Transcript Economic_Crisis_and_..

Tijana Grujic
Economic Crisis and Welfare state
in Sweden and Spain
About me
 Born in Belgrade 1982
 Graduated Economics in 2009
(Belgrade University)
 Student PhoenixEM Dynamics of Health and
Welfare in 2009-2011
(Universitat Autónoma de Barcelona/ Linköping
University)
Time path
 October 2009
Familiarizing with the literature
 March 2010
Welfare State
Historical Background
Evidence of contemporary crisis strikes
 June 2010
Data extraction/analysis
Time limitations (Will society produce enough
material in meantime that could be examined by this
research?
Contents
 Introduction
 Welfare State
 Historical background of Welfare State in Sweden
and Spain
 Crisis Management
 Instead of Conclusion
Introduction
 „The crisis has hit different parts of
the World in a different ways and
intensity, but it has hit them all,
regardless of their political, social
and economic configuration.“
Hobsbaum, 2002
What is Welfare State?
 A Welfare State is a concept of government where
the state plays a key role in the protection and
promotion of the economic and social well-being of
its citizens. It is based on the principles of equality
of opportunity, equitable distribution of wealth, and
public responsibility for those unable to avail
themselves of the minimal provisions for a good life.
http://www.britannica.com
Two types of Welfare State

In the first model state is primarily concerned with directing the
resources to “the people most in need”. This requires a tight
bureaucratic control over the people concerned, with a maximum
of interference in their lives to establish who are "in need“. The
unintended result is that there is a sharp divide between the
receivers and the producers of social welfare.This model is
dominant in the US.
 In the second model the state distributes welfare with as little
bureaucratic interference as possible, to all people who fulfill
easily established criteria (e.g. having children, receiving medical
treatment, etc). This requires high taxing of which almost
everything is channeled back to the taxpayers with minimum
expenses for bureaucratic personnel. The intended – and also
largely achieved – result is that there will be a broad support for
the system since most people will receive at least something. It is
dominant in Scandinavia.
Welfare State
 Crisis of Welfare State itself
(For vs. Against Welfare State)
 “…historic co-evolution between elements of
economy, politics and socio-cultural relations”
(Jessop,2000)
World’s Social Expenditure
http://www.oecd.org
% of social expenditure
over GDP in OECD states, 2001
Welfare expenditure
(% of GDP)omitting
education
Welfare expenditure
(% of GDP)including
education
GDP per capita (PPP US $)
Denmark
29.2
37.9
$29,000
Sweden
28.9
38.2
$24,180
France
28.5
34.9
$23,990
Germany
27.4
33.2
$25,350
Belgium
27.2
32.7
$25,520
Switzerland
26.4
31.6
$28,100
Austria
26.0
32.4
$26,730
Finland
24.8
32.3
$24,430
Netherlands
24.3
27.3
$27,190
Nation
http://www.oecd.org
% of social expenditure
over GDP in OECD states, 2001
Italy
24.4
28.6
$24,670
Greece
24.3
28.4
$17,440
Norway
23.9
33.2
$29,620
United Kingdom
21.8
25.9
$24,160
Portugal
21.1
25.5
$18,150
Luxembourg
20.08
N/A
$53,780
Czech Republic
20.1
N/A
$14,720
Spain
19.6
25.3
$20,150
Hungary
20.1
N/A
$12,340
Iceland
19.8
23.2
$29,990
http://www.oecd.org
Swedish Welfare System
 Swedish flourishing history and economy
 “ Peoples Home” offers universal minima to its
citizens (Manza & Brooks, 2007).
 Political stability – Social Democrats’ Party
 Highest quality of benefits/ Highest taxes
Spain Welfare State
 Franco’s regime
- patriarchal family
- awards for marriage, birth and housewives (Serasa,
Almeda & Obiols, 1996)
 Socialist Party (PSOE) early 80’s reforms
- health care
- housing
- elderly people
Crisis Management
 In Nordic countries in the time of crisis Welfare
System serves as a kind of insurance policy for the
broad economy.
 Swedish biggest asset is priceless, Swedes trust
their governments
 Crisis is set to blow over faster than in other
countries
Crisis Management
 Spain has had one of the fastest growing economies
the last few years, which have made the signs of the
impact of the economic crisis significant
 2010 budget should aim to rise taxes by 1.5% GDP
 Unemployment of 20%
Instead of Conclusion
“ To say that other countries should emulate the
Swedish social model is about as helpful as telling
an average-looking person to look like a Swedish
supermodel. There are special circumstances and a
certain background that limit the ability to imitate.
In the case of the supermodel, it is about genetics.
In the context of Welfare System, it is about the
historical, economical and cultural background.”
Johan Norberg
Thank you
[email protected]