Sweden is often held up as a model for other western democracies to follow. Its fans point to a modern economy, rich with high-tech industry. They admire her cosmopolitan society and cradle-to-grave welfare programs.

It's often pointed out that Sweden has one the highest standard of living in the world. The British newspaper The Guardian recently said Sweden had the greatest society the world has ever known.

The Swedes have enjoyed enormous economic success despite having the highest taxes in the world.

But are things really as rosy as they seem If the most recent election results are any indication there is a lot more discord in Sweden than we think.

In recent weeks, Swedish voters turfed the ruling Social Democratic Party - which has ruled for 64 of the past 75 years. Observers say the economy helped drive the social democrats from power.

The problem in Sweden, and perhaps Scandinavia as a whole, is economic stagnation. The Economist magazine says Sweden's best days are behind her. In 1970, Sweden was the fourth richest country in the Organization for Economic Co-operation and Development (OECD). By 1998, Sweden had dropped to 16th.

Sweden's youth unemployment rate is among the highest in Europe, and Sweden has created almost no new (net) private sector jobs since 1950. Elaborate government welfare programs have contributed to the problem Laid off workers are entitled to three years at 80 per cent of their previous salary. Sickness benefits for workers account for 16 per cent of public expenditures.

In other words, it pays to get sick or lose your job.

Making matters worse, there is too much government. Fully thirty per cent of the Swedish work force is employed by government.

The Swedish experience bears some striking similarities to Saskatchewan - particularly when it comes to public sector employment and a lack of private sector employment. There are approximately 115,000 civil servants in Saskatchewan working for various levels of government. With 491,000 people working in Saskatchewan, it's safe to assume one in five works for the government. Saskatchewan's public sector employment rate is well above Alberta's and the Canadian average.

Government is like a wet blanket smothering the economy. With a vast array of crowns and government subsidies, private sector investment is actively discouraged by the government and the results are plain to see. Between 1982 and 2000, Saskatchewan's per capita net business investment was just 39 per cent of the Canadian average. Since 2000 GDP growth has been healthy - largely due to oil and gas development.

For inspiration, Saskatchewan should not look to old Europe as a model because, in many ways, it's like looking in a mirror. Some of the same policies that have dampened Scandinavian economies are doing the same thing to Saskatchewan.

Saskatchewan needs to think big. Instead of subsidizing pork plants and pulp mills, the province should create an environment that fosters innovation and creativity. Start by cutting by cutting taxes, regulations and reining in the crowns.