Monday 20 February 2017

Vaunted Nordic model is all the rage, but we mustn't ignore its flaws

Published 24/07/2015 | 02:30

The Danish/Swedish childcare system, biased in favour of state-subsidised creches, is the envy of our political class
The Danish/Swedish childcare system, biased in favour of state-subsidised creches, is the envy of our political class

Our latest political party, the Social Democrats, has expressed admiration for the vaunted "Nordic model" and thinks Ireland should adopt it. The Nordic model encompasses high taxes, but in return for excellent public services and low rates of poverty.

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High taxes are supposed to repress rates of economic growth, but the Nordic countries seem to be an exception because their growth rates are highly respectable. So why wouldn't Ireland adopt the Nordic model? It seems to have everything going for it.

A new paper issued by the Institute of Economic Affairs in the UK called Scandinavian Unexceptionalism by Nima Sanandaji looks at the Nordic model and, among other things, asks whether it is true that a big, well-funded state does not interfere with economic growth.

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