THE ＧＬＯＢＡＬＩＺＡＴＩＯＮ ＆ ＧＯVＥＲＮＡＮＣＥ ＰＲＯＪＥCＴ， ＨＯＫＫＡＩＤＯ ＵＮＩＶＥＲＳＩＴＹＷＯＲＫＩＮＧ ＰＡＰＥＲ ＳＥＲＩＥＳSocial Democracy, the Labour Market
and the Third Sector: the Swedish Case
Ⅰ－２０
Ｙｏｈａｎａｎ Ｓｔｒｙｊａｎ, Södertörn University＊

Paper for the Symposium, East Asia-Europe-USA Progressive Scholars’ Forum2003 , 11-15 October, 2003.
＊

None of these papers should be cited without the author’s permission.

Sweden
1. Labour-market and employment: a brief overview1
Full employment and high labour market participation are two important elements of theuniversal and comprehensive Swedish welfare state (Stryjan, 1994). The right to employment isperceived as a general civic right2, and work integration has been a public responsibility since
the thirties. Full employment is stipulated as a central policy objective in The LabourMovement’s Post-War Program (Arbetarrörelsens efterkrigsprogram) of 1945, a pivotal position
that remaines virtually unchallenged until the present day.
‘The Swedish Model’ is a general, if somewhat loose label traditionally applied to Swedishsocial and economic policies in the post-war period. The model combined, in an interesting way,high social aspirations and an egalitarian approach, with a strong market-orientation3. The goalsof high labour market participation, high (virtually full) employment, high economic growth andlow inflation, considered contradictory by conventional wisdom, were ingenuously integrated in
the so-called Rehn-Meidner model, and pursued in tandem, and with a considerable degree ofsuccess from the 50s and onwards. Though some of the model’s basic tenets were graduallyeroded by economic development (see below, section 2), Swedish unemployment figures, judged
by European standards, remained comparatively low throughout the 80s. A crisis in the early 90s
caused a sharp drop in the number of gainfully employed, from roughly 4.5 million 1989 to 3.85
million in 1992 4 , and a corresponding sharp rise in unemployment. Unemployment figuresapproached ten percent for the first time in Sweden’s post-war history, and the goal of full
employment had to be abandoned for a brief period. A gradual return to the Swedish norm
followed, and unemployment receded steadily from the mid-nineties (with a brief reversal in1997) and stands, since 2001, at the four percent level5.
Labour market participation as percentage of the 16-64 age group declined in the early 90s, but ispresently back at 74 percent, and only 26 percent of those presently in work age are not in thelabour market. However, over one third (37.5%) of this rest-group is constituted by persons
classed as permanently unemployable (recipients of early pension or disability pension)6. As it
will be argued in section 2 that follows, these two figures- of high labour-market participation on
one hand, and of high labour market exclusion on the other, are closely interlinked. In a mannerof speaking, both represent central aspects of the Swedish Model. The Swedish government
currently set a target level of 80 percent labour-market participation. This target cannot be met
unless the nearly half a million strong group of permanently excluded. is addressed, which, inturn would presupposes a modification of the Swedish Model’s institutional make-up, and theshaping of new organizational forms and policy tools that could address- and reduce labour
market exclusion.
1

The figures in this review are based on the Labour Market survey of Swedish National Statistic Office (SCB).
Monthly time-series are available at www.scb.se/statistik
2
The proclamation on of government form (kungörelse 1974:52 Om beslutad ny regeringsform) specifies the rightto employment as one of the basic rights that are safeguarded by the public/the collective (Sw. allmänhet)
3
Typically, the labour ministry has traditionally been titled ‘the ministry for labour-market’.
4
Source: Central Statistical Bureau; http://www.scb.se/statistik/am0207/am0207dia2.asp . The Bureau’s later
figures of 3.75 million for the same year were computed in a different method and are not fully comparable
5
The population in the age-group 16-64 numbered 5,5 million in Nov 2002. 169,5 thousand people were registeredas unemployed. Further 39 thousand lack work, but are not eligible to register as unemployed.
6
1.297 million Swedes are classed in SCB’s statistics as ‘not in the labour force in Dec 2002; the number of
persons on early retirement that month was 488.500, according to press figures (Dagens Nyheter Dec 21st
2002).

