Why does free riding not escalate in the universal Nordic welfare state? How is it possible to maintain such a cooperative equilibrium where most people tend to cooperate? Our model suggests that the “missing link” is the accumulated stock of cooperation norms in terms of social trust. Arguably, a sufficient number of norm enforcers facilitate this unique collective insurance system.

Gert Tinggaard Svendsen

Urs Steiner Brandt

English

Research Papers in Economics

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The Survival of the Nordic Welfare State and Social Trust

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