The two most important dimensions of the Swedish social insurance system, which serves as the basis of the StateÆs welfare system, are those of universality (i.e., it encompasses the entire population) and of compensation for loss of income (Edebalk, 2000). The decisions that are basic to the Swedish social insurance system, and thus to the Swedish Welfare State, were made during the 1910s, with a universal pension system adopted in 1913, creating the worldÆs first universal public insurance system. This brief report will trace the evolution of the Swedish Welfare State model, commenting upon its current state and its future prospects. That model is seen as increasingly vulnerable as a consequence of changing economic conditions, structural rigidities, and a huge government deficit (13 percent of Gross Domestic Product [GDP]} (Olsen, 1994).
Nils Stjernquist (1966) pointed out that the Swedish Constitution, dating from 1809, provides for a distribution of power between king and Parliament (the Riksdag), with the king holding executive power and Parliament having powers of taxation and budget-making. A bicameral system, shared legislative authority between king and Parliament, universal suffrage, and a multiparty system in which the Socialists have tended historically to predominate are characteristics of the system of governance.
Stjernquist (1966) states that for the most part, the myriad political parties (including Farmers, Socialists, the Central Party, and Swedish Social Democrats) have tended to cooperate on issues of social welfare. As of 1932, the Socialists took over government and began to focus on expansion of the social welfare system, gaining support from minority parties in the process. Social welfare programs were seen as a means of leveling incomes; influenced by the economic theories of John Maynard Keynes, the Socialists then wanted a higher level of state activity and an economy planned by the state. Compr...