2. The institutional context
The basic ingredients of the Swedish Model: universal welfare, industrial policy, solidarity andsocial cohesion are far from extraordinary in themselves. Yet, the model’s high level ofconsistence that links normative assumptions and institutional practices into an integrated whole,as well as the high aspiration level are probably unique internationally (Stryjan, 1994). The
distributive aspects of welfare (the model’s best known hallmark; see, e. g. Esping-Andersen andKorpi, 1987; Esping-Andersen, 1990) are firmly embedded in a broader economic perspective, inwhich production and distribution are carefully balanced, and delimited by a quasi-corporatist
division of tasks, within a market model. Inasmuch the model defines the starting points oftoday’s changes and still permeates much of the routines, mind-sets and administrative practices
in the sector, it is useful to open the discussion by a brief review of some of its normative
underpinnings (Stryjan, 1994; Stryjan and Wijkström, 1996).
Collectivism and individualism: society at large (rather than households) is considered as the
major producer of welfare. While corporate entrepreneurship is endorsed, individual
entrepreneurship was traditionally frowned upon. Somewhat at odds with its collectivist spirit,
the model also contains a fiercely individualistic slant. Thus, welfare entitlements are strictly
individual, and were often purposefully decoupled from any affiliation to any collective, group,
or even family; employment subsidies, where are strictly linked to individual wages, and not to
employers’ declared purposes The same logic applies to taxation: general tax-breaks forfulfilling a social purpose (such as employing marginalized groups) are shunned as a matter ofprinciple7. Income tax is decoupled from family status, while family benefits are decoupled fromincome, etc.
Welfare and employment: the right to employment was (and, in many ways, still is) part of thenormative core of the Swedish Model (Stryjan, 1994). Inasmuch welfare entitlements are largely
employment-related, truly general welfare is contingent on general (i.e. full-) employment,
which makes full employment into a prime boundary condition for the model’s coherent
operation. The high level of labour market participation (indirectly precipitated in the 60s8 by the
replacement of household taxation with a strongly progressive individual taxation that madesingle-income households and family proprietorships economically unfeasible) also worked tomake employment (rather than occupation) into a central defining element of identity.
This notwithstanding, the provision of employment was never considered as an element ofwelfare policy proper. While the welfare state was expected to deliver welfare, it was NOT
supposed to directly deliver employment nor to ‘create jobs’. These were to be created bybusiness and allocated through the workings of the labour market, that assumes the role of acentral mechanism of social integration, well subsumed by the Arbetslinjen concept9. The State’s
responsibility for employment policies was enacted on two levels: at the macro level, as
facilitator of a smoothly functioning labour market; at the micro level by assuming responsibility
for the social overhead costs that worker mobility entails (cf von Otter, 1978).
Equality and exclusion: ideally, the model could be perceived as a general insurance scheme(Hedborg and Meidner, 1984), safeguarding average welfare for the entire population, rather
than baseline welfare to targeted problem groups. Welfare services were gauged for the level of
expectation of the average citizen. The sections of the population that are addressed would
constitute the upmarket segment of welfare services in more conservative systems. Similarly,
employment policy strove to create and maintain a unified labour market, with nationwide
7

Some exception to this rule (in the case of VAT) exist; See Stryjan and Wijkström (1996)
This progressivity got considerably blunted, from the 80s and onwards as taxation increasingly shifted fromprogressive state taxation to strictly proportional payroll- and municipal taxes.
9
Literally ‘the work-line’ or the work-queue. For a discussion of the concept, see, e. g. Axelsson, 2002.
8

