Chapter 9. Developed Countries and the Good Society
Chapter Overview
This chapter examines three types of political models in developed countries and a country that
typifies each. A political model is a national pattern of institutions, politics, and policies that fit
together in predictable ways that reinforce and complement each other. The three political
models discussed in this chapter are social democracy, extreme market democracy, and Christian
democracy. Sweden typifies social democracy, the United States extreme market democracy, and
Germany Christian democracy.
The social democratic political model is found primarily in the Scandinavian countries of
Denmark, Norway, and Sweden. Welfare state benefits are universally available to all citizens, as
well as being comprehensive and generous. The model’s reputation for big government is well
deserved, but its reputation for weakening economic competitiveness is not. The Scandinavian
countries where the model prevails are among the most globally competitive countries in the
world.
Sweden is the prototypical social democracy. Its state is a consensual parliamentary democracy
that relies on inclusiveness, bargaining, and compromise. The Swedish Social Democratic Party
(SAP) provided the main link between state and society for much of the twentieth century. It
built an enduring coalition of middle- and working-class citizens who had a stake in defending
its service-oriented welfare state. The SAP’s dominance was reinforced by a political culture that
believed individualism, democracy, and freedom could be realized only through the state, rather
than against it, and a political economy that combined capitalism with a generous, universal
welfare state. The social democratic model has been tested by economic difficulties and
immigration. Right-wing political parties have become stronger.
Extreme market democracy is the second political model examined in the chapter. It is found in
the United Kingdom, as well as the former British colonies of Canada, Ireland, and the United
States. These countries are more likely to leave the production and allocation of goods to the
market than either the social democratic or Christian democratic models. Left-wing political
parties are nonexistent or marginalized in this model. Without left-wing parties to bring members
of the working class together for collective action, business is dominant. The welfare state in
extreme market democracies targets the poor, and benefits are small. Extreme market states differ
in their political institutions; however, they all have pluralist interest group systems.
The United Kingdom embodies the extreme market democracy model. It is a constitutional
monarchy in which its legislature, Parliament reigns supreme. The legislative agenda is
controlled by the executive; that is, prime ministers and their cabinets. Prime ministers are
elected to the House of Commons and run their party within it. They oversee policy in a
democracy, meanwhile, that once ruled the largest empire in history, but is now a nation and
society in flux. For most of the 20th Century, the Conservative and Labor parties dominated
British politics. Both supported an expanded welfare state after World War II. A succession of
governments of both parties failed to adapt to change and keep up with European growth over
time, however. Since the Conservative government of Prime Minister Margaret Thatcher, the UK
has move in a more market-driven direction, with a smaller welfare state. It now finds itself
challenged by deficits brought about by the recession of 2007, along with calls for regional
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autonomy, and life as a mid-level power on the global stage, even as the nation grows more
tolerant and accustomed to being a multi-ethnic, multi-racial society.
Christian democracy is the third model of politics in the chapter. It is found primarily in Austria,
Belgium, the Netherlands, and Germany. Politically, these states have parliamentary
democracies, proportional representation, and corporatist interest group systems. The welfare
state in Christian democratic states is large, but not as large as in social democratic nations.
Instead of providing services to its citizens, the states give generous cash benefits or transfer
payments. There are two goals of the welfare state in Christian democratic regimes. The first is
to reinforce traditional family values by providing enough income security for a family so that
women can stay home and maintain their traditional roles. Second, they want to alleviate the
effects of inequality.
Germany represents the Christian democratic model. Germany’s “semisovereign” state was
created after the defeat of the Nazis in World War II with national-level power shared with
lander (states) and constrained by judicial review. In the first decades after the war, political
cleavages were focused on class and religion, and the Christian Democratic Party (CDU) was
more successful than the Social Democratic Party (SPD) in winning voter support and forming
stable governments in the German parliament. Political stability was reinforced by changes in
German political culture with greater respect for democracy but is now being tested by an influx
of immigrants with different values, religions, and cultural practices. A social market political
economy made fast economic growth, high wages, low inflation, and a generous welfare state
possible, but it ran into economic difficulties in the 1980s and 1990s.
The chapter concludes with a comparison of capabilities among Sweden representing social
democracy, Germany representing Christian democracy, and the Unites States representing
extreme market democracy. The comparison finds Sweden first, Germany second, and the United
States third on physical well-being, informed decision-making, safety, and democracy.
