This Sunday one of Europe’s longest-serving governments will be fighting for a fourth term as Sweden goes to the polls. The Social Democrats, in power since 1994, are facing a strong challenge from an alliance of centrist and centre-right parties, called the “Alliance for Sweden”.

The Social Democrats have dominated Swedish politics since the 1930s, but for the last two terms they have depended on support from the Greens and the Left party (former communists) for their majority. No-one gives them much chance of winning an absolute majority this time either, and the Greens have indicated that in future they will demand ministerial positions in return for their support.

Support for the major groups has fluctuated during the campaign (see the summary of opinion polls in Wikipedia), but the opposition seems to have a slight edge. After a year of cliffhanger elections around the world, it will be no surprise if Sweden goes right down to the wire as well. Social Democrat prime minister Göran Persson has indicated that he might try to detach some parties from the opposition alliance if the result is indecisive.

Despite its reputation as a socialist utopia or dystopia (depending on whom you listen to), Sweden in the last decade has faced much the same challenges and responded with much the same economic economic reforms as most other Western countries. Welfare has been reformed and many government enterprises privatised, although taxes remain high even by European standards.

The truth is that Sweden was never especially socialist in the traditional sense of government ownership and control of the economy: a comprehensive welfare system coexisted with a largely market-based economy. That model is not dead, but under strain it is changing, and no doubt will continue to do so whatever Sunday’s result.