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Denmark is consistently among the countries with the happiest and most satisfied populations, and it regularly places at the very top with the rest of the Nordic countries in international surveys. Why do the Nordic countries as a whole constitute the happiest region in the world? 

Many experts attribute the region's high levels of happiness to factors such as greater relative national wealth and well-functioning institutions. Yet, a number of other countries in Europe and parts of Asia share those qualities and rank far lower in life satisfaction. Others credit the region's high levels of happiness to its welfare state model, but these have changed considerably over time—and Iceland does not share this feature. 

Instead, economist Christian Bjørnskov argues that the most important factor to come out of international comparisons is the importance of social trust—the ability to trust other people one does not know personally. The populations in three of the five countries are also characterized by a very strong sense of personal freedom. These two key factors contribute to a fuller and richer life. Bjørnskov ends by discussing to what extent these factors can be exported to other parts of the world. 

Study after study has shown that Scandinavia is the most trusting region in the world. Danes in particular trust other people and organizations—including strangers, businesses, governments, law enforcement, and media—more than the citizens of any other country. And countries with deep pools of social trust are populated by individuals who cooperate with each other in ways that allow public and private institutions to function more efficiently and cheaply.

Is the Nordic countries’ high level of social trust just as important for creating prosperity and happiness within a population as other, more tangible economic factors? If so, where does this stock of social trust in Scandinavia come from? Does it help to explain the development of the universal welfare states and their surprisingly high business competitiveness? Can other nations learn from the region and apply that knowledge to settings where social trust levels are low or in danger of being eroded?

Social trust has proven economic value, and Gert Tinggaard Svendsen warns that its benefits should never be taken for granted. Trust can dissolve and vanish quickly, and once gone, it is very difficult to rebuild. Governments and corporations are gradually increasing their control over people’s public and private lives, with predictably worrying results. When people feel taken advantage of or lied to, public confidence evaporates. Since strong social cohesion drives long-term prosperity, Nordic exceptionalism on maintaining and restoring trust offers valuable lessons.