Sweden

Sweden's governance model combines a strong welfare state with a remarkably competitive market economy — a combination that economic theory suggests should be contradictory but that Sweden has sustained for decades. The tax-to-GDP ratio exceeds 40%, funding universal healthcare, education, and generous parental leave, while corporate tax rates remain competitive and the business environment produces disproportionate numbers of global companies (Spotify, IKEA, H&M, Ericsson, Volvo) for a country of 10 million people. Sweden's central bank, the Riksbank, is the world's oldest (founded 1668) and pioneered negative interest rates in 2015. NATO membership in 2024, ending two centuries of non-alignment, represented one of the fastest foreign policy reversals in modern European history — triggered by Russia's invasion of Ukraine. The political system operates through minority governments supported by parliamentary agreements, creating policy stability through negotiation rather than majority power.