Why No Nonprofits? State,Market,and the Strive for Universalism in Swedish Elder Care

Introduction

There are wide international differences with regard to the role played by nonprofit actors in the welfare area. In many continental European countries, nonprofit organizations serve as important complements to the state, offering services that are not available through the public sector, or which have alternative value orientations. In countries like the United States or United Kingdom, nonprofit organizations play an important role as contracting partners to the state, more resembling market-based firms (Bode, 2006; Evers & Laville, 2004; Salamon & Anheier, 1998). The Scandinavian region differs from both these models in that the nonprofit sector has long had a highly marginal role in the provision of welfare services. Instead, social services have been provided foremost by the state (Kendall & Anheier, 2001; Klausen & Selle, 1996; Lin, 2004; Matthies, 2006).

During the 1990s, rules for nonprofit organizations were altered in many countries. Inspired by new ideas about public management (NPM), policy makers began to strive for more market-like and transparent forms of delegation, leading to a tendency of formalizing contracts between governments and nonprofit organizations. In the Scandinavian countries, the introduction of NPM policies led to an opening up of the previously public systems of welfare service delivery to private actors (Blomqvist, 2004; Green-Pedersen, 2002; Petersen & Hjelmar, 2014). So far, however, the privatization of service provision that has taken place in the welfare area has led to an increase foremost in for-profit actors, leaving the nonprofit sector even more marginalized than before (Lin, 2004; Sivesind, 2017). This is a paradoxical development, given the previously skeptical view of market forces in the Scandinavian welfare systems (Esping-Andersen, 1990). The most “extreme” case among the Nordic countries, when it comes to the role of the nonprofit sector in the welfare area, is Sweden. While the share of the nonprofit welfare sector varies between 8% (Norway) and 15% (Denmark) in the rest of the region, it is estimated to be only about 2% to 3% in Sweden (Sivesind, 2017; Swedish Agency for Economic and Regional Growth, 2012). One welfare area where the weakness of the nonprofit sector in Sweden is particularly noticeable is elder care, a policy area where nonprofit organizations play a central role in many other countries (Evers & Laville, 2004; Kendall & Knapp, 2000).

In this article, we pose the question why nonprofit organizations have been so scarce in Swedish elder care, despite recent privatization policies and improved availability of public funding. Using a historical approach, we draw on historical public records, previous research, and contemporary data from government agencies to shed light on the development of the nonprofit sector and how it has been affected by public policies since the Middle ages. The main finding in the article is that the explanation for the insignificant role of nonprofits in elder care should be sought in a combination of the historical development of the nonprofit sector in Sweden and recent governance models, with their orientation toward competitive contracting. In particular, we show that the political strive for universal elder care services in the postwar period led to a rapid expansion of public services, which effectively reduced the demand for private and voluntary activities. This resulted in that when the elder care system opened up to private providers again in the 1990s, it was foremost commercial firms, with their more sizable and professionalized organizations, that could seize on the opportunity to establish themselves as alternative care providers.

The findings in the article shed new light on the Scandinavian exceptionalism with regard to the nonprofit sector in welfare services. They indicate that it was not just the size of the public sector that proved detrimental to its growth, as has been suggested by earlier research (Lundström & Svedberg, 2003; Salamon & Anheier, 1998), but its orientation toward universalism which in the Scandinavian context came to imply that services should be standardized and professionalized (Dahl & Rasmussen, 2012; Rostgaard & Lehto, 2001). By providing insight into the specific causal mechanisms behind the continued small size of the nonprofit sector in Scandinavia, which thus can be understood as resulting from a combination of historical and contemporary political choices, the article complements previous theorizing about the impact of welfare state institutions in shaping this sector.

Why Does the Size of the Nonprofit Sector Differ So Much Between Countries?

