The economic crisis in the early 1990s prompted action on reforming the Swedish welfare state and
its institutions, including deregulation of a wide range of product markets. In that way, Sweden took early
action compared to other OECD countries currently struggling with how to make public finances more
robust in an ageing context. The reforms that were implemented during the 1990s are now paying off in
terms of productivity and GDP growth. Empirical evidence suggests that deregulation has delivered a
considerable “productivity dividend”. Although significant progress therefore has been made, renewed
regulatory reform is needed to safeguard Sweden’s ambitious public policy goals. Efforts should focus on
improving enterprise formation and labour utilisation, as well as on providing better value for money in the
public sector by raising its efficiency and delivering high quality services.