Learning Objectives
Upon completion of this chapter students will be able to do the following:
9.1 Describe what affluent democracies have in common and introduce the three models found
among them.
9.2 Summarize the main features of the social democratic model.
9.3 Describe the history, political culture, political economy, political institutions, and party
system within Sweden.
9.4 Summarize the main features of the extreme market model.
9.5 Describe the history, political culture, political economy, political institutions, and party
system within the United Kingdom.
9.6 Summarize the main features of the Christian democratic model.
9.7 Describe the history, political culture, political economy, political institutions, and party
system within Germany.
9.8 Compare capabilities in Sweden, the United Kingdom, and Germany.
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219
Chapter Outline
I. INTRODUCTION
A. Nations, including affluent, neighboring ones in Western Europe, differ in regard
to their politics and political cultures, something that makes a difference in their
level of spending and taxation.
B. Political models. Sweden, Germany, and the United Kingdom represent different
types of these groups, what you might call families of nations.
1. The term political model means countries that share similar institutions,
politics, and policies.
2. Certain institutions, politics, and policies fit together in predictable ways that
reinforce and complement each other.
1. Politically, all are democracies.
2. Economically, they are all fairly wealthy with high GDP per capita.
3. Sociologically, they have a postindustrial occupation structure.
3. Christian democracy—Germany
E. The chapter concludes by comparing which of the countries performs best in
meeting the criteria of the good society.
II. SOCIAL DEMOCRACY
A. Marked by move from radical Marxism to electoral socialism
1. Its radical Marxist origins dropped in favor of electoral road to socialism
2. Chose to build socialism gradually by winning votes
3. Once in office, could make incremental reforms to help workers
B. Especially strong in Scandinavian countries
1. Dominant social democratic parties in Denmark, Norway, and Sweden
2. Reasons for success in these countries
a. Opponents on right divided.
b. Workers share common ethnic and religious roots and are united.
c. Policies of social democratic parties have attracted middle-class voters.
C. Scandinavian countries are thoroughly capitalist, not socialist.
1. Private ownership of production prevails.
2. State does not set prices or production levels.
3. State does not own and control many firms.
D. Scandinavian countries’ reputation for big government deserved
1. Taxes and state spending each account for about 50 percent of GDP—highest
percentage among affluent democracies.
2. Over 20 percent of the workforce is employed by the state.
4. Extensive array of services
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5. Redistributive, reducing inequality between rich and poor
F. Critics say social democracy needs to be rethought
1. Argue that high taxes punish entrepreneurial risk taking
2. Generous welfare state undermines work ethic
G. Social democracy remains resilient
1. No evidence that high taxation is causing capital and skilled people to leave
2. Have high workforce participation rates and a high percentage of women
workers
3. Workers less resistant to technological change since society socializes costs
4. Welfare state moderates wage increases that might hurt competitiveness
5. Active labor market policies, job retraining and relocation for workers—offers
6. Results
a. Social democratic countries rank among the top countries in the world in
global economic competitiveness.
7. Emerging problems for social democracies
a. Decline of industry and unions have weakened working class base
b. New issues such as immigration and environmentalism threaten to weaken
class identification
III. SWEDEN
A. Historical background
1. Sweden has a small population of 9 million and is about the size of California.
2. It has received disproportionate attention in comparative politics because of
the political strength of its working class.
3. Highest proportion of workers that belong to unions in any affluent
democracy.
4. Late start to working-class power in 1880s.
5. Democracy also developed late—universal suffrage granted after World War I.
B. The state
1. An example of “consensual democracy” whose institutions promote
“inclusiveness, bargaining, and compromise.”
2. Evidence of inclusiveness
a. Coalition governments are the norm.
b. Interest groups are routinely invited to comment on bills under
consideration and suggest amendments to them.
c. Views of parties not part of the coalition government are often taken into
account in parliamentary committees.
d. Proportional representation rules ensure that parties with only modest
support win seats in parliament.
3. Sweden is a parliamentary democracy.
a. Unicameral parliament is named the Riksdag.