The recent transformations of social service delivery in many Western countries has led to a renewed interest in the role of the nonprofit sector in this area (Evans, Richmond, & Shields, 2005; Hogg & Baines, 2011; Kendall, 2010). At the same time, the conditions for its participation in providing social support are changing. The entrance of new private actors, such as commercial firms, and the creation of competitive markets for care services have led to nonprofit organizations coming under increasing pressure to adapt to more market-like conditions, both financially and in terms of management. At the same time, relations with public agencies have tended to become formalized, for instance, through the replacement of trust-based relationships with regular contracts and the introduction of new systems of quality assessments (Anheier, 2009; Evans et al., 2005; Smith, 2010). The interest in the nonprofit sector can also be understood from the perspective that it offers what to many may seem an appealing “third way” between the state and the market in the area of social care; more innovative and flexible than public bureaucracies, but not driven by profit motives, which may create strong incentives to cut costs by reducing quality (Van Slyke, 2007).

Efforts to theorize what has become known as the new social care “mix,” where public, market-based, and nonprofit actors co-exist and even compete to provide services, have often highlighted how this differs between countries, depending on the relative size and organization of the three sectors (Bode, 2006; Kendall, Knapp, & Forder, 2006; Salamon & Anheier, 1998). Why, then, do the nonprofit sectors look different in different countries? Why do some countries rely heavily on it for the provision of welfare services while in others it hardly exists? At least three types of explanations for variations in role and composition of the nonprofit sector between Western countries have been offered in the literature. The first centers on the idea that there is a public demand for nonprofit activity. Drawing on the concepts of state and market failure, the basic idea is that a nonprofit sector will develop where there is a demand for services that neither the state nor the market can meet. Examples of such demands are services catering to the needs of cultural or religious subgroups, or groups with distinct preferences or value orientations or ethnic origin (Hansmann, 1987; Weisbrod, 1977). Salamon and Anheier show that there is weak statistical support for the proposition that size of the nonprofit sector in a country is related to its ethno-linguistic diversity (Anheier & Salamon, 2006; Salamon & Anheier, 1998). Others have argued that the demand theory is too consumerist in orientation, failing to take into account the historical and institutional context in which voluntary or charity-based activities have developed (Evers & Laville, 2004; Evers & Svetlik, 1993). A second type of explanation for the varying size of the nonprofit sector focuses instead on the supply of nonprofit alternatives. Such explanations have often focused on the role of religious organizations in different societies and the degree of competition between them. The argument is that religious pluralism leads to a larger and more active nonprofit sector as this becomes a way for such organizations to compete for members (James, 1987). As critics have pointed out, however, empirical data point to the reality being more complex, as some welfare sectors conform to this pattern while others do not (Anheier & Salamon, 2006). Another argument that has been voiced against supply-oriented explanations is that they overstate the role of religious interests, failing to recognize that in some countries it has been other kinds of organizations such as philanthropic societies, popular movements (for instance temperance movements), or unions that have been most active in providing social support or services on a nonprofit basis (Evers & Laville, 2004; Wijkström, 2004).

A third type of explanation for the varying size and composition of the nonprofit sector stresses instead the role of national welfare systems and their social origins. Drawing on Esping-Andersen’s well-known trilogy of welfare regimes (Esping-Andersen, 1990) such explanations point to the importance of class relations and the role of the state during the formation of modern welfare systems for understanding why the nonprofit sector has come to play such different roles in Western societies (Lundström & Svedberg, 2003; Salamon & Anheier, 1998; Salamon & Solowski, 2002). The argument is that in liberal welfare states, such as the United States and United Kingdom, the strength of the merchant middle classes led to a limited role for the state and a preference for private charities as providers of welfare services to the poor, while in conservative welfare systems found on the European continent, the dominant type of nonprofit organizations were the protestant and catholic churches, which, supported by the landed aristocracy, aided the state in creating stratified welfare systems intended to uphold social differences. In the social democratic welfare systems in Scandinavia, in contrast, strong labor movements raised demands for expansive public welfare systems which eventually made all private actors in the welfare area redundant, including nonprofit organizations. Instead, nonprofit organizations came to expand in other sectors, such as sports and recreational activities (Lundström & Svedberg, 2003). The social origins theory (Salamon & Anheier, 1998) thus builds on the development of state–society relations over time, rather than economistic concepts like demand or supply of nonprofit activity. It places emphasis on political decisions and the manner in which these became institutionalized through the historical development of welfare states, which in turn came to shape conditions for the role of the third sector. While such explanations have received increasing attention, particularly in Europe, they typically fail to incorporate the developments of the last 20 years, when welfare systems have been exposed to new challenges and relations between public and private actors have changed, often in a way that makes distinctions between welfare state types less prominent. For instance, all types of welfare systems have experienced an increase in commercially oriented actors within the social care area while new forms of contracting arrangements between governments and nonprofit organizations have become more common (Bode, 2006; Kendall et al., 2006). At the same time, in some areas, like elder care, governments in conservative and liberal type welfare systems have shown a willingness to increase public investments and assert a higher level of public regulatory control (Pavolini & Guillén, 2013). These developments point to a tendency toward marketization as well as increased public involvement in all three types of welfare systems, making conditions for nonprofits more alike than previously. The question that emerges, then, is how these contemporary shifts in the relation between states and the nonprofit sector have played out in different welfare state contexts and how the differing historical roles of nonprofit organizations have affected their ability to orient themselves in the new institutional landscape in which they find themselves today.

