It's long been recognised that the lucky people of the Nordic countries are much happier (on most indicators) than the rest of the western world. But why?
Every year the World Happiness Report submits its finding to the UN. In 2020, the WHR applied a particular focus to the five Nordic countries – Finland, Denmark, Norway, Sweden, and Iceland. Since 2013, have all been in the top ten, with Nordic countries occupying the top three spots in 2017, 2018, and 2019. Clearly, when it comes to the level of average life evaluations, the Nordic states are doing something right, but Nordic exceptionalism isn’t confined to citizen’s happiness. No matter whether one looks at the state of democracy and political rights, lack of corruption, trust between citizens, felt safety, social cohesion, gender equality, equal distribution of incomes, Human Development Index, or many other global comparisons, one tends to find the Nordic countries in the global top spots. What exactly makes Nordic citizens so exceptionally satisfied with their lives?
The following are the findings of the World Happiness Report 2020:
History and the Hunt for the Root Cause
The key difficulty in explaining Nordic exceptionalism is that the Nordic countries rank highly on such a number of well-being predicting indicators that it is hard to disentangle cause and effect. There are a cluster of factors that tend to co-occur, including high life satisfaction, high levels of social and institutional trust, high-quality democratic institutions, extensive welfare benefits, and social-economic equality, and this cluster of factors is nowhere else so strong as in the Nordics. However, from the point of view of policy-makers interested in replicating the Nordic model, it is not particularly helpful to know just that all of these positive factors are concentrated in the same countries; rather, policy-makers need concrete ways to produce higher levels of happiness, and those can be hard to find.
Some argue that if a country is trapped in a vicious cycle of low social and institutional trust, high corruption, and high levels of inequality, it can be hard to build the citizen and public servant trust needed to make the necessary reforms for a more trustworthy and representative system that serves all citizens equally. The Nordic countries, in contrast, are arguably caught up in a virtuous cycle, where well-functioning and democratic institutions are able to provide citizens extensive benefits and security, so that citizens trust institutions and each other, which leads them to vote for parties that promise to preserve the welfare model.
Both of these situations might be thought of as relatively stable, and thus, the crucial question is how to get from a low-trust equilibrium to a high-trust equilibrium. Here, a historical look into how the Nordic countries made this leap provides some insight.
In the beginning of the modern era, the Nordic countries didn’t have the kind of feudalism and serfdom that characterized continental Europe and Russia. Farmers were relatively more independent and many of them owned the land they cultivated. Furthermore, in the decades leading to the twentieth century, farmers held significant political power, even within the Nordic parliaments. Although there were class conflicts in the Nordic countries, as well – most dramatically the Finnish Civil War between leftist “reds” and rightist “whites” in 1918 that led to over 30,000 casualties – the divide in the Nordics was less deep than in most other countries during that era, making possible “a historical compromise” and the development of a “spirit of trust” between the laboring classes and the elite in the early decades of the twentieth century.
While in other Nordic countries, the transformation was peaceful, what is remarkable of the Finnish trajectory is how quickly after the civil war the unification of the country started. Many institutions were reconstructed in a few years. For instance, less than a year after the end of the war, the Social Democratic Party, which had been on the losing side of the war, was allowed to participate in general elections and became the biggest party in the parliament. Within a few years, most of the reforms that the left had fought for in the civil war, such as the agrarian land reform, had been implemented through parliamentary means.
One potential root cause for the Nordic model thus could be the fact that the Nordic countries didn’t have the deep class divides and economic inequality of most other countries at the beginning of the twentieth century. Research tends to show that inequality has a strong effect on generalized trust. In more equal societies, people trust each other more. This increased trust contributes in the long term to a preference for a stronger and more universal welfare state. Although statistics about social trust do not exist from a hundred years ago, we know that levels of social trust tend to be remarkably stable over relatively long historical periods, supporting the role of social trust as contributing to the building of better institutions.
