Estonia and the 'Nordic Model'

[Harold Schiffman]

The nordic model

Estonians are frequently asked by their nordic compatriots something
along the lines of, "Why didn't your country adopt the Nordic model
when it was reconstituting the state in 1991-1992?" The line of
questioning today also leads us to, "Will Estonia adopt the Nordic
model in the future?" President Ilves was recently asked this in an
interview with the City Paper, the question and reply:
Estonia, it is commonly claimed, wants to be regarded a Nordic
country. Still there are obvious and profound differences between
Estonian and e.g. Norwegian welfare policies. To what extent does the
President consider the Scandinavian/Nordic welfare state a good model
for Estonia?

I am sorry to see that such outdated clichés are still spreading. I
recommend a little homework in the future, or an examination of what
is happening in Estonia – Estonian and Nordic welfare policies are not
so different, actually they are increasingly similar. The primary
question is money. Money, yes, but also history and, very importantly,
contemporary history. You get the sense reading nordic impressions of
Estonia that they a) do not know Estonia, and b) do not know
themselves.

Estonia in the past has been criticized as being sort of an imaginary
West. Anatol Lieven warns us in the updated version of The Baltic
Revolution to not be fooled by the Scandinavian-looking airports. You
may feel that you are in the West, but you are not really in the West.
It's the "imitation" West, fake like those "Scandinavian sweaters" old
Russophone ladies sell in Tallinn's Old Town. It may look and feel
like a real Scandinavian sweater, but since it was knitted by Eva
Ivanova and not Bo Svensson, it's not the real thing, even if Bo
Svensson pays the Chinese to make them while he tans himself aboard
his yacht in the Adriatic.

I would argue that if Estonia had copied the "Nordic model" in the
1990s it would have arrived at even more of a precarious position as a
"fake West." The first reality is that the modern Nordic welfare state
was formed by primarily social democratic parties over the past
century. The model was designed by consensus over time. It was not
something that could be translated into Estonian by talented
researchers at the Ministry of Social Affairs and then force-fed to
the Riigikogu.Estonia organically chose other models. It chose a flat
tax, partially because it was easy to implement and partially to
attract investment in what was then a very poor country. Estonia since
has chosen policies though that do copy the Nordic model.

A classic example is the Mother's Salary, implemented in 2004, that
provides state financial assistance to mothers of newborns so that
they can support their growing families -- and the fattening of the
citizenship rolls -- while retaining their jobs. That's a policy that
all the flat tax advocates in the world should ignore when they talk
of the "Estonian model". President Bush admires Estonian taxation
policy. I have a feeling he wouldn't admire the mother's salary.

So, organically, Estonia is embracing policies that mirror its
neighbors. Partially because Finland and Sweden have positive birth
rates, and Estonia has a negative one, some geniuses came to the
conclusion that this kind of social support policy might help to raise
the birth rate in Estonia. and, wouldn't you know, the birth rate has
risen in Estonia since that policy was introduced. So, organically,
Estonia came to adopt part of the Nordic Model, not because it was
told to, but because it found out the hard way that it works.

This is what the other Nordic countries do not understand about
Estonia. Estonia is still a country in transition. It is likely that
in the future, as Estonia accrues more wealth, it may adopt more of
these classic Nordic welfare policies, not because they want to buy
the whole model, but because the policies are shown to work in
countries similar to Estonia. So the idea that Estonia would copy the
"Nordic Model" because it likes the way "Nordic" sounds is silly.
Estonia will arrive at those policies organically if they are indeed
as good as the Norwegians make them out to be.

But, amidst this backdrop, we have to admit that the era of the Nordic
Passport Union is behind us. The social democratic parties that built
social democracy in the nordic countries in the 1950s and 1960s have
given way to the government of Fredrik Reinfeldt in Sweden, who
supported Bush in both the 2000 and 2004 elections; the government of
Anders Fogh Rasmussen in Denmark, who advocates limiting immigration
and lowering taxes; and even across the Gulf of Finland, it is the
National Coalition Party of Sauli Niinistö that has the popular
momentum.

Is this the 'Nordic Model' they were talking about? It is certainly
the "Nordic environment" that Estonia is surrounded by, an environment
of tax-freezing, immigration-limiting governments run by economists
and bankers, rather than career civil servants. In this way, Estonia
fits in quite nicely.

And what of Nordic cooperation with supranational organizations?
Denmark, Norway, and Iceland are in NATO, while Finland and Sweden are
not. Finland, Sweden, and Denmark are in the European Union, while
Norway and Iceland are not. Finland has adopted the euro as a
currency, while Sweden and Denmark remain skeptical of the European
Monetary Union. This diversity begs the question, is there a model
here to follow?

And, of course, linguistic policies. Estonia has been urged by some to
adopt the "Nordic Model" when it comes to languages, but proponents of
such are usually referring to the Finnish model. The model of Norway,
Sweden, and Denmark is actually to grant municipalities extensive
rights in determining their working languages. Hence, Danish is the
official language of Denmark, and is co-official in the Faroe Islands,
but Faroese is not an official language in Copenhagen. So again, which
model to follow?

My only prediction is that if there is a Nordic policy that works well
and makes sense for Estonia to adopt it, then it will be adopted. To
merely adopt a model at the bequest of a traveling bureaucrat would be
more in tune with the model of "imitation West" than the real thing.
Estonia, like the Nordic countries, will continue to develop and
create policies where it sees fit. It may also happen that the
traditional Nordic countries might borrow a policy from Estonia in the
future, if they find it to be in their best interests.

http://palun.blogspot.com/2008/02/nordic-model.html

-- 
**************************************
N.b.: Listing on the lgpolicy-list is merely intended as a service to
its members
and implies neither approval, confirmation nor agreement by the owner
or sponsor of
the list as to the veracity of a message's contents. Members who
disagree with a
message are encouraged to post a rebuttal. (H. Schiffman, Moderator)
*******************************************