standard wage scales, and a high level of skills and mobility. Public funding was primarily
directed to programs that enhance individual employability as well as physical mobility on thisgeneral market. Public involvement in ”job saving” maintenance or creation of special marketsegments was considered counterproductive. As we shall see later, this policy-focus on the
average impaired capability to identify new and/or marginal problem groups.
The setting of full employment as a societal norm is a formulation subtly different from decrying
unemployment as a major societal problem. Full employment, as perceived in this mind-set wasconceptually joined to growth, optimal allocation of resources, and maximal utilization of human
productive resources, not to the conservation of jobs or branches. Traditionally, the Swedish
Labour Movement was strongly opposed to workfare or anything that may resemble charity.
Rather than to support ailing branches, the state’s task (and, oddly enough, the trade unions’ aswell) was to work to eliminate them in the fastest and least painful manner, and facilitate thetransfer of manpower and capital to more successful ones (Meidner, 1992).
The combination of high labour market participation with high labour mobility was seen as away to fuel economic growth and facilitate structural adjustments and high capacity utilization
while keeping inflationary pressures in check. In a system that postulates full employment as thenormal condition, unemployment is seen as a frictional phenomenon, not as a structural one(Meidner, ibid). Unemployment is to be considered as a temporary (rather than endemic) and an
individual (rather than systemic) affliction, to be remedied through active labour market policy
measures. The active labour market policy relied on strictly individual measures administered bylabour market authorities: retraining- and mobility grants for the ordinary unemployed, andplacement subsidies (and, where necessary, grants for the physical modification of a workstation) for the disabled. Ideally, every person losing his job should have his or her qualifications
upgraded to the level currently required by prospective employers, and whenever necessary, also
be physically moved to where the jobs are.
A basically corporatist division of tasks between organized societal sectors: state, business
community, and popular movements is assumed in this model (Laurelii and Stryjan, 2002;
Stryjan, 1994). In this world-view, the 'business community' (näringslivet), stands for
production, accumulation, and the creation of workplaces (cf Erixon, 1998); the Stateadministers (re)distribution and system maintenance (Abrahamsson and Broström, 1982; vonOtter, 1978)10- finally, Popular Movements are seen as an organized framework of civil society,that focuses on articulation of interests, and the shaping of the broad societal agenda. Of thesethree parts, only two were assigned a direct role in the field of employment: the state as a
facilitator of labour reallocation, and the "business community" (näringslivet), as an actual
creator of jobs (Stryjan and Wijkström 1998). The individuals’ role in this system is, primarily,‘to stand at the labour-market’s disposal’ (as formulated in the statutory requirements for
unemployment benefits and expressed by by the Arbetslinien concept); and let oneself be
allocated by the labour-market mechanisms; own initiative was to be expressed through politicalparticipation that is channelled by popular movements (trade unions and interest organizations of
the handicapped are the most relevant to our discussion); definitely not through entrepreneurial
creation of one’s own job.
2.1 Integration and exclusion

10

Following the German Social Democratic tradition, Swedish Social Democracy has historically striven for thecontrol of distribution only, while production was considered best left in the hands of the business community.
(Abrahamsson and Broström 1980). The distinction drawn between production and distribution bears the stamp of
the period, and verges on industrial physiocracy: only industrial production was considered ‘production proper’. The
productive aspect of services was not fully acknowledged.