In sum, it is apparent that no single explanation provides a fully satisfactory answer to why the role of the nonprofit sector varies between countries or what determines its development over time. We see welfare state-oriented explanations as the most promising route forward to understand the Swedish and Scandinavian developments, but suggest that there is a need to better integrate historical institutionalist explanations with recent developments in public governance to understand what drives the current development of the nonprofit sector in this region. Theories based on so-called historical institutionalism have provided a fruitful way to understand why policies and political developments tend to follow distinct “paths” in different countries (Hall & Taylor, 1996; Steinmo, Thelen, & Longstreth, 1992). Furthermore, it has been argued that institutions may change not just from sudden rupture and upheaval but from gradual adjustment through “layers” of new policies being added to previous ones. Theorists of institutional change have called for more in-depth case studies to identify the specific processes through which “old” layers of institutions interact with new ones, generating often unintended policy outcomes (Streeck & Thelen, 2005). In the rest of the article, we turn to the case of elder care in Sweden to investigate why nonprofit organizations have continued to be so marginalized in this area. Drawing on historical institutionalist theory in general and the social origins theory in particular, we will pay specific attention to the way in which past political decisions by class-based actors became institutionalized and how this have affected the role of nonprofit organizations.

Swedish Elder Care: From State to Market?

Sweden has a comprehensive public elderly care system covering all elderly citizens. The system is publicly financed through local income tax and services are for the most part provided directly by the public sector in the form of local government, the so-called municipalities (Erlandsson, Storm, Stranz, Szebehely, & Trydegård, 2013). Two main forms of care services are provided: home-based care and residential care. Home-based care services comprise a variety of services, ranging from domestic work such as laundry and cleaning to personal care. Residential care is provided to elderly with high nursing needs who cannot manage to live in their own homes even with home-based services. Access to care services is determined on the basis of personal need, which is assessed in each individual case by municipal social workers. In 2016, approximately 13% of all elderly people over 80 years of age lived in residential homes and 23% had home-based care (The National Board of Health and Welfare, 2017a).

The organization of Swedish elder care has changed in recent decades. To cope with the rapid increase in the expenditure in the 1970s and 1980s, but also as a response to criticisms regarding the quality of the services and the passive role of elderly care-takers, many municipalities introduced in the 1990s more market-based forms of service provision (Erlandsson et al., 2013; Trydegård, 2000). It was hoped the policy measures such as free choice of care provider, competition between public and private care providers, and a more diverse provider “market” would increase economic efficiency in care provision and raise quality standards (Blomqvist, 2004; Moberg, Blomqvist, & Winblad, 2016). Following a legal change in 1991, it became possible for the municipalities to contract out service delivery to private organizations, including for-profit companies. Prior to this, private alternatives in Swedish elder care were very rare, corresponding to about 2% of total services (Meagher & Szebehely, 2013). In 2009, another legal reform paved the way for so-called choice systems in elder care, which allows all private actors which have been approved by a municipality to compete for the custom of elderly users, who can choose freely among them. The private organizations are thereafter reimbursed for the work on the same conditions as public providers. A prominent motive behind the reform was to empower the elderly users of services by offering them a free choice between competing providers (Moberg et al., 2016). Taken together, the reforms in the elder care area during the 1990s and 2000s have led to the system being much more open to private actors. In 2016, 20.1% of the elderly who lived in nursing homes and 17.8% of the elderly with home-based care had a private provider (The National Board of Health and Welfare, 2017b).