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i. Elections every four years using proportional representation in
multimember election districts
ii. Strong committee system
iii. Committees review and amend bills, and amendments often accepted
iv. Also performs oversight of the government
v. Parliamentary ombudsman provides further oversight, investigating
state agencies for malfeasance
4. The executive branch separated between the head of state and the head of
government
a. The king is the head of state who performs ceremonial duties.
b. Real power belongs with prime ministers, the head of government.
c. Prime ministers and cabinets direct executive agencies and set the agenda
of government.
d. Develop and submit bills to the Riksdag, which almost always become law
because of the way governments develop consensus for bills
i. Before proposing a bill, seek advice from Commissions of Inquiry
ii. When bill is prepared, interest groups are invited to comment on it
e. Executive branch dominates policy making but is tempered in two ways.
iv. New political issues, including environmentalism, immigration,
relations with European Union, and family values complicated old
class-based cleavages.
3. A possible decisive break from past in 2010
a. In 2010, a right-wing party finished a full term in office and won
reelection for first time in nearly a century.
b. Sweden’s proportional representation election rules allowed an anti-
immigrant party with 5.7 percent of vote to enter parliament in 2010.
c. In 2014 elections more than doubled that total to become the third largest
party, with 49 seats in the legislature.
D. Political culture
1. Individualism and statism both respected and seen as augmenting each other.
2. Believe individualism, democracy, and freedom can only be realized through
the state rather than against it.
3. Swedes also egalitarian
a. Less tolerant of income differences that citizens in other countries find
morally acceptable.
b. More supportive of government policies that redistribute income than
other democracies.
4. Value consensus and pragmatism.
5. A high-trust society with a vibrant associational life.
6. Social trust being challenged by arrival of immigrants who have made
Sweden one of the most diverse countries in Europe.
E. Political economy
1. SAP policies enabled it to govern from 1945 until 2006.
2. Success built on generous, universal welfare state that both working- and
middle-classes supported
3. Good policy was good politics—about 50 percent of citizens’ derived income
from state as clients or state employees.
4. Required full employment and steady economic growth to maintain
5. Growth faltered in early 1990s—responses to tighten social benefits, allow
citizens to invest some of pension contributions into individual accounts, and
choose state of independent schools for their children.
6. Economy mistakenly described as socialist—it is not
a. Means of production are privately owned
b. Market rules in setting prices
7. Developed a very successful model of capitalism based on three precepts
a. Full employment
b. Centralized wage bargaining
8. Model fell on hard times in 1980s
a. Full employment collapsed
b. Centralized bargaining eroded
c. Wage solidarity weakened
9. Despite weakening of the Swedish Model, the political economy achieves
similar results
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a. Unemployment rates among lowest in Europe
b. Sector-level wage bargaining prevails.
c. Pay differences between highest and lowest wages smallest in Europe
10. Model has had to adapt to address new challenges
a. The resiliency of the Swedish model was particularly evident in its ability
to weather the recent recession.
b. The Swedish government responded with a very aggressive combination
of lower taxes and higher spending to stimulate the economy.
c. The increase in unemployment was lower in Sweden than in the Eurozone,
the increase in public debt was milder, and balance of payments accounts
were more favorable.
11. In foreign policy, Sweden has continued to follow a policy of neutrality and
internationalism.
a. Sweden never joined the North Atlantic Treaty Organization (NATO), the
military alliance created in response to the Soviet Union.
b. It moved hesitantly in the direction of European integration, joining the
European Union in 1995. But Sweden voted by referendum in 2003 to
reject adopting the euro, the European currency.
c. It is an avid supporter of stronger international organizations, such as the
United Nations (U.N.), the World Trade Organization (W.T.O.), and the
International Monetary Fund (I.M.F.).
IV. EXTREME MARKET DEMOCRACY
A. Similar politics, institutions, and policies
1. Left-wing parties either completely absent as in the United States or outsiders
as in Canada and Ireland, or are not the natural party of government, as is true
of the Labor parties in Australia and Britain.
2. Left-wing parties weak for two reasons
a. Weak class identification
b. Other cleavages cross-cut class identity and weaken it.
3. In absence of strong left-wing parties to articulate working-class demands,
business is politically dominant.
4. In elections, politicians appeal to wealthier voters who are likely to vote and
pay less attention to the demands of peripheral working-class voters who are
less likely to do so.
B. Distinguishing characteristics.
1. Public sector is smaller percentage of GDP
1. Proportion of spending devoted to welfare is smaller
2. Characteristics of welfare state in extreme market democracies
a. Not universal but targeted toward poor
b. Benefit levels stingy
c. People’s life chances depend on their performance in the market
C. A diversity of state institutions
1. United States is presidential, while Australia and Britain are parliamentary.
2. Canada and United States are federal, while Ireland is unitary.
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3. Ireland has proportional representation election rules, while others use
plurality vote.
