestant-liberal; • Anglo-saxon; • East-European; • East-Asian; • Confucian

5. The Nordic [welfare] model • principles and institutional characteristics social rights; universalism; (modified) egalitarianism; public responsibility; service-oriented (social services; care for elderly; education; kindergartens) • outcomeof social and welfare policies equality of income distributions; little poverty; high employment; high public employment; gender equality; long-term economic growth • type of democratic governance consensual governance; participatory role of unions and employers’ associations; compromises in the labour market; established trust relations between government and interest organizations

6. The German (welfare) model • principles and institutional characteristics social insurance; status-maintenance; subsidiarity; role of (non-governmental) welfare associations; income-transfer oriented • outcome of social and welfare policies social differentation of welfare provision; high employment security; less equal income distributions and more relative poverty than in the Nordic countries; long-term economic growth • type of democratic governance less consensus than in the Nordic model, but more than in the UK model; cooperation among unions and management councils; corporatism (but with a relatively weaker role for government than in the Nordic conutries) [A broader concept of „the German model“ put emphasis on financial and industrial relations; the role of banks in the industrial and commercial sector; and the system of vocational training, apprenticeships for skilled positions]

7. Similarities • Comprehensive welfare states public responsibility and accountability; high public social expenditure; strong, well-organized public sector; • Consensual governance Consensual governance more pronounced in the Nordic countries, but commonalities are” Soziale Marktwirtschaft”; ”co-ordinated market economies”; Mitbestimmung”;interplay between unions, employers’ associations (and government): - resulting in political legitimacy and social and political stabilityBUT: decision-making responses to crises can be more efficient in the unitary Nordic states than in the federal system of Germany! (Even given the fact that the small Nordic countries have more political parties in their parliaments than Europe’s biggest country, Germany!) • Welfare models becoming more similar over time (?):development of international epistemic communities; mutual ”learning” between Nordic countries and Germany (e.g. family policies; labour market policies; pension policies); more coordinated responses to economic crises now than earlier(?)

8. Differences • Different (timing of) policy responses to „new social risks“ from the 1970s, caused by de-industrialization and development of service-based labour markets (e.g. new risks such as long-term unemployment; atypical work/careers; low-skilled single parents; low-income working mothers; low-skilled young employed; more inequality, poverty): • Germany:strengthening of employment protection; income replacement programs; early retirement schemes; little incentive for older workers to stay in, and for women to enter, the labour market. BUT, many policy reforms over the last 10-20 years. The character of the „conservative“/Bismarckian German welfare state is changing! • Nordic countries: expansion of employment through active labour market programs and public social services; incentives for women to enter the labour market: • Result: The Nordic countries vs. Germany: higher overall employment and female employment, less polarized and less unequal labour markets, less poverty and poverty gaps; better reconciliation of work and family life; higher tax revenues and also higher trust in government! • In recent years: The EU and OECD, look to the Nordic countries for inspiration (e.g. „flexicurity“; family policies)

9. Lessons from previous Nordic crisis management • Finland and Sweden in the early 1990s • Political pragmatism ruled: compromises made (especially in Finland – „rainbow government coalition“!) • Adjustments of social security systems; less generous • Adjustment of tax systems • More inequality avoided; poverty levels did not increase • Lesson: Advanced welfare states in place serve as „buffers“ in times of crisis; comprehensive welfare states make political, economic and social sense in open economies and in a globalized economy: economic recuperation is smoother and quicker; less long-term social costs

10. Some German-Nordic profiles: ranking of countries from high to low…. • total tax revenues as % of GDP (2008): Denmark, Sweden, Finland, Norway, Germany,Iceland • taxes on income and profits as % of GDP (2008):Denmark, Norway, Iceland, Sweden, Finland, Germany • income tax progressivity (data from 1990s):highest in Germany • taxing of the wealthiest (data from 1990s):highest in Germany • corporate taxes (2007):highest in Germany • standard VAT-rate (2010):highest in the Nordic countries • total employment rate (2008):Iceland, Denmark, Norway, Sweden, Finland, Germany • female employment (2008):Iceland, Norway, Denmark, Sweden, Finland, Germany • government debt as % of GDP (2008):Iceland, Germany, Norway, Sweden, Finland, Denmark

11. - income inequality

12. - poverty

13. - economic growth in different types of welfare states

14. Danke schön • Kiitos • Tak • Tack • Takk • Thank you for your attention!