Contrary to the intentions behind the privatization policies, where a prominent goal was to create more diversity, the private sector in the elder care area has come to be dominated by a small group of for-profit companies with fairly standardized service provision (Erlandsson et al., 2013; Szebehely, 2011). Employee cooperatives and other types of nonprofit actors have continued to be scarce, despite indications that many wish to expand (Blomqvist, Mankell, & Winblad, 2014; Gens & Wånell, 2017). In 2015, about 88% of all private employees in the residential elder care sector were employed in for-profit nursing homes. Of these, stock corporations were the dominating organizational form at 98.5% (Data from Statistics Sweden, 2016, own calculations). Moreover, there has been a tendency toward monopolization of the elderly care market. In 2015, four large companies, all of which were owned by international private equity capital companies, dominated as they together had about 50% of the private market share (Vårdföretagarna, 2015). As of 2016, all but one of the private equity companies active in Swedish elder care are listed on the stock exchange.

A recent study looked into what characterizes nonprofit elder care providers in Sweden (Gens & Wånell, 2017). Apart from not distributing profits to shareholders but reinvesting revenues, they all share some general features. First, nonprofits often have a more explicit value-base, such as person-centered or salutogenic care. A second feature is their specific mission of furthering a particular social or religious goal. Several of the nonprofit residential homes in Gothenburg and Stockholm have, for instance, a clear Christian profile. In home-based services, profiles of this kind are less common. A third distinctive feature of nonprofits in Swedish elder care is their explicit strive for higher quality levels, for instance through higher staff density (Gens & Wånell, 2017). Studies measuring quality in Swedish elder care do not indicate, however, any significant quality differences between nonprofit and for-profit providers (Winblad, Blomqvist, & Karlsson, 2017). Finally, it should be noted that nonprofit organizations, being so few in number, are highly unevenly distributed across the country and in effect very rare outside the larger cities. In home-based services, there were only five organizations active outside Stockholm in 2010.

It is apparent that nonprofit associations have had difficulty establishing themselves and increasing their share in the growing sector of privately provided (but publicly funded) elder care in Sweden. Between 1993 and 2015, employment in the nonprofit nursing home sector increased very marginally from 1.2% to 2.4%, while the for-profit sector grew dramatically from 0.5% to 15.9% (data from Statistics Sweden, 2016, own calculations). In the home care sector, nonprofit organizations have fared even worse as their share has declined in total numbers. Even though the home care sector in Sweden changed dramatically over the past 15 years with a threefold increase in private employment, employment in nonprofit establishments has decreased from about 400 employees in 2003, to about 50 employees in 2015. Today, approximately 0.4% of those employed in the private home care sector work at nonprofit establishments. This development, which indicates that the nonprofit sector as a whole has remained more or less constant at about 2% of the total share of employees in Swedish elder care, points to few new nonprofit actors entering this area after 1992, despite this being one of the intentions behind the privatization reforms (Swedish Agency for Economic and Regional Growth, 2012). In more recent years, both Right- and Left-wing governments have expressed that the role of nonprofit actors should increase in the welfare area (Public Commission 2016:78, n.d.; Skr. 2008/09:207, 2008).

The inability of the nonprofit sector to assert itself and increase its role in the elder care and other social service sectors has been explained by several factors. The most important explanation is related to the regulatory conditions created by the privatization and marketization policies pursued after 1992. In 1994, a new Swedish Public Procurement Law (SFS 2016:1145, n.d., Lagen om offentlig upphandling), based on European competition law, was introduced. The Procurement law, which was revised in 1998, 2007, and 2016, stipulates that all public contracting decisions must be preceded by a competitive process of closed bidding open to all. In practice, it has become apparent that its application has favored large, for-profit firms over smaller nonprofit ones in competitive tendering processes. The law stipulates that when a municipality chooses another bid than the lowest priced one, it must be able to clearly demonstrate in what way this bid is qualitatively better than the other bids. This has led to most municipalities choosing the lowest bid in tendering processes and price has become the single most important factor when private tenders are selected by the municipalities, a development that has favored big firms with greater ability to offer lower prices (Grosse, 2013; Swedish Agency for Economic and Regional Growth, 2012). Moreover, due to the large transaction costs involved in the procurement process, the municipalities have sometimes, in an effort to make the process more efficient, chosen to contract out several elder care homes at the same time, a tendency which favors large providers capable of operating several homes in the same location. The weaker financial situation of nonprofits compared with for-profit firms has also led to an inability on part of the former to invest in new facilities and thereby break the vicious circle of small scale and financial vulnerability (Palmås, 2008, 2013). In addition, it has been shown that it is hard for many nonprofit organizations to formulate competitive bids, even when price is not a main factor. This can in part be explained by the general difficulty of defining what good quality consists of in elder care, which means that bids must be creative and persuasive to demonstrate, in and of themselves, a high quality of services offered. This, too, gives an advantage to bigger firms, who have professional organizations producing the bids and their own quality assurance programs to refer to. The nonprofit organizations often lack both the skills and experience for this kind of work, leading to a tendency of less competitive bids (Blomqvist et al., 2014).

