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Foreign sector and welfare state in Sweden: From complementarity to tensions

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  • Buendía, Luis
  • Barredo, Juan
  • Balay, Juan

Abstract

In this article, we analyse the relationship between the foreign sector and the ‘Swedish model’ of welfare state since the 1960s. The initial hypothesis is that the old relationship between the foreign sector and the Swedish welfare state during the expansion phase of the latter was mainly complementary, almost symbiotic, thus adhering to the compensation thesis. We ascertain that the different reforming waves of the late twentieth century transformed this relationship into one where the foreign sector became a source of distress, creating certain incomplementarities in the model. After reviewing the historical links between both, we examine their evolution over recent decades, paying special attention to transformations prompted by the process of globalisation. We conclude that the efficiency thesis best explains the current links between the foreign sector and the welfare state in Sweden.

Suggested Citation

  • Buendía, Luis & Barredo, Juan & Balay, Juan, 2022. "Foreign sector and welfare state in Sweden: From complementarity to tensions," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 310-319.
    • Handle: RePEc:eee:streco:v:63:y:2022:i:c:p:310-319
    DOI: 10.1016/j.strueco.2022.10.005
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    More about this item

    Keywords

    Foreign sector; Welfare state; Compensation thesis; Efficiency thesis; Financialisation;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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