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Demokratiskolan
The Resource distribution card from MethodKit for Society and Politics
Card 91 of 128 · MethodKit for Society & Politics
  • AreaThe state & public administration
  • Centre of gravityCentral government
  • Points of influence2 on the journey
  • Decisive electionThe general election
The state & public administration

Resource distribution

How the crumbs & riches are shared (& used)

Few countries redistribute as much as Sweden. Money is moved from working age to childhood and old age, from secure times to crises, and from rich municipalities to poor ones. Most of it happens automatically through systems few know about, such as the municipal economic equalisation. Whoever understands the flows understands where the power over welfare lies.

Where does the power lie?1

  • Municipality · allocates in its own budget · approx 20 %
  • Region · allocates the resources of care · approx 15 %
  • State · equalisation & state grants · approx 55 %
  • EU · regional support & funds · approx 10 %

The state draws the big flows through taxes, equalisation and state grants. The general election decides how much is redistributed and where.

How it works: the breakdown

The municipalityThe last allocation
The regionThe scales of care
Central governmentThe redistributor · centre of gravity
Who decides?
The municipal council (kommunfullmäktige) and the committees.
The regional council (regionfullmäktige) and the health and care committee.
The Riksdag decides the equalisation system, the taxes and the state grants.
What do they decide?
Allocates the budget between schools, care homes and districts, often weighted by socioeconomic needs.
Allocates the money for care between hospitals, health centres and psychiatry, and reimburses care providers per registered patient.
Income equalisation lifts municipalities with a weak tax base, cost equalisation compensates for geography and demographics.
Where are decisions made?
In the budget and in resource allocation models, official documents.
In the region's budget and reimbursement models.
In the Riksdag, after inquiries and rounds of referral (remiss). Statskontoret monitors the system.
Who pays?
Municipal tax, equalisation and state grants.
Regional tax and state grants.
Mainly the state, plus a smaller redistribution between the municipalities.
Fastest way in?
Municipal election The municipal election governs whether resources are weighted by need or allocated equally.
Regional election The regional election decides the balance between town and countryside, emergency care and care close to home.
General election The general election governs the size of the redistribution. Inquiries go out for open referral (remiss).
EUThe EU redistributes through the Regional and Social Funds, which co-finance projects in Swedish regions. Shaped 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 Money on the road between municipalities
  1. State

    Different conditions, the same mandate

    Every municipality must manage school and care, but the residents' incomes and the cost levels differ enormously between city, suburb and sparsely populated areas. Without redistribution the service would drift apart.

  2. State

    The Riksdag decides the system

    The municipal economic equalisation has two main parts: income equalisation that lifts municipalities with a weak tax base, and cost equalisation for factors the municipalities cannot control.

    Point of influence

    When the equalisation is reviewed, the proposals go out for open referral (remiss), and the debate is open for everyone to take part in.

  3. State

    The numbers govern the kronor

    The calculation is built on statistics about population, incomes and needs. Each municipality is told each year what it pays in or receives.

  4. Municipality

    The council allocates it further

    The municipality draws up its budget with equalisation and state grants included. Many municipalities then weight the money between schools and districts by need, using a resource allocation model of their own.

    Point of influence

    The resource allocation model is a political decision in your municipality. It can be requested, examined and questioned.

  5. Region

    Care weights it too

    The region allocates the money for care by the population's age and care needs, and reimburses health centres per registered patient, often with extra weight for heavier needs.

  6. Your everyday life

    The village school stays open

    That the school in the sparsely populated area is still there and the health centre is open depends not only on the municipality's own coffers, but on an invisible flow of money through the whole country.

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. Does your municipality pay into the equalisation or receive from it, and does the answer matter to you?

  2. Is it fair for a well-run municipality to share with one that has problems, and how do you tell bad luck from mismanagement?

  3. Should money for schools be allocated equally per pupil or by the pupils' needs?

  4. How large a difference between municipalities is acceptable in a country with shared welfare promises?

  5. Which resource besides money ought to be distributed more evenly across the country?

Glossary

Skattekraft
The residents' combined taxable income per resident, the measure of a municipality's own economic strength.
Inkomstutjämning
The part of the equalisation that lifts municipalities and regions with a weak tax base towards the national level.
Kostnadsutjämning
Redistribution based on factors the municipalities cannot influence, such as age structure and geography.
Riktat statsbidrag
State money earmarked for a particular purpose, as opposed to general grants.
Resursfördelningsmodell
The municipality's own formula for how the money is weighted between schools and activities.

Go further

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.