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Demokratiskolan
The Growth card from MethodKit for Society and Politics
Card 111 of 128 · MethodKit for Society & Politics
  • AreaEconomy & work
  • Centre of gravityCentral government
  • Points of influence3 on the journey
  • Decisive electionThe general election
Economy & work

Growth

Growth or shrinking, in one way or another

Growth is the measure of whether the economy is expanding or shrinking, and it steers almost everything else: tax revenue, jobs and what welfare can afford. The central government holds the big levers, fiscal policy in the Riksdag (Sweden's parliament) and monetary policy at the independent Riksbank (the central bank). But growth is also created by every company that hires and every municipality (kommun) that makes it easy to build.

Where does the power lie?1

  • Municipality · plans, building permits & business climate · approx 15 %
  • Region · regional development · approx 10 %
  • State · budget, taxes & central bank · approx 55 %
  • EU · internal market & funds · approx 20 %

The central government holds the levers: the budget in the Riksdag, the interest rate at the independent Riksbank. The general election weighs heaviest, but the everyday of growth is often decided locally.

How it works: the breakdown

The municipalityThe everyday conditions
The regionThe county's growth plan
Central governmentThe big levers · centre of gravity
Who decides?
The municipal council (kommunfullmäktige), the building committee (byggnadsnämnd) and the business office.
The regional council (regionfullmäktige) and the regional development committee.
The Riksdag, the Government, the Riksbank and SCB, which measures.
What do they decide?
Detailed development plans (detaljplan), building permits, land, adult education and service that decide whether companies can grow in town.
Regional development strategy, business support, skills supply and public transport that widens the labour market.
The central government budget, the taxes and the fiscal policy framework. The Riksbank handles monetary policy independently.
Where are decisions made?
In the council and committees. Plans go out for consultation (samråd).
In the regional council, together with municipalities and business.
In the Riksdag's budget process every autumn. SCB publishes the GDP figures openly.
Who pays?
The municipal tax, whose size in turn depends on growth.
The regional tax plus national and European development funds.
The central government budget redistributes hundreds of billions, and growth decides the room for it.
Fastest way in?
Municipal election Consultations on plans, citizen's proposals (medborgarförslag), dialogue with the business office.
Regional election Respond when the regional development strategy goes out for consultation (remiss).
General election The general election is growth policy's most important election. Respond to referrals (remiss), contact members of the Riksdag.
EUThe internal market is Swedish exports' home turf, and the EU scrutinises member states' public finances and co-finances regional development. Influence it in the European Parliament election.

Read the table by column to understand one level, or by row to compare the levels. The green level is the area's centre of gravity.

How it works: follow the decision

The case A budget is to get the economy moving
  1. State

    SCB measures: growth is slowing

    The statistics agency SCB (Statistics Sweden) publishes GDP figures every quarter. When the economy slows down it shows here first, open for everyone to read.

  2. EU

    The frame around the budget

    The EU scrutinises member states' public finances, and Sweden's own fiscal policy framework with a surplus target and an expenditure ceiling sets limits on how much policy may step on the gas.

  3. State

    The Government presents the budget bill

    In the autumn the Government proposes investments and tax changes to meet the situation. At the same time the independent Riksbank sets the interest rate based on inflation, not on the election campaign.

    Point of influence

    The general election decides which government writes the budget.

  4. State

    The Riksdag decides

    The finance committee prepares and the Riksdag decides first on the budget's frame, then on each expenditure area. The debates and the votes are public.

    Point of influence

    The members of the Riksdag can be contacted, and the committees' reports are open documents.

  5. MunicipalityRegion

    The money lands locally

    Central government grants reach municipalities and regions, which build, educate and procure. Detailed development plans, adult education and infrastructure decide whether the investments become real jobs.

    Point of influence

    The municipal and regional elections steer how the money is used where you live.

  6. Your everyday life

    Growth shows up in the pay packet

    More jobs, rising wages and a municipality that can afford the swimming pool. Or the opposite. The GDP curve is abstract, but its consequences live at home with you.

The journey looks the same in reverse: what has been built came the same way, through the same decisions. Whoever knows where the decisions are made also knows where they can be changed.

Questions to discuss

  1. What does growth mean in your everyday life: pay, a job, housing or something else?

  2. How should growth be weighed against the environment and the climate when they pull in different directions?

  3. What should grow in Sweden that is not measured in GDP?

  4. Growth is distributed unevenly between towns and groups. What would a fair distribution be?

  5. Which decision in your municipality would do most to make companies dare to grow there?

Glossary

BNP
Gross domestic product, the value of everything produced in the country during a year.
Finanspolitik
The Riksdag's and the Government's steering of the economy through taxes and public spending.
Penningpolitik
The Riksbank's steering of the economy through the interest rate, independent of the Government.
Överskottsmål
The rule that the public finances should show a surplus seen over a business cycle.
Utgiftstak
The Riksdag's decided ceiling for how much the central government may spend in a given year.

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Footnotes

1) This is an estimate of how decision-making power over the issue is split between the municipality, the region, central government and the EU, based on how responsibility is divided in legislation. A teaching guide, not an exact measurement.