Scandinavia and Germany
Sune, from the comments, writes:
As a scandinavian I'm surprised by the admiration for Germany.
We often talk of Germany as being a step behind in economic policy with their labor market being so rigid, and the still significant power of unions.
When I first visited West Germany, in 1985, it was arguably the best-functioning social democracy. You could mail a letter for single-day delivery anywhere in the Bundesrepublik, the concept of "deutsche Wertarbeit" was near its peak, Mercedes was the gold standard of automobiles, and the northwest industrial areas had not yet been hollowed out (though they were suffering). The country also had among the world's best systems for mass transit and urban planning, as well a high living standard and lots of vacation time, all topped off by what was arguably the world's most curious, most travel-hungry, and most intellectual population.
Since then, unification cost a lot of money, and delayed progress, but the country hasn't exactly fallen apart. It retains many of these virtues, albeit with some fraying at the edges. What it has gained since 1985 is a greater feeling of normalcy, a stronger identity as European, much better levels of customer service, and the final aging and (mostly) disappearance of a large number of Nazis and Nazi sympathizers. Those who were sixty, and running the country, are now eighty-five and mostly dead or retired. Those are some big gains.
The Nordic countries have in some ways moved ahead. The stunning contemporary architecture of Copenhagen sets the city apart from most of Germany, which now has a somewhat tired-looking infrastructure and a great number of mediocre postwar buildings. Denmark also has made bigger strides toward economic freedom. Sweden has shown it can cut spending, reinvent itself, and circumvent what appeared to be a dire fiscal future; this was not apparent in 1985. Sweden also has done very well by globalization and information technology. Norway has mobilized its oil and gas wealth to greater degree and strengthened its good governance.
Still, either then or now, I'd rather live in Germany, even if it is harder for larger countries to turn on the proverbial dime. The country has dealt with more serious problems, so its performance has been less in absolute terms. But in part it's had more serious problems because it is a more interesting place. Germany is bigger and more diverse than the countries to the north. At the very least I would reject the portrait of Germany as a country which has fallen behind the other major social democracies.