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Why does the Northern Light shine so brightly?

Research output: Working paperResearch


  • 0003144

    Final published version, 525 KB, PDF document

Based on institutional economics, the paper develops a new model pointing at two main reasons why Scandinavia is doing so well in economic terms, namely the level of decentralisation and social capital in its broad sense. The idea in the model is that a political system, which decentralises power, means less lobbyism because access to economically harmful rent seeking is more costly. Consequently, social capital and the trust in other people and the political leadership will increase. This model, suggesting one single social capital measure, is applied to countries in both Western and Eastern Europe. The social capital ranking results indeed show that Scandinavia (Denmark, Norway, Sweden and Finland) is among the seven top ranking countries together with Switzerland, the Netherlands and Iceland.
Original languageEnglish
Publication statusPublished - 2002

    Research areas

  • social capital, decentralisation, economy, Scandinavia, Switzerland, Netherlands, rent seeking, transaction costs, economic freedom, corruption

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