To summarize, we have seen that the Swedish elder care system has undergone a transformation in recent decades where private actors have established themselves as alternatives to publicly provided services. This has led to an increase mainly in for-profit care providers, while nonprofits have continued to play a marginal role in Swedish elder care. This development appears to be related to financial as well as organizational weaknesses of nonprofit organizations. In the following two sections, we look into the historical development of the nonprofit sector in the area of elder care to try to understand the origins of these weaknesses.

Historical Legacies of Elder Care Provision in Sweden: The Active State

In the Middle Ages, the Catholic Church was a significant social service provider in Sweden as well as in many other European countries. Although the family was the dominating caregiver, the Church was active in providing various forms of care and poor relief to needy sick and elderly. The Reformation in the 16th century radically changed these conditions, as it was used by King Gustavus Vasa (1496-1560) as an opportunity to crush the Church and seize its vast property. Within the course of decades, Vasa managed to dramatically reduce the Church’s political and economic position (Gustafsson, 1987). A new Lutheran Church law in 1571 stated that all property and institutions of the Church should be taken over by the Crown. This law, which also stated all cities ought to have a hospital and each parish a smaller cottage hospital (sjukstuga), is regarded as a first formal attempt by the state to regulate institutional care in Sweden (Gustafsson, 1987). Following the consolidation of the Swedish state under Vasa and his dynasty in the 16th century, the role of the Church as a social provider diminished radically. This is manifested not least in the fact that the parishes gradually began to take on a new role as local branches of the state (Anderson, 2009). During the next centuries, they became more actively involved in the organizing of the poor relief. New poor legislation introduced in 1642 by Queen Kristina stated that persons unable to care for themselves should be taken into so-called poorhouses set up by the parishes. This implied that the parishes were legally mandated to take care of socially marginalized persons, of which poor elderly were a significant group. Another law in 1763 stated explicitly that the public poorhouses had an obligation to take in elderly with no other means of support (Odén, Svanborg, & Tornstam, 1993). In this way, a legacy of state intervention and local government responsibility to cater to the needs of the poor elderly was created early on in Sweden.

The industrialization of Sweden in the 19th century led to a difficult situation for many elderly as young people moved to the cities and left old parents behind in the countryside. Several crop failures in the 1860s in combination with a still inefficiently organized poor relief in the villages made the situation worse. Elderly with economic resources could hire domestic help or buy lodging and care in private establishments, but this was an option for the very few as the market for private care accommodations was underdeveloped in Sweden and most lacked the resources for such options. The charity organizations that offered housing to elderly, such as pious foundations or churches, were too scarce to meet the vast needs. As a result, the problem of poverty and social marginalization among the elderly became an increasing public concern in Sweden in the early 20th century. In 1913, a pension reform was launched by liberals within the parliament with the explicit purpose of addressing the situation of the poor elderly. In what has been described as the world’s first comprehensive pension reform, the 1913 Pension Reform Act guaranteed a small basic pension to all citizens regardless of paid contributions (Edebalk, 2000). With this reform, the immediate problem of poverty among the poor elderly was solved, at least in principle; what remained, however, was the problem of care.

