Today: Monday, 15 April 2024 year

Nordic model shows the advantages of the equality

Nordic model shows the advantages of the equality

The Nordic countries are extremely popular among the refugees, all of them are heading to the North to find the better – if not the best – place on the planet. The Nordic model definitely has many advantages, the experts believe.

All of the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) are all social-democratic countries with mixed economies. They are not socialist in the classical sense – they are driven by financial markets rather than by central plans, although the state does play a strategic role in the economy. They have systems of law that protect personal and corporate property and help to enforce contracts. They are democracies with checks, balances and countervailing powers.

To calculate the advantages of living in the Nordic states, the economists used to use the Gini coefficient measure of income inequality. In other words, it means where 1 represents complete inequality and 0 represents complete equality. the OECD data gives the US a score of 0.39 and the UK a slightly more equal score of 0.35 – both above the OECD average of 0.31. The five Nordic countries, meanwhile, ranged from 0.25 (Iceland – the most equal) to 0.28 (Sweden).

In terms of economic output (GDP) per capita, Norway is 3% above the US, while Iceland, Denmark, Sweden and Finland are respectively 11%, 14%, 14% and 25% below the US. This is a mixed, but still impressive, performance. Every Nordic country’s per capita GDP is higher than the UK, France and Japan.

The secret of such an impressive performance is Nordic countries’ features, yet the Nordic countries are small and more ethnically and culturally homogeneous than most developed countries. These unique conditions have facilitated high levels of nationwide trust and cooperation – and consequently a willingness to pay higher-than-average levels of tax. As a result, Nordic policies and institutions cannot be easily exported to other countries.