The double-pronged drive to upgrade individuals to the (constantly rising) demands of the labour
market, and to improve the market’s capability to absorb and allocate labour, could never befully successful: some individuals and groups would, despite the best of efforts, not be able tomatch the standard work capacity or skills that would make employing them for the standard
wage economically feasible. A range of measures that conceptually remind of sedimenttreatment techniques in an industrial flow system were developed, to check and reduce thiscategory.
a) Aided integration through ‘market correctives’ in the mainstream labour market: Wagesupplement subsidies for disabled people were introduced to offset such employees’ competitive
disadvantage, and grants for the adjustment of individual working places were made available toemployers. Strong and articulate organizations of the physically handicapped were able to act
within the popular movement tradition, to drive forth active policies that effectively expand thelabour market so as to include this group (primarily, physically handicapped and less-grave
functionally handicapped).
b) Sheltered workshops: Mentally and functionally handicapped were less able to articulate
demands and to design solutions, and fared less well. Those capable of regular work thatnonetheless encountered difficulties in fitting in ordinary workplaces (due primarily to mental,
intellectual or emotional insufficiencies) were accommodated through a countrywide network ofsheltered workshops, that subcontracted simple assembly and packaging tasks from industry. The
public authority, Samhällsföretaget (literally ‘Society’s Enterprise’) was restructured 1980 andincorporated as a fully State owned joint-stock company under the name Samhall. The creationof this public system for work-integration, plugged the last breach in the state-business duopoly,and barred social economy organizations from any engagement in mainstream integration tasks
or in job-creation.
c) The residual group: Those for whom no suitable employment could be allocated throughpublic programs (primarily persons that for a variety of reasons cannot fit in a regular workplace
regime) constitute an ‘untreatable’ sediment in the labour flow system that ought to be removed
in order to facilitate flow. Towards this group, the Welfare State’s function is reduced to thedispensing of welfare, through an array of institutional measures that range from long-term sickleave through hospitalisation (institutional custody) to early retirement. Unlike unemployment
insurance benefits, that are contingent on their recipient disposability and willingness to take anoffered job, inability benefits connected to souch quasi-medical labels only assure basic income
maintenance, and are contingent on their recipient not attempting to engage in an economic
activity, thus effectively excluding such persons from ‘the work line’. To some extent, early
pension was also awarded to long-time unemployed that lacked realistic prospects of everobtaining an employment. The tendency to do so was varies between periods and regions11.
To recapitulate12: the strong emphasis on mutuality and the arbetslinjen-ethos of self-help andintegration through the mainstream labour market institutions contributed to the Swedishmodel’s normative consistency and stability and paved the way for the emergence of a wellfunctioning, dynamic labour market and of active policies of work integration and functional
modification of work-places. At the same time, it also unwittingly cemented the marginalizationof groups whose ability to ‘help themselves’ within the existing order was limited; that wereneither able to articulate their own interests nor could fit the workplaces the economy generated.
2.2 Changing labour market policies

11

Labour market considerations (Sw. arbetsmarknadsskäl) are no longer a valid reason for awarding an early
retirement, and do not form an identifiable statistical category. Available data show however that thepropensity to award early retirement is stronger in regions and in times with a weak labour market.
12This paragraph is based on Laurelii and Stryjan, (2002)

The Swedish Model was designed for a homogenous society, and assumed a continuous
industrial expansion, in which productivity gains directly translate into increased demand forlabour in growth sectors. Those assumptions, that were initially formed in the 40s, became
increasingly untenable in a post-industrial economy, in which growth and investment were nolonger linked with the creation of new jobs in industry. The previously well-integrated elementsof labour-market policy started drifting apart, as it were, under the pressures of social andeconomic change. Business no longer generated a demand for traditional industrial manpowerthat the ‘active labour-market policy’ tools were designed to provide, while jobs in emerging
industries posed skill demands that the traditional policy tools could not meet. In thisincreasingly selective labour market, the least ‘attractive’ groups tend, unavoidably, to be
selected against, and form a growing sediment that silts up the active-labour policy’s labour
flows and increases the ranks of the permanently unemployable.
The public tools of integration, that were supposed to take care of those that the active labourmarket policy failed to integrate, faced a different sort of crisis. The sheltered workshop system,
now incorporated as a business enterprise (Samhall) whose sources of revenue were a state
contract for set volume of workshop-places, and the revenues that the workshops generated, wascaught between a declining volume of state comissions on one hand, and a shrinking market for
its products on the other. Samhall’s yearly grant was reduced by 14 percent in nominal terms in
the course of the last decade13 with a further cutdown of 125 MSEK (roughly 15 M Euro) in
2003. Contracted employment volumes declined at a slightly steeper rate: from 33,6 to 28,5
million work-hours per year, respectively, with a projected cut to 27,5 in 200314. At the sametime, Samhall’s market niche as a subcontractor (packaging, wiring, simpler assembly tasks) tolarge export industries, first and foremost in the telecom and IT branches, that generated aconsiderable revenue in the IT -boom period of the late 90s declined, as those industries entereda crisis period and/or relocated their production facilities to low wage CEES countries. Samhall
attempts to offset this trend by diversifying into the service industry, were half-hearted andlargely unsuccessful. Given the organization’s industrial tradition, and the nature of the
manpower employed, this outcome is hardly surprising.
An additional reason for the marginalization of Samhall, was the change in the composition of its
target population, as new demographic and social groups that did not fit into Samhall’s
traditional workshop discipline joined the ranks of the marginalized:• the former inmates of the now disbanded mental hospitals and institutions for the gravely
mentally handicapped, that were relocated into mainstream society, but could not handle thedemands of a structured work-place.
• Immigrant- (primarily refugee) groups, that increasingly form ethnic enclaves in themetropolitan periphery, that were by far too capable to fit into such a system• Young persons (first and foremost secondary school dropouts) that never managed to enter thelabour-market
The discrepancy between samhall’s mission and the actual needs is best illustrated by figures:
the number of persons totally excluded from the labour market (long-term unemployed are notincluded in this figure) was 488.500 in December 200215.. In comparison, Samhall employed
merely 25 328 persons in 2001, and somewhat less in the two following years, i. e. about fiveprocent of the target population.
Samhall’s ongoing downsizing provides a clear signal of (central) state’s changing orientation,
and a growing insight that exclusion is not primarily a labour-market issue, to be resolved by
13from 4960 million SEK in 2002, to 4262 MSEKin 2002. The rate of exchange between the SEK and the Eurofluctuated in the range of 8-9,5 SEK per Euro throughout the period. Exchange rates and price-levels are only
indirectly linked, and a direct conversion can be misleading.
14
Dagens Nyheter’s economic pages, 18 Jan 2003.
15
Dagens Nyheter daily, 21 Dec 2002