2. Britain now more multiracial, multiethnic, and multinational.
3. Welsh and Scottish demands for autonomy led Parliament to devolve
authority to regional governments.
4. In 2014 Scotland held independence referendum, with a majority voting to
retain their three-century-old union.
5. UK is now a mid-level power, must work through other nations and
organizations to have global influence.
G. The State
1. British Constitution
a. Not written, but composed of parliamentary laws, judicial precedents, and
accepted conventions.
b. Lack of a codified document gives the constitution political flexibility.
c. Presumes good faith of political actors.
2. Westminster Model
a. In the British system, Parliament is supreme.
b. Legislature can make and unmake any laws, and decisions cannot be set
aside or overridden.
c. No checks and balances.
d. Some criticize it as an elected dictatorship.
3. Structure of Parliament
a. UK has plurality winners, giving it a bias toward a two-party system.
b. Contains two chambers: The House of Lords comprises the upper house,
the House of Commons is the lower house.
c. Prime ministers and their Cabinets determine the legislative agenda.
d. Elected body is the House of Commons, which in 2010 had 650 members.
i. Terms are set at a maximum of five years, at which point the
government must call for new elections if it has not done so
already.
ii. Although MPs ostensibly represent the district that elected them,
they really represent parties.
e. Unelected House of Lords is the weaker of the two chambers.
f. British monarchy plays a neutral and neutered role in politics.
4. The Executive
a. The executive—specifically prime ministers and their Cabinets—dominate
policy making.
b. Prime ministers are elected toe House of Commons and are leaders of their
party within it.
c. They are first among equals in their Cabinet, which is composed of about
20 to 25 ministers who run executive ministries.
i. Members of the British Cabinet serve as members of Parliament
Cabinet members serve at the pleasure of prime ministers
ii. They have been eclipsed in recent times by the prime minister’s
network of personal advisors.
iii. Critics see creeping “presidentialization.”
5. Unitary state and devolution
a. Authority concentrated at the national level.
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b. Subnational governments may wield powers granted by Parliament.
c. In 1997, Parliament permitted voters in Scotland and Wales to vote on
creation of their own governments. Voters said yes.
d. New governments were given authority over domestic issues.
e. In the 2014 campaign against Scottish independence, British party leaders
promised to devolve even more authority to Scotland.
f. People in Scotland and Wales can vote on matters that affect England, but
citizens in England cannot vote on matters affecting Scotland and Wales.
H. State and Society
1. Post-World War II Years.
a. Labor Party won the 1945 elections in a landslide
b. Proceeded to expand welfare state to reward citizens for sacrifices
c. Built National Health Service, public housing
d. Conservative Party wins three elections in a row in the 1950s
e. Keeps Labor welfare state and nationalized industries in place
2. British economic decline
a. Decline began under Conservative governments in 1950s and 1960s
b. Voters turned to Labor in 1970s
c. Labor pledged to redistribute income and expand welfare state
d. In exchange, it sought wage restraint from unions
e. Public strikes immobilized London, however, in 1979
3. Margaret Thatcher
a. Tories, led by Thatcher, won a Parliamentary majority in 1979
b. Thatcher cut back welfare state, sold off nationalize industries
c. Polarizing, even within her own party
d. Only ousted in 1990, by other Conservatives, replaced by John Major
4. Two-party system decline
a. In 1950s and 1960s, Tories and Labor captured about 90 percent of votes
b. Policy failures led voters in following decades led to seeking of
alternatives
c. Conservatives never received a majority of a national vote from 1979 to
1987; in 2010, Labor and the Conservatives combined won less than two-
thirds of the vote.
d. Third parties increased vote percentage, but did not translate popularity
into more seats.
I. Political Culture
1. Culture of deference
a. Gabriel Almond and Sidney Verba called British political culture
“deferential.”
b. British had confidence and faith in government, assumed leaders would
not abuse authority.
c. Confidence has since declined, but British still record higher levels of trust
in government than citizens in many advanced democracies.
2. Trust and tolerance
a. Trust in fellow citizens also comparatively high
b. British also more tolerant of different races, ethnicities and lifestyles
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