FRANKLY, THE SCANDINAVIAN MODEL ISN’T DOING ALL THAT WELL IN SCANDINAVIA: Megan McArdle: U.S. Can’t Import the Scandinavian Model.

There’s reason to think that the Scandinavians may be able to pair their high levels of government spending with a decent growth rate precisely because the U.S. does not follow their lead.

Let me explain. In the simplest terms, economic growth is population growth, plus productivity growth. How do nations get more productive? Well, one way is to find a lot of lucrative fossil fuel deposits in the North Sea. But let’s accept that this is not going to be a widespread ticket to prosperity. Most of the way we get more productive is to innovate in some way (and indeed, the technology that discovered and recovered the Norwegian oil is itself an innovation.)

Where does innovation mostly come from? Daron Acemoglu, James Robinson and Thierry Verdier, the academics whom Drezner cites, argue that it disproportionately comes from economies where “incentives for workers and entrepreneurs results in greater inequality and greater poverty” . . . i.e., the United States. Those innovations, however, don’t make just us more productive; they filter out to the rest of the world.

Now, you can quarrel with the academics’ model, and indeed, many people have. But even if you think they are wrong about needing inequality-producing incentives to drive innovation, there remains a kernel of truth: When it comes to growth, Scandinavia’s economic policy simply doesn’t matter as much as U.S. economic policy, so it’s hard to draw good lessons from it for other, larger countries.

True.