One obvious explanation of why a given political approach works in some countries and not in others, is “culture”. In New Zealand in the early 1970’s, a Commission was set up under a Justice Thaddeus McCarthy to examine Sweden’s system of welfare benefits for solo mothers. Justice McCarthy concluded that there was no evidence that it acted as a perverse incentive. So New Zealand introduced a similar benefit, and within a single 3-year electoral cycle came a crisis of births of fatherless children en mass, to the extent that a significant proportion of below-30-y.o. women had chosen solo motherhood. So it wasn’t a perverse incentive in Sweden, at least at that time, probably due to a strong culture of personal responsibility based on Lutheranism; but it certainly was a perverse incentive in New Zealand! An electoral backlash was swift.
“Culture” alone could explain very similar political approaches having Swedish outcomes on the one hand, and Venezuelan ones on the other. It can also be argued that Scandinavian nations have been on a slippery slope to fiscal unsustainability regardless of a stronger cultural starting point. Immigration and the quality of immigrants and the strength or otherwise of assimilation to local culture, will also be a major factor.
