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This note describes how research on the link between economic openness and government size has changed over time. Early interpretations suggested that countries develop welfare states to compensate for volatility caused by economic openness (the compensation hypothesis). Recent findings have cast doubts on this interpretation. For example, more open economies are on average not more volatile, and economic openness does not unambiguously increase the social security demands from voters. Some recent studies suggest that economic openness is particularly beneficial for countries with high taxes and high‐income equality. A re‐interpretation of the compensation hypothesis is thus possible: Through trade, the citizens in large welfare states enjoy some of the benefits associated with cheap labour and high wage dispersion despite their domestic economy being characterized by high real wages, high taxes and a compressed wage distribution.

AbstractTo explain the coexistence of economic freedom and big government, this paper distinguishes between big government in the fiscal sense of requiring high taxes, and big government in the Hayekian sense of requiring knowledge that is difficult to acquire from a central authority. The indicators of government size in measures of economic freedom capture the fiscal size but ignore the Hayekian knowledge problem. Thinking about government size in both the fiscal and Hayekian dimensions suggests the possibility of Hayekian welfare states where trust and state capacity facilitate experimentation and learning, resulting in a public sector that is big in a fiscal sense but not necessarily more vulnerable to the Hayekian knowledge problem. Pensions in Sweden are used as a case to illustrate the empirical relevance of the argument. The new pension system represents big government in a fiscal sense, but by relying on decentralized choice it requires relatively little central knowledge.

The idea that all types of economic freedom - including limited government - promote prosperity is challenged by the fact that some countries successfully combine a large public sector with high taxes and otherwise high levels of economic freedom. To explain the co-existence of economic freedom and big government, this paper distinguishes between big government in the fiscal sense of requiring high taxes, and in the Hayekian sense of requiring knowledge that is difficult to acquire by a central authority. The indicators of government size included in measures of economic freedom capture the fiscal size but ignore the Hayekian knowledge problem. Thinking about government size in both the fiscal and Hayekian dimensions suggests the possibility of Hayekian welfare states, where trust and state capacity facilitate experimentation and learning, resulting in a public sector that is big in a fiscal sense but not necessarily more vulnerable to the Hayekian knowledge problem. Pensions in Sweden are used as a case to illustrate the empirical relevance of the argument. The new pension system represents big government in a fiscal sense, but by relying on decentralized choice it requires relatively little central knowledge.

Welfare services are an important part of the Nordic welfare states both financially and for welfare state redistribution. Baumol's cost disease, Wagner's law, and population ageing are often said to bring challenges for the future provision of welfare services. While none of the three poses an immediate threat against the financial sustainability of the welfare state, they have important implications for distribution and for the political support for the welfare state. The combination demographic change, a higher relative price of welfare services and increasing demand for welfare services may force politicians to make a difficult choice between increasing taxes, allowing people to top up publicly financed services with additional private financing, or risk eroding support for the welfare state.

This article studies how local autonomy meets international and national quality policy rhetoric. The research question asked is: How can the local doing of education be understood in relation to international and national quality policy rhetoric, and how does this affect teachers' autonomy to realise nationally formulated goals? To answer this, two sets of theoretical concepts are combined: horizon of expectation and space of experience (Koselleck, 2002) and autonomy and control (Cribb & Gewirtz, 2007). An earlier study (Bergh, 2010) of how the use of the quality concept has successively changed in Swedish authoritative educational texts from the 1990s and onwards provides a broader context for the local study, which empirically builds on interviews with local politicians, civil servants, school leaders and teachers. The results show that the national policy rhetoric has a strong impact on local practice, but also that certain interpretations are taken further in the local context, such as an emphasis on market forces. Although possible conflicts in the national context are concealed by the use of positive concepts like quality, these conflicts eventually erupt in the local setting, often with far reaching consequences for its different actors and for the education in question.

This article analyses a specific part of the actions taken to improve the quality of Swedish education, namely the expectations formulated in national policy documents for the quality work that local authorities, schools and teachers are supposed to undertake. For the empirical analysis of how these expectations have changed over the last two decades, two sets of theoretical concepts have been combined: management of placement and management of expectation and autonomy and control. The specific research question is: How can local systematic quality work be understood in an age of accountability and what are the implications for teachers' practices? The results show that expectations for local quality work have changed radically during the studied period. There has been a significant change in the language used, the content of education has been recontextualised and there are obvious changes in the relation between local autonomy and national control. It is argued that these changes are a consequence of the changed design of the education system, rather than an answer to a content-related question of what is educationally desirable. As a consequence, paradoxical expectations land at the local level and have to be resolved by teachers. ; Funding Agencies: Faculty Board of Humanities and Social Sciences at Örebro University Faculty of Educational Sciences at Uppsala University Education and Democracy research group at Örebro University Studies in Educational Policy and Educational Philosophy (STEP) research group at Uppsala University

This article studies how local autonomy meets international and national quality policy rhetoric. The research question asked is: How can the local doing of education be understood in relation to international and national quality policy rhetoric, and how does this affect teachers' autonomy to realise nationally formulated goals? To answer this, two sets of theoretical concepts are combined: horizon of expectation and space of experience (Koselleck, 2002) and autonomy and control (Cribb & Gewirtz, 2007). An earlier study (Bergh, 2010) of how the use of the quality concept has successively changed in Swedish authoritative educational texts from the 1990s and onwards provides a broader context for the local study, which empirically builds on interviews with local politicians, civil servants, school leaders and teachers. The results show that the national policy rhetoric has a strong impact on local practice, but also that certain interpretations are taken further in the local context, such as an emphasis on market forces. Although possible conflicts in the national context are concealed by the use of positive concepts like quality, these conflicts eventually erupt in the local setting, often with far reaching consequences for its different actors and for the education in question.

This paper discusses a number of questions with regard to Sweden's economic and political development: . How did Sweden become rich? . What explains Sweden's high level of income equality? . What were the causes of Sweden's problems from 1970 to 1995? . How is it possible that Sweden, since the crisis of the early 1990s, is growing faster than most EU countries despite its high taxes and generous welfare state? These questions are analysed using recent insights from institutional economics, as well as studies of inequality and economic growth. The main conclusion is that there is little, if any, Swedish exceptionalism: Sweden became rich because of well-functioning capitalist institutions, and inequality was low before the expansion of the welfare state. The recent favourable growth record of Sweden, including the period of financial stress (2008-10), is a likely outcome of a number of far-reaching structural reforms implemented in the 1980s and 1990s. Adapted from the source document.

This paper analyzes how the possibility to complement social income insurance schemes with private insurance affects the political support for social insurance. It is shown that political support for social insurance is weakly decreasing in the replacement rate. Policy makers seeking to maintain support for social insurance schemes can do so by lowering the replacement rate and allowing topping up contracts. The strategy is likely to be a partial explanation for the continued political support for welfare states with universal social insurance schemes such as those in Scandinavia.