centrally steered labour-market policy tools. It should instead be perceived as a social problem,
to be handled by local society and its central social, political and economic actors. Trivial as thisinsight may sound, it signals a profound figure-ground reversal in Swedish social policy. Thus,in parallel with the decline of Samhall, that signalizes a diminishing direct central involvement
in integration measures16, resources were channelled into new approaches to the problem. A
growing portion of the responsibility for problems of exclusion, as well as for designingsolutions to combat it, is shifting to local government, and the local branches of the central
authorities. This segment of the public sector will be reviewed in section 2.3, below.
2.3 The changing role of the public sector
The Swedish public sector traditionally dominates the fields of welfare and labour market policy.
The way the two fields are managed has been subject to a series of reforms from the 90s andonwards. The objectives of these reforms were twofold:a) introducing welfare pluralism into the sectorb) redrawing the boundaries between the fields of competence of the two levels of local
government, and between these and the state.
The road to welfare pluralism proceeds, in the Swedish case, from a virtual public monopoly onmost welfare services and all labour market measures towards a somewhat decreased
involvement of the public sector; the opposite direction to that pursued by Southern European
countries. Further, pluralism, in this country, applies rather to the actual production of services,not to their financing, that remains an exclusively public prerogative. Since alternative forms offinancing (donations and fees) are not perceived as legitimate, and do not provide taxation breaks,
public financing will remain a central factor in the foreseeable future.
The public sector’s specific structure and mode of operation deserve some attention: while
highly bureaucratic, the sector never crystallized into a single strong hierarchy17. The national
level is split between relatively small ministries and largely autonomous national authorities andboards. There are two-tiers of local government: counties and municipalities, each with its own
elected assemblies and independently set income tax. Parallel to these, the government andnational authorities branch down to agencies at county, and in some cases municipal level.
While each of these (sub) systems has a fairly rational own structure and reasonably definedtasks and responsibilities, there is no clear order of precedence between these, and their fields ofactivity at any given level criss-cross and overlap. All levels enjoy a substantial degree of
discretion in interpreting and implementing central directives. The health and welfare reforms of
the 90s (first and foremost the so-called Ädel and Psyk-ädel reforms) considerably reduced(central) state’s involvement in health, education and welfare, downsizing central agencies,
closing down large institutions, and divesting much of the remaining responsibilities to local
government, first and foremost the municipalities, that also took over some of the residencerelated care tasks previously handled by the county councils. Even after this streamlining, thefield still remains quite fragmented between the largely municipal social care and rehabilitation
services, medical care at county-level, and the national labour-market authorities. At present,
most acute medical and psychiatric care and some rehabilitation are managed and financed by
the county authorities; income maintenance during illness is managed by the local branch ofnational health insurance; disability pensions and early retirement are in the charge of thenational insurance’s central authority (and not the local insurance offices, though these have aconsiderable say in the labelling of individuals as permanently disabled); psychiatric care, as

