A military power during the 17th century, Sweden has not participated in any war in almost two centuries. An armed neutrality was preserved in both World Wars. Sweden’s long-successful economic formula of a capitalist system interlarded with substantial welfare elements has recently been undermined by high unemployment, rising maintenance costs, and a declining position in world markets. Questions regarding the benefit of remaining a monarchy have also plagued Sweden. The royal family is still strongly supported, and has worked closely with the Social Democrats to change the state of Sweden;s economic factors.

Indecision over the country’s role in the political and economic integration of Europe caused Sweden not to join the EU until 1995, and to forgo the introduction of the euro in 1999. During the 20th century, Sweden developed into a modern welfare state. This was made possible by a favorable political and economic development in the Nordic countries.
Since the late 19th century, the Nordic countries developed from agrarian societies to fully industrialized societies. Parallel with economic development, democratic institutions and parlimentarism were introduced. In 1865, the Diet of the Four Estates was replaced with a 2-chamber parliament. The elections took place through universal elections, in which only members of a certain economic elite had the right to vote. In 1907 a voting reform was signed and the universal right to vote gained legal force, but only for men. Women were not allowed to vote until 1921.

The "Swedish Model" was put into place in 1932 by the Social Democrats because of the high unemployment rate. The unemployed were provided with meaningful jobs by the State. This would vitalize the economy and create new jobs by the State. This of course heavily increased the taxes. In the 70's the economic growth for Sweden was reduced. The Social Democratic government began to borr…