Performance Differences In Europe: Tentative Hypotheses On The Role Of Institutions

Low growth in Europe and persistently high unemployment raised the question whether it was the specific features of the European Social Model, which lead to these disappointing results. This paper defines the characteristics of the model, and the differences between submodels applied in different European countries. Then it carves out which specific characteristics of the Nordic European Model, which changes in economic policy and strategy made these countries successful over the past ten to fifteen years - after the same countries had experienced recurrent crises in the decades before. Specifically, the authors look at the role of institutions and of their changing priorities for making the Scandinavian countries better able to cope with change as compared to Germany, Italy and France.