The quality of governmental institutions seems to also have been relatively good in the Nordic countries already in the late 19th century, with independent court systems able to handle corruption-related matters fairly well. This made key institutions more trustworthy and reliable, giving both the common people and the elite the sense that reforms could be effective and would fulfill their purpose. Another important underlying factor might have been mass education. It has been shown that the mean number of years of schooling in a country in 1870 is surprisingly strongly correlated with the corruption level of the same country in 2010, explaining 70% of its variance. The Nordic countries invested heavily in universal and free education for all citizens, and one of the key goals was to produce citizens that have a strong national identity and sense of social cohesion, contributing to more social trust and institutional trust. Mass education was typically introduced in 19th century as a means of building stronger states. Often this was related to external threats that scared the elites to push for reforms to make their states more efficient, meritocratic, and less corrupt because this was seen as necessary for the survival of the state in the face of these threats.
As regards historical influences, some people argue that the legacy of the Protestant religion dominant in the Nordic countries contributes to Nordic exceptionalism. Indeed, in cross-cultural comparisons, Protestantism seems to be positively related to institutional quality and generalized trust, as well as higher life satisfaction. However, given that there are relatively few Protestant countries in the world, it is hard to say whether this has something to do with religion itself or if it is just a historical coincidence. Some argue that it was not the religious doctrines of Protestantism that contributed to more inclusive state institutions later on, but rather the fact that the local parishes in Protestant countries were more inclusive, egalitarian, representative, and monetarily accountable already in the 16th century as compared to other religious institutions. Rather than being an explanation for high institutional quality in Nordic countries, Protestant religious institutions might have been one part in the chain of historical institutional development taking place in the Nordic countries.
Accordingly, one way to try to understand the Nordic model is to state that high levels of social and institutional trust produced by mass education and relatively equal societal setting in the beginning of the 20th century made possible the public support for the welfare state policies that were introduced throughout the century, which further enhanced the social and institutional trust. Although there are many historical particularities and path dependencies that make the picture more complex, one could argue that the main flow of events towards the Nordic model started from low levels of inequality and mass education, which transformed into social and institutional trust, and later allowed for the formation of well-functioning welfare state institutions.
The Nordic countries are characterized by a virtuous cycle in which various key institutional and cultural indicators of good society feed into each other including well-functioning democracy, generous and effective social welfare benefits, low levels of crime and corruption, and satisfied citizens who feel free and trust each other and governmental institutions. While this chapter focuses on the Nordic countries, a quick glance at the other countries regularly found at the top of international comparisons of life satisfaction – Switzerland, the Netherlands, New Zealand, Canada, and Australia – reveals that they also have most of the same elements in place. Thus, there seems to be no secret sauce specific to Nordic happiness that is unavailable to others.
There is rather a more general recipe for creating highly satisfied citizens: Ensure that state institutions are of high quality, non-corrupt, able to deliver what they promise, and generous in taking care of citizens in various adversities.
Granted, there is a gap between knowing what a happiness-producing society looks like and transforming a certain society to follow that model. Low-trust societies easily get trapped into a vicious cycle where low levels of trust in corrupt institutions lead to low willingness to pay taxes and low support for reforms that would allow the state to take better care of its citizens. Thus, there is no easy path from the vicious cycle into a virtuous cycle. However, we shall give a few ideas for constructing what we see as helpful pathways.
Firstly, the quality of institutions plays a key role in ensuring citizen happiness. Thus, minimizing corruption and maximizing citizen participation and representation in various decisions can help to ensure that institutions serve citizens and maintain their trust. Democratic quality and factors such as free press, informed and educated citizens, and strong civic society play an important role in keeping the government accountable and citizen-oriented.
On a cultural level, arguably the most important factor is to generate a sense of community, trust, and social cohesion among citizens. A divided society has a hard time providing the kind of public goods that would universally support each citizen’s ability to live a happier life. In a divided society, people also tend to be less supportive of various welfare benefits because worry they would benefit the ‘other’ groups, as well. When people care about each other and trust each other, this provides a much more stable base on which to build public support for various public goods and welfare benefit programs.
Thus, institutionally, building a government that is trustworthy and functions well, and culturally, building a sense of community and unity among the citizens are the most crucial steps towards a society where people are happy. While the Nordic countries took their own particular paths to their current welfare state model, each country must follow its own path. If citizen well-being and happiness are truly the goals of government, then taking seriously research on institutional and cultural determinants of citizen happiness is the first step in starting an evidence-based journey towards fulfilling that goal.
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