Stopping Private Providers Would Worsen Public Welfare

Removing private providers from publicly funded welfare services would make those services worse, argues Nils-Ola Widme, a participant in a Norwegian government review of the issue. His warning is aimed at Swedish left-wing and Social Democratic politicians who want an inquiry into limiting private actors in welfare.

Norway’s Støre government appointed the Decommercialization Committee in 2022 to examine how commercial providers could be phased out of tax-funded healthcare, care, preschool and schools. Widme says Norway ultimately did not proceed with the committee’s conclusions, while the Norwegian Social Democrats have effectively dropped the policy.

He advises Swedish politicians to replace what he calls a negative agenda with ambitious goals for better welfare services. Restricting providers, he writes, could suppress innovation and development at a time of labor shortages and rapid technological change.

Widme also challenges the idea that privately delivered, publicly funded services are commercial services. The public sector determines their scale, regulation, pricing, distribution and financing, he writes. A pupil at an independent Swedish school receives a public service funded by taxpayers, not a commercial service. Schools must provide at least the quality set by the state, and pupils retain the same right to free education whether the school belongs to a municipality or a company.

He acknowledges the concern that market-based welfare could give wealthier people better services while leaving poorer people without what they need. But he argues that public financing, user rights and providers’ duties already address that concern. His central recommendation is therefore to demand more from every provider rather than remove an entire category of them.