16

A parallel development, which will not be discussed here, can also be observed in the Labour-Market Board(AMS), that manages the mainstream tools of labour market policy.
17
Gillet de Monthoux (1990) labels this institutional arrangement ‘the soft state’.

well as social care are largely run and financed by municipalities; etc. A rough mapping of thevarious organs that are active in this field will be presented in figure 1, below:
One effect of this labyrinthine web of organizations, entitlements and obligations, is to reduce topassivity less well adjusted individuals that come in contact with it. The situation also rewards
opportunistic re-classification of clients by social care organs (thus, for instance, the discharge ofa mental patient shifts the cost of follow-up care from county to municipality; the reclassificationof a sick-leave to disability pension yields short-range budgetary benefits and reducesadministrative costs for the local social insurance organs, while increasing the long-range
budgetary load on the central insurance organs, and so forth).
Figure 1: authorities active in the fields of labour, care and integration
Government Labour,Marketpolicyguidelines

Healthcare(acute)Rehabilitati Social policy Earlyon,
directives
retirement
home care,Illness
addiction,
benefits, etc
socialhousing,social care
Associatio Association of Social Policy Natio Asso
National Appropriate Labourmunicipalities*
ministries
Marketn ofBoard,-nal cof
Kommun(labour,
Board, AMS County
insu- insuSocialförbundet
health,Councils*
rance rance
styrelsensocialboard offiLandstingsaffairs)ces*-förbundet
CountyCountyCounty County
governor & Labour
councils
CountycountyBoard, Länsinsurance
board
boardsarbetsnämnd
enLabourmarketinstitute(AMI)
Employment
Municipaliti
Local offices
Localofficeses* the organizations marked with an asterisk are interest organizations representing local
constituent organizations. They do occassionally co-initiate or co-finance projects in the field ofcare and integration.
The ‘processing’ of an individual through the labour and welfare systems, towards exclusion
through a quasi-medical labelling (disability pension, etc) is a sequence of decisions taken
independently by separate authorities, that ‘pass on’ the individual from one to another. In thecourse of this journey, income support is made conditional on withdrawal from the labour market,
to and hinders are created to preclude any attempt to return to work. Inasmuch labour-market
authorities only deal with returning registered unemployed to work, while social care officers
lack facilities (and, indeed, the mandate) to direct excluded individuals back to work, the pathhas only one direction. The progressive increase in the ranks of the early retired needs not be a
product of conscious design. It may instead be seen as an unintended consequence of rules thatturn early retirement into an institutional trap that is much easier to construct than to reverse.

A growing insight that the root cause of labour market exclusion is the lack of appropriate
coordination between various authorities that operate in the field (SAMVERKAN 2000),
motivates an active search for ways to improve the situation. Traditionally, coordination between
Swedish authorities was managed through contacts between the top levels of various
bureaucracies, in which a new, common ‘optimal’ set of regulations is negotiated. However, thecreation of a new institutional path that would lead out of exclusion and back towards
employment is a matter of forming a new praxis, rather than of introducing additional regulations,and of dissolving the demarcation lines between authorities, rather than of modifying them.
Innovative implementation and adaptation of existing rules, and new ways of utilizing theexisting resources, require a cooperation that focuses on the local level, with public authorities in
the role of potential partners and (co-)financing sources, rather than of arbiters of policy. The
developments of the last decade in the field of rehabilitation and labour market integration open
new arenas, introduce new norms, empower new actors that make such cooperation more likely,
and open the field for new organizational solutions.
Some of the central features of the emergent order are summarized in figure 2, and discussed in
more detail lower down in this section.
Figure 2: Changing models of lateral coordination in the Swedish public sector

ActorsTraditional model
Top levels (of respective bureaucracy)

ArenasCommittee or discussion forums

Rules

Interdepartmental negotiations,departamental budgeting routines.

Outcomes

New regulations, accounting systems
etc, often added to old ones.