This question was addressed in the 1918 Poverty Act, where, for the first time, the elderly were explicitly defined as a separate group with specific care needs. In the act, the idea of old people’s homes (ålderdomshem) was launched. These homes, which were to be provided by the municipalities, should be reserved for the elderly exclusively and provide housing, basic forms of care and supervision by authorized staff (Johansson, 2006). The idea behind the novel concept of old people’s homes, which came to be one of the cornerstones of modern Swedish elderly care policy, had been first launched by a private charity organization, the influential CSA, the Central Association for Social Work (Centralförbundet för Socialt Arbete). Established in 1903, CSA was a philanthropic organization with a mission to help the poor. Even if many of its members were active in voluntary social work, the CSA became a powerful advocate for increased public involvement in poverty relief. The CSA leadership believed that homes for the elderly needed to be introduced on a wider scale than their own organizations could provide and become available for all impoverished elderly (Ohrlander, 1992). This position may also have been influenced by the fact that the organization subscribed to a German philosophy known as the Ehrenamt model, where a leading idea was that philanthropic work should be voluntary in character and not carried out by employed staff (Anheier & Salamon, 1999; Qvarsell, 1993).

To summarize, the Swedish state became involved early on in providing economic assistance and housing to poor elderly. When the needs of this group increased in late 19th and early 20th centuries, it was seen as natural, even to private charity organizations in the area, that it should be the state that should extend its support. As we will see in the next section, this legacy paved way for policy developments after the Second World War, when social democratic reformers went far beyond poor relief in their mission to create a modern elder care system.

The Creation of the Modern Elder Care System After 1940

Despite the growth in old people’s homes in the municipalities in the early 20th century, the situation for poor and frail elderly in Sweden was still precarious by the end of the Second World War. Municipal homes for the elderly offered shelter for those without relatives or much income, while the better-off sought private alternatives like boarding houses and hired home help but many fell between the cracks in this highly stratified system. This picture came to change, however. In the postwar years, Swedish elder care was transformed into a comprehensive, all-public system of standardized services for all elderly citizens, a development which made redundant most private forms of elder care, both market-based and charitable. The driving force behind this development was the labor movement and its political wing, the Social Democratic party.

The labor movement had established itself as the dominant political force in Sweden in the 1920s. After gaining office in 1932, the party embarked on a mission to create a modern welfare system which would eliminate poverty, provide social security for the whole population, and transform society in accordance with the party’s egalitarian vision (Lundberg & Åmark, 2010; Olsson, 1990). In 1940, the government started to acknowledge the need for reforms also in the elder care area. It was recognized that the conditions in municipal homes for the elderly were often poor. Actual care services were scarce, sanitary standards low, and facilities crowded. Most problematic, there was a mix of clients, as the homes were open also to the mentally challenged and psychiatrically ill—groups that could not live on their own but were not considered in need of hospital care (Antman, 1996; Public Commission 1940:22, n.d.). Despite these often uninviting conditions, public investigations also noted a tendency for elderly with financial means to seek accommodation to the municipal homes as they could find no other suitable lodging when they could no longer manage themselves. In 1940, this group was estimated to constitute nearly 20% of all lodgers in the municipal old people’s homes (Public Commission 1940:22, n.d.).

In 1946, a public investigatory commission concluded that additional funds must be made available to the municipalities to modernize and expand homes for the elderly to meet the growing demand. Notably, the commission argued that such institutions should also provide care services and that they should be reserved for the elderly. Two other important policy principles which were later endorsed by the Minister of Social Affairs were also formulated: that homes for the elderly should be operated directly by the municipalities and that they should be open to all elderly citizens, not just the poor (Public Commission 1946:52, n.d.). Later, the Minister of Social Affairs also stressed in the legal proposal that the fees paid for care should be low and the same for all residents, regardless of income (Government Bill 1947:243, n.d.). These propositions, which in effect transformed the existing municipal old people’s homes from a poor relief system to a comprehensive one, became the guiding principles for the development of the modern Swedish elder care system. The universalist principle, stating that welfare benefits should cater to the needs of the whole population rather than target those in financial need, was prominent in reforms also in other welfare in Sweden at the time, for instance in social insurance, health care, and primary education (Esping-Andersen & Korpi, 1987; Olsson, 1990), and was guided by the ideological vision of a socially inclusive welfare state, or, in the words of Social Democratic Prime Minister Per Albin Hansson, “A People’s Home” (Folkhem) where all citizens were treated as equals (Lundberg & Åmark, 2010; Rothstein, 1998). In the following decades, a rapid expansion and modernization of residential care for the elderly took place within the municipalities (Antman, 1996; Odén et al., 1993).

