Inclusion of the European Nordic model in the debate concerning social protection reform: the long-term development of Nordic welfare systems (1890-2005) and their transferability to Latin America in the twenty-first century

Abstract What is the relevance of the Nordic model of social and labor market policy in Latin America today? This issue is explored by an examination of how the Nordic systems of social protection developed institutionally, and what role has been played by the labor market context. The report also discuss what best practices" of a "Nordic model" may be imported into a Latin American context. Further, how does globalization affect possibilities thereto? This report provides the following kinds of evidence on these questions. Firstly, the Nordic model has developed gradually, from mainly voluntarist origins, not least in sickness and unemployment insurance. The Nordic model has also generally been supported by its labor market context— universalism was enabled by full employment. Secondly, regarding policy transfer, differences between the Nordic countries and Latin America are major but not insurmountable—not least GDP/capita levels in Nordic countries were low when the universalism of Nordic model was established, and Latin American GDP/capita levels of today compare favorably to these initial levels. Finally, regarding globalization's role and "best practices", there is little indication that Nordic social policy programs would be predicated on lack of openness to the global economy. However, Latin American decision makers may need to critically re-evaluate emphases on occupationally segregated benefit administration and targeting in their own social security systems. Particularly regarding targeting, high implementation costs, uncoordinated gaps in coverage and take-up, as well as segregation of poor service and benefit recipients may be institutional features which inflate overall costs of targeting on the margins, and also hurt the poor."