Key Challenges

With successes, new policy goals must be defined
Sweden’s long-term strategic ambitions are global competitiveness, a lean but effective and productive public sector, and carefully managed international influence. Many indicators suggest that Sweden is well on its way to achieving these goals. The key sustainability challenges facing the government relate to aiding economic and social losers. Sweden’s government now faces the challenge of clearly defining its social agenda. Choosing the specific strategy is however not feasible until the government delineates its policy objectives.
Some reforms to be reversed - but which?
With the Social Democrats’ return to political power, a key issue is determining which of the previous center-right government’s reforms of the welfare state, education system and labor market should be continued and which should be reversed. Reversing numerous reforms could introduce a stop-and-go pattern of policymaking that would be detrimental to institutional capacity, stability and predictability – which are important for economic development. Conversely, continuing an inherently center-right policy agenda would be difficult to sustain electorally.
Unemployment an issue even with growth
Four related challenges face the current government: immigration and accommodating asylum-seekers, unemployment, integration, and equality. Over the past several years, Sweden has enjoyed strong economic development, with the exception of the odd year in the midst of the global financial crisis. Even during high-growth periods, however, the government has recorded relatively high levels of unemployment. Unemployment in general and youth unemployment in particular remains a problem. Nonetheless, the share of young Swedes (15-24 years old) neither employed nor in education is comparatively low. The center-right governments (2006 – 2014) put their trust overwhelmingly in the market and in incentives; the red-green government (2014 – 2018) appeared to be more “dirigiste” in its approach.
Gridlock peaks
following election
However, the red-green minority government could not implement far-reaching reforms, because it had to compromise with the bourgeois parties in order to isolate the Sweden Democrats. In this review period, we witnessed parliamentary gridlock that came to a head after the 2018 election.
Integration insufficient despite funding
In terms of integration, visible and invisible obstacles prevent immigrants from finding meaningful jobs and societal acceptance in Sweden. A comparison with other countries is insufficient. Unlike other countries, Sweden has devoted great financial resources to solving the problem. Yet its formula has not worked, likely because the government has been unable to overcome societal obstacles. The government has taken the first step by strengthening the internal strategic capacity of the state, but now, in a second step, it needs to address the issue of making societal governance more integrative and effective.
Core values being
tested by refugee crisis
Core values of Swedish governance, such as equality and equal treatment, are being tested by the acute crisis in accommodating asylum-seekers and refugees from Syria and other war-torn countries. In the past, equality was one of the major features of the Swedish model. However, inequality has increased in Sweden because of wage bargaining deregulation, the decline in collective wage determination and increasing income from capital for high-income earners. Tax reforms under the previous government (2006 – 2014) further accelerated the rise in inequality. This trend could not be halted nor reversed by the red-green government (2014 – 2018). From a comparative point of view, Sweden remains a very egalitarian society. From a historical point of view, however, the rise in inequality has been strikingly fast and threatens to further undermine societal trust and integration. Addressing rising inequality will therefore remain a political challenge for the new red-green government.
Choice between collective goals or partisanship
Regardless of its composition, the new government has the rare opportunity to capitalize on high institutional trust, a strong economy, a vibrant civil society and a competent professional staff at all levels of government. The key political decision it must make is whether to employ these resources to pursue collective goals or to promote partisan initiatives. It appears unlikely that Sweden’s strong growth can be sustained with a “race to the bottom” strategy that undermines integration, equality and trust. Economic prosperity is more likely the outcome of concerted action between an effective public sector and a globally competitive business ecosystem.
Integration is biggest
long-term challenge
Sweden’s major challenge, however, will be integration. The extraordinarily high number of immigrants represent, in the short term, a significant challenge in terms of accommodation and welfare provision; a challenge that will impact local governments into 2019. In the longer term, achieving real integration will be essential to the future wealth and stability of the country.
Lindvall, Johannes et al. (2017), Samverkan och strid i den parlamentariska demokratin, SNS Demokratirapport 2017 (Stockholm: SNS).

Pierre, J. (ed) (2015), The Oxford Handbook of Swedish Politics (Oxford: Oxford University Press).

Party Polarization

Left-right cooperation
Swedish politics have long been polarized. With few exceptions, cooperation across the left-right divide has been rare and short-lived. More recently, the so-called GAL-TAN dimension (GAL: Green, Alternative, Libertarian and TAN: Traditional, Authoritarian, Nationalist) has be recognized as a new feature of the party system. Parties that are located far from each other along the left-right spectrum may adopt similar positions on the GAL-TAN dimension. Thus, on issues such as migration, the Social Democrats and Conservatives share similar policy views while the left, Green, and center parties tend to converge on another viewpoint.
Polarization becoming more complex
Thus, the party system remains polarized, both along the traditional left-right continuum and the emergent GAL-TAN dimension. Herein lies a major part of the explanation of the challenges in forming a government after the 2018 elections. (Score: 6)
Lindvall, Johannes et al. (2017), Samverkan och strid i den parlamentariska demokratin, SNS Demokratirapport 2017 (Stockholm: SNS).

Pierre, J. (ed) (2015), The Oxford Handbook of Swedish Politics (Oxford: Oxford University Press).
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