omise on most important issues û from defense to social welfare to economic policy û has characterized much of SwedenÆs history in the 20th century (Stjernquist, 1966).
The Swedish model, according to Edebalk (2000), emerged because of the unique circumstances of the nation in the first decades of the 20th century. At that time, Sweden had the oldest population in the Western world and, as a result, the highest expenditures for poor relief. The reporting of personal or family income and the practice of taxation had just been introduced, thus making it possible to finance a universal pension system by means of compulsory contributions by the individual via a special earmarked tax.
In 1916, the establishment of the universal pension system in Sweden made possible a system of insurance for work-based injuries (Edebalk, 2000). This included the entire workforce and was then the most modern of its kind. The presence of a pension insurance system and insurance for work-related injuries pointed out the need for a general ôsicknessö insurance. Such a system was created to deal with simple cases of injury as well as more serious cases of injury that could lead to disability. A proposal describing this system was presented to Parliament in 1919, but a serious deflationary crisis after the First World War, coupled with high unemployment (and reductions in earmarked taxes for social welfare programming) made it impossible to introduce a sickness insurance system.
Vartiainen (1998), in commenting on the evolution of the state system, notes that trade and labor unions have been key actors in asserting the social welfare agenda. Popular social movements dating to the early and mid-19th century, coupled with a religio-cum-social striving for egalitarianism, also promoted the model. In a span of 45 years, from the 1950-s to the mid-1990s, the Gross Domestic Product (GDP) share of total public expenditure rose from about 25 percent to j...