INTERNATIONAL POLICY ANALYSIS Welfare – Exposed to Competition and in Need of Reform KATINKA HORT ÅSA-PIA JÄRLIDEN BERGSTRÖM November 2013  After two decades of reforms of the Swedish welfare system to further freedom of choice, competition and increased participation by private-sector interests in the welfare sphere, it is high time to examine the results and discuss the future.  Things have not worked out as intended – the original aims of equality, greater efficiency and better quality have not been achieved. The opposite has happened in central respects – there is evidence of less equality, increased segregation and more selectivity. Market orientation has been introduced in recent decades without suffi­cient consideration of the pros and cons of market solutions, private profit interests, or the necessary control instruments and balances.  The principal idea behind the market which has now been established is that active, well-informed choices by individuals will promote competition and hence further a more effective production of services. There are, however, some clear indications that as consumers of welfare services we perform»unsatisfactorily«, which means that quality may not be enhanced through freedom of choice. Furthermore, many individuals have a limited capacity to make rational, well-informed choices.  The future poses considerable challenges but progress can be achieved by finding pragmatic solutions, adapted to the sector in question, in a continuous process of reform. The future task is to ensure that politicians control the operations so that the objective is not the profit motive but overriding welfare goals.  Reforms are needed to ensure a continuous improvement in the quality of welfare, with a high degree of professionalism, compliance of publicly financed operations with societal objectives, and the efficient utilisation of common resources.