Does the Welfare State Harm Economic Growth? Sweden as a Strategic Test Case

  • Walter Korpi
Part of the Social Policy in a Development Context book series (SPDC)


On a world-wide scale, economic growth rates declined markedly after the mid-1970s. In many Western countries, politicians and economists argued that the main causes for this slowdown could be traced back to distorting effects of their welfare states. Such diagnoses were often used to support significant limitations and cuts in social provisions. Welfare states are of major relevance for distribution and redistribution of economic resources among citizens in Western countries. For social scientists, it is therefore of importance to assess to what extent there is an empirical base for the hypothesized negative growth consequences of welfare states. This is important, perhaps especially for those who tend to promote welfare state policies. If major negative consequences remain unrecognized, or nothing is done to abate them, the legitimacy of the welfare state, at least in the long run, is undercut.


Business Cycle Welfare State OECD Country Causal Interpretation Economic Growth Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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© United Nations Research Institute for Social Development 2005

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  • Walter Korpi

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