The expansion of old people’s homes operated by the municipalities after 1950 made private alternatives increasingly redundant, both in the market and nonprofit sector. Charity-based organizations were, however, active in another area of social work which included the elderly: so-called home help (social hemhjälp). Since the 1920s, the Red Cross and other organizations had visited poor families where the mother had become ill to help with domestic work, a service that was extended to poor and sick elderly. In 1943, the government turned its attention to this issue, as a public commission reported that the existing situation with regard to home help was unsatisfactory. Providing a detailed report on the activities of voluntary organizations in the area, it noted that the demand for such support was much larger than the private organizations could manage and recommended that a public system be put in place (Public Commission 1943:15, n.d.). Unlike the question of residential homes for the elderly, where it had been seen as more or less natural that this should be a matter for the state and municipalities, it was explicitly discussed by the commission on home help who should be responsible for the delivery of this service. It was noted that voluntary organizations were the main providers of such services in many municipalities, often with public financial support. Even so, the Commission recommended that the municipalities should become the main organizers. The reasons stated were the vast need for such services, which was perceived as exceeding the capacity of the private organizations, and the intention by the commission to propose new standards regarding wages and work conditions for the home helpers, which were believed to be impossible to meet by this sector as well:

In the many cases where home help is provided by private organizations, the economic standards of the home carers are . . . lower, too low . . . Naturally it is impossible for these organizations with their limited economic resources to offer the home carers the same employment benefits as those employed in the municipal sector. . . . In order to create the necessary economic foundation for an extended home help service, the Commission therefore finds it necessary that the State itself through suitable institutions steps in as the principal for this activity. (Public Commission 1943:15, n.d., pp. 51-52, authors emphasis)

Underlying the Commission’s reasoning regarding the need for expansion of the home help services and its call for better employment conditions for the workers in this sector was its proposal that this service should be offered to all households in need of it, rather than just those with financial difficulties (Public Commission 1943:15, n.d.).

Home help, which was temporary and intended for housewives rather than the elderly per se, could not, however, meet the full care needs of this group. The need for more extensive home-based services to large groups of older people was highlighted by a critical debate in the early 1950s about how many elderly residents were unhappy in the municipal homes for the elderly, where they had a passive and dull existence. Again, the Red Cross took the lead in spear-heading a new policy solution. The organization started in 1950 to provide regular help to elderly in their homes to help them stay there rather than move to a municipal home. In 1952, the question received political attention as a public commission noted the need for public authorities to provide such services, arguing that the private labor market was unable to meet such demands. The then social minister Gunnar Sträng agreed in a public statement that there was a need for home-based assistance to the elderly to reduce their dependency on residential care, but that such services should be provided “in an orderly manner” and by a working force of “satisfactory quality” (Sträng, 1952, quoted in Antman, 1996, p. 19). During the rest of the decade, home-based assistance especially targeted to the needs of the elderly was developed by the municipalities (Brodin, 2005; Johansson, 2006). In 1960, 1,010 of the country’s 1,036 municipalities provided what became known as home-based care assistance (hemtjänst) to elderly wishing to remain in their home (Edebalk, 1990). In line with the dominant creed of welfare service development in Sweden at the time, the services became universal and offered to all elderly regardless of income (Szebehely, 1995). This led to a development where the role of nonprofit organizations in providing assistance to the elderly diminished rapidly. In 1960, only 7% of the staff employed in home-based assistance had private employers (Antman, 1996).

