For the past decades, these five countries have competed with each other and all European countries for economic prosperity and social development. Successfully as it seems: all Scandinavian countries now rank among the best in Europe when comparing the Eurostat GDP per capita (link) or the UNDP Human Development Index (link).
And in any up-to-date ranking like the Prosperity Index (link) all five Scandinavian economies rank higher than the UK.
Even though the Scandinavians never had Colonies, an Empire nor an universal language like English. They did not even have a population even close to that of the United Kingdom and still today only count some 26 million people all together compared with 64 million in the UK.
That is after all 60% less people to run an efficient economy. At the same time in a much harsher climate and in a much vaster geographical area, some 5,4 times bigger than the United Kingdom.
These facts certainly do not give them any economic or “comparative advantages”. In the contrary, they should be loosing ground when comparing their societies and economies with countries like Germany, France or the United Kingdom. Any investor or economist would suggest that bigger countries would prosper more easily thanks to “economies of scale”.
Now, the Scotsman, author and professor of History, Niall Ferguson at the University of Harvard, gives us a clue to why the Scandinavians prosper: they have the better Institutions, thus the better societies and economies. And I dont think he means they just have a better Governance with a great welfare state provided for by the tax payers. They had the better “Killer Apps“: Competition, Science, Property Rights, Modern Medicine, Consumerism & Work Ethos, quoting from his book “Civilization: The West and the Rest”.
On this insight I could also cite Daron Acemoglu and James Robinson from their book “Why Nations Fail” (link).
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