Emergent model
Local level administrators;
practitioners, brokers (often from thesocial economy), new organizations
Partnerships, local initiatives, networks,
generally on municipality level, often
facilitated by broker/entrepreneur
Exchanges formalised as economictransactions, partnerships, matchingfinancing arrangements.
New organization forms

Arenas: An important result of the reforms of the 90s is the emergence of the municipal level asa promising, structured ground for cooperation. The reforms that linked most aspects of carefor ‘medically labelled’ excluded persons (e.g. drug addicts or former mental patients), to theperson’s municipality of residence, provided a powerful stimulus for integration. Different
aspects of care that were previously split among a plethora of organizations, at state andcounty level, were now gathered under a single institutional host, that also was bestowed witha considerably extended autonomy 18 . Moreover, municipalities have a direct stake inimproved cooperation, as they bear a large part of the costs of rehabilitation and integrationbut also stand to reap most benefits from successful rehabilitation. The emergence of
excluded ethnic enclaves in the metropolitan regions (SOU 1996:54), whose inhabitants areoften directly reliant on municipally financed social care, further motivated the municipalities
to seek and actively promote cooperation with other agencies. Some municipalities engaged
in the creation of their own, municipal solutions (e. g. through the creation of municipal
18

As is often the case with reforms of this type, municipalities’ expanded responsibilities were not fully covered byappropriate financing. Instead, former earmarked grants was replaced by block funding to broaden municipalitias’
freedom of action.

corporations), while others opened their ‘local turf’ for new actors, such as social cooperatives or voluntary organizations
Rules: two forms of lateral cooperation across sector boundaries and departmental divides win
increasing acceptance within the public sector, namely partnerships and joint projects. The
high degree of discretion that various authorities and their branches enjoy, makes PPP(public-private partnership)-models both attractive for- and highly applicable to public actors
as well. Virtually any of the actors listed in figure 1, earlier in this section, may now enter apartnership with any other(s) if fields of common interest are identified. Such partnerships
may also include private actors proper, but need not do so. Indeed, public-public partnerships
are quite frequent. The same applies to projects, which often span different parts of the sector,
though with one important modification: partnerships within the sector generally rely on (andreallocate) available budgetary resources, while intra-sectoral project-formation is often
stimulated by potential availability of additional project funding, by the state, or, increasingly,
by the European Union.
The diffusion of New Public Management models provides administrative tools that facilitatetransactions and flows of funds between (sub)sectors of public bureaucracy, and has (at leastin the present stage) increased flexibility- encouraging lateral contacts and coalition
formation. It also blurred the distinction between public, private, and voluntary actors. The
availability of EU financing has opened new channels for mobilization of resources that areless controlled by the political centre, shifting the balance between central policy measuresand local initiatives, to the advantage of the latter. The fact that in natura voluntary
contributions may, under these rules, be leveraged by a matching financing enhances thebargaining position of voluntary organizations in negotiating forth emerging partnerships.
Actors: as noted above, all units within the public bureaucracy may engage in independentaction within their (loosely defined) areas of competence. Current developments also opened
the field of employment and integration measures for a re-entry of social-economy actors,
that were not allowed to engage in labour market issues throughout the Post-War period. The
networking skills developed by these organizations throughout the period, as well as thepractical experience gained in work with problem groups (problematic residential suburbs,
the young unemployed, and immigrants; see SOU 1996:54 and Stryjan and Wijkström, 2001)
and with ‘non-job’ solutions, became an important asset in the new situation. Social economy
actors (first and foremost Cooperative Development Agencies) primarily engage as brokers,
that connect other actors and help to mobilize coalitions around new initiatives. They also
provide assistance to initiatives by the excluded themselves. The broker role is, to someextent assumed (or aspired to) also by Samhall, that attempts to develop a consulting arm,
which could capitalize on the organizations considerable experience, and generate additional
revenues for the corporation.
New organizational solutions: the general blurring of the traditional boundaries between public,
private and social-economy actors and fields of activity leads to the emergence of hybrid andboundary-spanning organization forms. Thus, Samhall is increasingly outsourcing of its core
activity (of employment and rehabilitation) to other actors. Municipally-owned quasicommercial ventures that offer training, rehabilitation and work-integration services tolabour-market authorities (and to Samhall) emerge in municipalities 19 . An outstanding
illustration of the conceptual and legal complexity of the solutions developed is provided by
the Nordanstig municipality (in northern Sweden), that outsourced its labour-market
department to a cooperative association that was formed by its two former labour-market
officers together with one long-term unemployed. Among other initiatives and commitments,