Why did home-based services, despite the fact that it was charitable organizations that initiated them, also end up as a purely public responsibility in Sweden? Antman points to several explanations: the statist tradition of direct provision of services in residential elder care; the principle that it should be the municipalities, with their higher capacity to regulate standards and ensure the quality of the work force (as expressed in relation to the home help legislation in 1943) that should provide social services; the economic weakness of the voluntary sector and the lack of a strong voice arguing for a continued role for this sector (Antman, 1996). In addition, one can point to the principle of universality, which appears to underpin several of the reasons identified by Antman: because social democratic reformers insisted that elder care services, both residential and home-based, should be available to all elderly as a matter of social right, an immediate increase in the supply of such services was called for, which could only be managed by the state and its local branches. The universality principle would later be legally encoded with regard to both residential care and home-based services for the elderly in the 1956 Social Assistance Act (SFS 1956:2, n.d.).

After the 1960s, municipal systems for delivering services to the frail elderly expanded rapidly in Sweden, aided by national grants to the municipalities. The expansion continued well into the 1980s, when the need for cost containment led many municipalities to reduce spending levels. Private providers of services to the elderly all but disappeared during the postwar period of public expansion, except for a small sector of foremost nonprofit organizations (Grosse, 2013; Meagher & Szebehely, 2013; Szebehely, 1995). Privately financed services were virtually nonexistent and for-profit firms could not receive public funding. As a result, modern Swedish elder care became a virtually all-public affair until the early 1990s, when political attitudes to private alternatives shifted, as described above.

Concluding Discussion

In this article, we have shown that attempts to create more organizational diversity in the elder care sector in Sweden after 1990 by breaking up the public monopoly led to an establishment foremost by commercial firms. Contrary to expectations, the nonprofit sector continued to play a highly marginalized role. The findings in the article indicate that this development is the result of the historical weakness of the nonprofit sector. Already in the 16th century, the Swedish state intervened to ensure social support to the poor elderly. When social democratic reforms set out to modernize the welfare system in the 1940s, there was a legacy of public old people’s homes to build upon as they expanded the system to make it universal. Arguably, the social democratic preference for universal public solutions to social problems during the formative period of the modern elder care system in the following decades played a decisive role in reducing the previous plurality in elder care provision and creating a virtually all-public system with little or no room for nonprofit actors.

We have also seen in the article that the legacy of a marginalized role for nonprofits led to that, when political attitudes shifted in Sweden in the 1990s and nonprofit actors became encouraged to reestablish as care providers, their organizational weakness made it harder to compete with market-based actors. We conclude, therefore, that the early historical legacy of the nonprofit sector in Sweden, together with strive for universalism among social democratic reformers in the post-war era, weakened the nonprofit sector in Sweden so that it was unfit to take advantage of the new opportunities created in conjunction with NPM policies after 1990. As we have seen, the disadvantage of nonprofit organizations in relation to commercial actors appears to be related both to size, organization, and the availability of capital. Experiences from other Scandinavian countries suggest a similar pattern (Sivesind, 2017). This finding points to the fact that it may be hard to recreate a vital nonprofit sector in a policy area once it has disappeared; a lesson that may have a broader relevance in the Scandinavian context where the nonprofit sector remains small in the welfare area. It suggests that if policy makers wish to stimulate the development of this sector, it should perhaps not be exposed to full market competition but be allowed to find its own niche within the welfare system.

On a more general theoretical level, the findings in the article imply that the historical development of welfare states and their institutional trajectories are important in shaping the role of the nonprofit sector in the welfare area. In this sense, the conclusions of the article lend support to the theory of social origins as developed by Salamon and Anheier (1998). Part of the theoretical contribution of the article, however, is to highlight that it is not only historical developments that matter, but the combined effect of these and contemporary policy choices, for instance with regard to competition legislation and the conditions under which nonprofit organizations may obtain public funding (Bode, 2006; Bode & Brandsen, 2014). In the case of social democratic welfare states, the combination of historical and recent institutions, both reflecting class politics, appears especially unfortunate for the third sector. Historically, they were marginalized due to the strong influence of Labor movements and their strive for statist and universal social policies. In the postindustrial period, political powers shifted toward the right, leading to neoliberally flavored social policies oriented toward the creation of markets; a shift which, even though it entailed new opportunities for private actors, exposed the nonprofit to conditions that once again served to marginalize them. In both cases, there has been a lack of strong support for a role of the third sector and perhaps also appreciation of the special characteristics and values it represents. Recent studies from the Nordic countries indicate that this slightly skeptical attitude may still be at play (Frederiksen, 2015; H. Johansson, Arvidson, & Johansson, 2015).