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What Makes Scandinavia Such A Happy Place?

Swedes enjoy a sunny afternoon on the terrace of a bar in Stockholm.
Swedes enjoy a sunny afternoon on the terrace of a bar in Stockholm.
LONDON -- In many countries, authoritarian governments speak only of prosperity in terms of economic wealth.

If they are the governments of oil-rich countries, they speak of how the country is becoming wealthier as exports increase. And they reject any notion that citizens have the right to be unhappy with autocratic rule because, the officials claim, restiveness just slows economic development.

For regimes ruling resource-poor countries, the logic remains the same. Only a strong guiding hand, they say, can construct a better future. So, stop complaining.

But if that argument is commonly heard from Moscow to Baku to Central Asia, there is a growing body of evidence that only the authoritarians themselves believe it. In countries around the world, polls show, people define prosperity and happiness in much broader terms than simply economic growth.

A group of economists and sociologists recently gathered near London to discuss how to better understand what makes people consider their own countries as successful and their own lives as happy.

The host of the conference was the London-based Legatum Institute, which annually publishes a Prosperity Index that ranks 110 countries according to what the countries' own citizens tell pollsters. The polling data itself comes largely from surveys conducted by the Gallup Organization, which each year interviews 1,000 people in every country of the world on a host of subjects.

One of the things that intrigued the social scientists is the way Scandinavian countries have consistently topped the Prosperity Index since it began four years ago. That suggests that the Scandinavian countries -- which indisputably have large GDPs -- might hold the key to understanding what conditions in addition to wealth must be present for people to report a high sense of well-being.

Some of the conditions might seem obvious. For example: good health care, good education, and good safety and security. So, too, might economic opportunity and the freedom to start one's own business in an environment free from predatory officials and corruption.

But other conditions that lead people to report they feel their life is worthwhile might be less self-evident. And those are often the very same ones that authoritarian regimes claim are unimportant or which they themselves undermine.

Those things include enjoying the personal freedom to speak, read, vote, and worship as you want. And they include enjoying a sense of social trust -- that is, a sense that those around you trust in the society and are themselves trustworthy.

The Importance Of Trust

The sense of trust is so high in Scandinavia that to some researchers it seems to be the most mysterious and potentially important factor of all for explaining why Scandinavians lead the world in considering themselves prosperous.

The most recent Prosperity Index, published in 2010, showed 74 percent of Norwegians believe other people can be trusted, the highest such rate in the world. Denmark came in second, with 64 percent finding others trustworthy; Finland third with almost 60 percent; and Sweden sixth, with 56 percent.

Economist Andreas Bergh: "The honest answer is we don't know where trust comes from."
Andreas Bergh, an economist with Lund University and the Research Institute for Industrial Economics, explains just what Scandinavians mean when they say they trust others and what advantages -- both economic and psychological -- that gives their societies.

"By that, I mean the widespread belief in the population that most people can be trusted," Bergh says. "And the fact that most people can be trusted refers to things like obeying agreements, trading as they say they are trading, behaving in an honest way and, of course, behaving in a trustworthy way, so that you trust people and they are trustworthy in return."

The benefits, he says, run all the way through society, from speeding business deals to reducing the need for official regulations and oversight, to enabling people to agree on social benefit programs.

In Sweden, which is famous as a welfare state, the high level of trust even means people are willing to pay high taxes to support government social services because they believe their fellow citizens will not abuse the system.

"There are several benefits," Bergh says. "One of the most obvious is the fact that when two people trust each other they can more easily engage in trade that benefits them both. They don't have to worry that the other one will cheat or run away from the agreement and they don't have to, perhaps, write contracts and spend resources to enforce the agreement, because they basically trust each other. So, all trade agreements go much more smoothly with trust and trustworthiness.

"The second big benefit is that you can also trust government to behave in a noncorrupt way, which means that you are able to create social insurance schemes that benefit everybody and they can be trusted not to take unfair advantages or to misuse these benefits schemes. So it makes it easier to have a big government sector, and it probably decreases the negative impact that taxes have on the economy."

How Did It Happen?

But how did Scandinavians develop such a high level of trust in their institutions and in each other?

That, Bergh says, is a much more difficult question to answer.

"Well, that is indeed a difficult question and there are many theories," he says. "Some say that [the high level of trust] comes from the fact that Sweden used to be a homogenous country. That is no longer true and yet we are still highly trusting. Others say it comes from the fact that the climate was cold so you needed to cooperate with others to survive in a cold climate. But then again there are countries with high trust that are very warm, so that might not be a good explanation.

"Others say that trade causes trust. When you meet other people and you decide to trade with them rather than engage in violent conflicts, this might foster a mutual attitude that we might actually achieve something together if we both trust each other, and that might also be true. But the honest answer is we don't know where trust comes from."

One reason it may be so hard to know where trust in other people and in institutions comes from is that the two clearly reinforce each other, but nobody knows which comes first.

Do trustworthy institutions create a trusting citizenry? Or does a trusting citizenry create trustworthy institutions?

The answer for Sweden no longer matters. The country already has a trusting population that enjoys the fruits of having an efficient government elected to look after the society's interests and not its own.

But for other countries struggling under authoritarian regimes, the question of how to foster social trust remains an important part of finding the way to both material wealth and a high sense of personal well-being.

Social scientists who gather information about what makes people consider their lives most worthwhile are still only at the point of exploring these difficult questions. But already they can conclude and -- as the recent conference showed – prove that economic growth alone is not enough. And that can only encourage the millions of people who still struggle under autocratic regimes to keep fighting to make governmental institutions honest, to curb corruption, and to win greater personal freedom.

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