19

See, e g www.CLL.karlskoga.sethe association also employs a group ‘contracted out’ by Samhall. Eventual profits are shared
between the municipality and the cooperative.
The realignment of Swedish Labour-market- and integration policy involves labour market-,municipal-, and social authorities, in new roles and capacities, and opens the field for neworganizational solutions, and for the entry of new actors.
An important role in this process is played by organizations in the social-economy, first andforemost within the CDA (cooperative development agency) system, that act primarily asknowledge brokers, that• design and/or diffuse new organizational models,• mobilize potential financing organs• facilitate the formation of supporting coalitions and partnerships between them• handle in some of the cases the recruitment and schooling of participants
contributed to the emergence of..
Rather than integration or "job creation" in the narrow sense, the initiatives developed to reachthose excluded from the labour-market are often geared to create a blend of regular jobs and,"non jobs", that are carried on voluntary basis, often within emergent small businesses. The
growth pattern followed is, generally, that of proliferation, rather than of expansion (cf. Stryjan
and Wijkström, 2001), i.e. facilitating the formation of additional new organizations, in emerging
fields, rather than expanding and diversifying established ones.
The process of transformation of the Swedish health, welfare and labour market sectors from amonopolist ‘public sector’ to a more pluralistic configuration gained momentum in the 90s andhas not been completed as yet. While it is possible to suggest a convergence around a broadly
defined model of welfare pluralism, the direction in which this process unfolds in Sweden isdifferent from that in many European countries, for the simple reason that the starting point was
highly different. The strong position of the state, the absence of (and aversion to-) a tradition ofcharitable action, and the strong emphasis on self-help and mutuality define the important actors
and the range of alternatives being developed. For the time being, development proceeds towards
increasing diversity, and the testing of new solutions, rather than towards selection,
standardization and institutionalisation of a handful of models. The diversity of rules androutines between municipalities, differences in the local implementation of regulations, even
within national authorities, and the deep-seated resistance to harmonize these, are importantfactors behind this diversity.
Some of the main forces (re)shaping the field are:State involvement: a growing awareness that new solutions are called to handle the problem oflabour-market exclusion have led to an effort to increase the flexibility of the rule system, tolower the thresholds (in a recent legislation) for the return to the labour market of those excluded,
and to increase cooperation between authorities. The mainstream public policy solution of theearlier period- the network of state-run sheltered workshops Samhall - is presently being scaled
down. A part of the human resources of Samhall is consequently diverted to consulting tasks,
assisting other actors (primarily municipalities) in developing their own solutions.
Municipal involvement: historically, care for the excluded and its financing were split between
various levels of local and central government (thus, the now defunct large psychiatricinstitutions were run and financed by the state, that also provided for the inmates’ subsistence,large portions of home-care were provided by county councils, etc). Local government reforms
from the late 80s and onward divested both organizational and budgetary responsibility forservices to excluded groups to the municipal level. Consequently, both care and rehabilitation for
the excluded and the budgetary responsibility for the outcomes of rehabilitation are now

deposited, for the first time, in one and the same authority. Being new to the task, municipalities
were also considerably more open to untraditional solutions.
Diffusion of models: occurs both nationally and internationally. Thus, the community enterprisemodel owes its emergence to impulse from Scotland. Important influences from Italian drugaddict rehabilitation collectives were explicitly incorporated in Basta (Hansson and Wijkström,
2001), and provided more indirect inspiration in other cases. At the national level, the twomodels are primarily promoted by the association of community businesses and by the Social
Cooperative Project respectively, and by the Cooperative Development Agencies. For the time
being, it is impossible to talk of explicit competition or animosity between the practitioners andproponents of the different models.

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