The Decline of the Swedish Model

The international literature on the Swedish model has failed to realize the severity of its economic crisis. The Swedish malaise is entirely home-made and started much earlier than international commentators realized. The sharp downturn in the performance of the public and private sectors in Sweden is a result of the overemphasis on the public sector, upsetting the earlier established balance between markets and politics. Since 1975 Sweden has been ruled by a distributional coalition that has not yet provided reforms that can take the country out of its economic difficulties.