Wednesday, April 6, 2016

What does the Nanny State Index really show?

Institute of Economic Affairs (IEA) along with the European Policy Information Centre published the so called Nanny State Index this week that puts Finland and Sweden in top defining these Nordic countries as the “worst places in the European Union to eat, drink, smoke and vape.”

“The Nanny State Index is concerned with policies that have an adverse impact on consumers. Policies are given different weights to reflect the extent to which consumers are negatively affected, from relatively minor inconveniences to heavy taxes or outright prohibition.” The Index includes any policy that is designed to deter consumption of legal products.

Nanny State Index? Its a list that does´nt just rank countries based on the level of existing regulations but that translates that into being “worst places to eat, drink, smoke...”. Would be interesting to add the overall satisfaction index from these countries. There are some indexes that might give a hint of how local people feel about their countries situation and the way their states are run. The ability to draw these conclusions is of course limited but the same goes with the conclusion that if the country has a retail monopoly (like Finland and Sweden) it must be bad for people. For instance in 2012 71% of Swedes supported the strict monopoly system Systembolaget. And that support has grown from around 50% in the beginning of 2000. In Norway, a non EU country that would definitely top the Nanny State Index, a 2013 TNS Gallup poll showed that 74% of the population wanted to keep the monopoly while only 22% wanted to dissolve it. So one of the aspects that makes alcohol policy very different in Finland and Sweden compared to all other countries is clearly supported by local people.

But lets look at these other indexes as well. And for a comparison lets focus on Finland and Sweden, two countries that are positioned as the top Nanny States and Czech Republic, Slovakia and Portugal, three countries that are ranked as the least Nanny States and should be thus be best places “to eat, drink, smoke and vape”.

How does the ability to do these things affect the level of happiness? According to the World Happiness Report both Nordic countries are in the top 10. Finland on 5th and Sweden in 10th position. Czech Republic is on 27th place, Slovakia on 45th and Portugal 94th. Now of course, happiness is much more than just ability to consume different products. But at least it shows that the strict regulation that Nordic countries have, does´nt ruin that happiness. I should also mention that two other Nordic countries (that are not part of EU) that have even stronger regulations, Iceland and Norway, are placed even higher – 3 and 4 in the World Happiness Report.

Lets also look at the Happy Planet Index (HPI). The HPI measures what matters: the extent to which countries deliver long, happy, sustainable lives for the people that live in them. The Index uses global data on life expectancy, experienced well-being and Ecological Footprint to calculate this. HPI Score for:
Sweden is 46.2 and for Experienced well-being 7.5.
Finland – 42.7 and 7.4.
Czech Republic – 39.4 and 6.2
Slovakia – 40.1 and 6.1
Portugal – 38.7 and 4.9

Then there is The Family Life Index that ranks countries according to their results in these subcategories: availability of childcare and education, costs of childcare and education, quality of education, family well-being, as well as childcare and education options. Services that are mentioned here are directly linked also to the country´s tax policies and can give some light to how the quality of life is influenced by the level of taxes.
In this index Finland ranks nr 2 and Sweden nr 3. Czech Republic, Slovakia and Portugal were not included into that list.

Report STATE OF THE WORLD’S MOTHERS 2015 gives the Mothers Index that shows where mothers and children living in urban areas face the least and the greatest hardships regarding women's and children's health and economic well-being, among other aspects. The world's best countries for mothers to raise children are less of a surprise: Norway, Finland and Iceland. Sweden is on the 5th position. Czech Republic – 25, Slovakia – 34, Portugal 16.

These different indexes place Finland and Sweden among the best or even the very best in the world. The Nanny State Index is no exception, they are on top again but it is translated as being bad. “"Unless you are a teetotal, non-smoking vegetarian, my advice is to go to Germany or the Czech Republic this summer," said the reports author Christopher Snowdon to the Independent. So if you want to have a rowdy vacation, Czech Republic might be a good place for that. But what if you live in that country, you consume lots of alcohol, smoke and eat fast food and you will have lifestyle related health issues, what happens then? How well can the society as a whole manage these problems?

True, Sweden and Finland are not free from alcohol problems. The Nanny State Index even “concluded that countries with heavy alcohol regulation do not have lower rates of drinking.” With countries we have been focusing in here, the correlation does exist. Per capita (15+) consumption in Finland is 11.2 litres and in Sweden as low as 9.4 litres. Czech Republic – 13.0; Slovakia – 13.0; Portugal – 12.9 litres.

To have even clearer understanding on how the “Nanny State” status influences alcohol consumption, we should include Norway and Iceland into that comparison. Per capita consumption in Iceland is 7.06 and in Norway 6.22 litres. On the other hand you may ask why did I choose Czech Republic, Slovakia and Portugal as examples of the “free” societies? Why not focus on Italy for example where the consumption level is similar to Norway but which is in the yellow zone (freer) in the Nanny State Index (still on the 17th position compared to Czech Republic´s 28th)? When we look at individual countries we have to understand the details that are behind different developments. Italy is very different case, which cannot be understood without including the historical and cultural story behind it. Please read closer from here:

Finland on the other hand is another peculiar country where you have to know and understand some important facts to be able to judge the situation correctly. Being a part of Nordic countries with restrictive alcohol policies, Finland does stand out with the highest alcohol consumption compared to other Nordic countries. So why does´nt these regulations work in Finland as well as in Sweden, Norway and Iceland? There is one very clear reason and that is a small southern neighbour, Estonia which has much lower level of regulations including several times lower prices. Finland is unique for being one of the richest countries which in its door step has a faucet where you can get alcohol almost for free. And because of that more alcohol is sold in Estonia per capita than in any other state in the world. Estonia, with its low prices, is a clear obstacle for Finland to effectively implement its alcohol policies.

Nordic countries overall, have, as it is called, the Nordic welfare model, which it builds upon the general organisational principles of Nordic social and welfare policy. “The social security net is central to the Nordic welfare model. It is rooted in the basic principle of universal rights, i.e. everybody has the individual right to assistance from the public sector if they are unable to look after themselves. As a point of departure, these rights are the same for all, regardless of factors such as income and assets. One crucial way in which the Nordic system differs from other welfare models is that rights are not acquired on the basis of previous payments (e.g. national insurance payments) or status (e.g. employment). Welfare is funded collectively via taxation, and the individuals’ rights are not linked to their tax history.” (Nordic Council)

Tax policy and health related policies are closely linked to that Nordic Welfare Model. And that model helps to get Nordic countries in the top of these different indexes stating clearly that it is good to live there.

The Nanny State Index could be useful for bachelor parties which search for a cheap and easy locations to have limitless fun, but it does´nt say anything useful for countries that are struggling with alcohol, smoking and obesity and which have´nt found the political will to do much about it.

Lauri Beekmann

Secretary General of the Nordic Alcohol and Drug Policy Network (NordAN)

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