Scandinavian Working Papers in Economics

Arbetsrapport,
Institute for Futures Studies

No 2005:1: Social Democracy Lost - The Social Democratic Party in Sweden and the Politics of Pension Reform, 1978-1998

Urban Lundberg ()
Additional contact information
Urban Lundberg: Institute for Futures Studies, Postal: Institute for Futures Studies, Box 591, SE-101 31 Stockholm, Sweden

Abstract: In this paper, the latter-day Swedish pension reform of the 1990s is studied from a power-political perspective focusing on the involvement of the Social Democratic Party. Few episodes in the history of Swedish social democracy have been as widely celebrated as the struggles of the 1950s over the development of the pension system. The debates strengthened the collective affiliations of those involved and eased the task of explaining to voters how the political parties differed from one another at a time when social welfare was beginning to be viewed as political public property. In perspective, and as much research indicates, the institutional design of the Swedish pension system in terms of the so-called "income security principle" was to have far-reaching power-strategic consequences. By limiting the scope for insurance alternatives offered by the financial markets, and by guaranteeing the living standard of a broader stratum of wage earners, it contributed to the middle class's integration into the emerging welfare state. In addition, it strengthened the Social Democratic Party's standing with its electoral base, thereby helping to ensure the party's its long-term incumbency. Despite the heritage, a broad consensus of the social democrat submitted to the Swedish Parliament in 1994 guidelines for a pension system reformed in a different direction.

Keywords: pension reform; Social Democratic Party

JEL-codes: J26

44 pages, January 2005

Price: 25 SEK

Note: ISSN 1652-120X ISBN 91-89655-59-1

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