DENMARK

The basic rule is given by Section 30 of the Danish constitution: “Any person who is entitled to vote at Folketing (parliamentary) elections shall be eligible for membership of the Folketing, unless he has been convicted of an act which in the eyes of the public makes him unworthy to be a member of the Folketing.” It is the unicameral People’s Assembly (Folketing) itself which in the end decides whether a conviction makes someone unworthy of membership.
In practice, political parties play an important role in selecting candidates for elections. It is possible to run in an election in a personal capacity, but extremely difficult to be elected that way. Given the relatively high number of political parties it is reasonably easy to become a candidate for a party.
There is also the possibility of forming a new party. New parties have to collect a number of signatures to be able to run, corresponding to 1/175 of the number of votes cast at the last election.

Denmark is a liberal democracy. According to the constitution, section 77, freedom of speech is protected: “Any person shall be at liberty to publish his ideas in print, in writing, and in speech, subject to his being held responsible in a court of law. Censorship and other preventive measures shall never again be introduced.” Freedom of speech includes freedom of the press. According to the Press Freedom Index published in 2009 by Reporters without Borders, Denmark ranked highest in the world in press freedom, together with Finland, Ireland, Norway and Sweden.
The penal code sets three limits to freedom of speech: libel, blasphemy and racism. How far those limits reach is interpreted by independent courts.
The public media (Denmark’s Radio and TV2) have to fulfill in programming the criteria of diversity and fairness. All political parties that plan to take part in elections, whether old or new, large or small have the right to equal programming time on the radio and on television. Private media, mostly newspapers, tend also to be open to all parties and candidates. Newspapers are for instance open to accepting and publishing letters to the editor.
All parties and candidates have equal possibilities of distributing pamphlets and posters. Finances can be a limiting factor, however, with the larger parties having more money for campaigns than smaller parties.

According to section 31 of the Danish constitution, “The members of the Folketing shall be elected by general and direct ballot.” More specific rules are laid down in the election act. The election act stipulates that “franchise for the Folketing is held by every person of Danish nationality, who is above 18 years of age, and permanently resident in the realm, unless such person has been declared legally incompetent.” The rule determining eligibility at 18 years old was introduced in 1978.
The uncertainty created by the election act is related to the question of what it means to be “permanently resident in the realm.” The interpretation used to be rather narrow but has been expanded over time. The act explicitly says that “persons who are employed by the Danish state and ordered to enter service outside the realm, and spouses cohabiting with such persons, shall be considered to be permanently resident in the realm.” The act also gives the following list of persons, who have taken up temporary residence in foreign countries, the right to vote:

• persons working abroad as employees of a Danish public agency or any local private undertaking or association;
• persons living in a foreign country as employees of an international organization of which Denmark is a member;
• persons sent to serve in a foreign country by a Danish relief organization;
• persons living abroad for the purpose of education;
• persons living abroad for health reasons;
• persons living abroad and who, with respect to affiliation with the realm, must be quite co-equal with the persons specified in the first five listed items.

Some of these stipulations are of course open to interpretation. The list does not mention Danes working abroad for private companies. Nor is it specified how long a temporary residence can be. On this Denmark remains more restrictive than many other countries.

Political parties have members that pay membership fees. These fees, however, are inadequate for financing the activities of the parties, including the financing of electoral campaigns. Parties therefore depend on other sources of income. There are basically two other sources: support from other organizations or public support. Traditionally the Social Democratic Party has received support from the labor movement, from various trade unions. The parties on the right of the political spectrum, the Conservative Party and the Liberal Party, have traditionally received support from employers’ organizations. A law enacted in 1990 outlined that such contributions are voluntary, so members of these organizations who do not want their membership fees used to support political parties can opt out.
Public support for political parties is becoming more important. The party groups in the People’s Assembly (Folketing) receive financial support for their legislative work, including staff. Further, the parties receive electoral support. Parties that take participate in parliamentary elections and received at least 1,000 votes in the most recent election have a right to financial support. In 2010, a party was given DKK 27.50 per year, per vote they received in the last election.
There is full transparency about such public support. Concerning private support, the name of contributors donating more than DKK 20,000 should be made public, but the amount donated is not revealed. Smaller amounts are allowed to remain anonymous. It is possible to circumvent publicity by donating below the limit to local branches of political parties.

Press freedom is protected by the Danish constitution, section 77, with certain restrictions concerning libel, blasphemy and racism.
Denmark’s radio and TV2 are governed by independent boards appointed by the culture minister, the People’s Assembly (Folketing) and employees. No MPs are allowed to be board members and legislation endeavors to assure that programs are impartial and diverse. State-run media are financed by an annual license fee, but commercials are increasingly allowed. Private media, especially newspapers, used to have party affiliations, but such affiliations have lessened in recent years. Freedom House describes private media in Denmark as “vibrant.”
Denmark used to score very high on the annual Press Freedom Index, published by Reporters without Borders. But in 2006, Denmark dropped to 19th place, mostly as a result of the fallout following the publication of the cartoon of Muhammad in a Danish newspaper. In 2008 Denmark was in14th place. But in 2009, Denmark rose to first place together with a small group of countries. So during the period under review the independence of media in Denmark has improved quite substantially.

The Danish media market maintains about a dozen national newspapers (including Berlingske Tidende, Politiken, Jyllands-Posten, B.T. and Ekstrabladet) as well as about 40 local newspapers. Most of these private publications tend to trend conservative or liberal in political philosophy. Left-wing views tend to be underrepresented in editorial pages, but in straight news reporting most newspapers tend to deliver fairly wide-ranging and diverse coverage. The main newspapers regularly include letters to the editor that do not reflect the paper’s own views. So in practice, there is a high degree of pluralism of opinions in Danish newspapers. A vibrant civil society contributes to this.
The public media (mostly radio and TV) are independent and have editorial freedom. Satellites and cable TV are increasingly creating more competition for public media.

Denmark passed the Access to Public Administration Files Act in 1985, which replaced a previous act made law in 1964. The act stipulates that “any person may demand that he be apprised of documents received or issued by an administration authority in the course of its activity.” There are exceptions to this framework; the act does not apply to matters of criminal justice, nor does the right of access extend to an authority’s internal case material. Further, the right of access does not apply to five specific sorts of documents, which include: records of meetings of the Council of State, as well as minutes of meetings of ministers, and documents prepared by an authority for use at such meetings; correspondence between ministers, relating to the making of laws, including appropriation bills; documents exchanged in connection with the secretarial function of one authority on behalf of another authority; correspondence between authorities and outside experts for use in court proceedings or in deliberations on possible legal proceedings; and material gathering for the purpose of public statistics or scientific research.

The law previously included European Community documents, but this exemption was removed in 1991.

The law further describes files that “may be subject to limitations,” namely files concerning: state security or the defense of the realm; protection of Danish foreign policy or of Danish external economic interests, including relations with foreign powers or international institutions; prevention and clearing-up of any infringement of the law, prosecution of offenders, execution of sentences and the like, and protection of persons accused, of witnesses or others in matters of criminal or disciplinary prosecution; implementation of public supervision, control, regulation or planning activities, or of measures planned under taxation law; protection of public financial interests, including interests relating to public commercial activities; or protection of private or public interests where secrecy is required because of the special nature of the matter.
This list is obviously rather long. And some of the possibilities to deny access to documents are rather open-ended. The act does stipulate that requests must be dealt with quickly; if no decision has been made within 10 days, authorities have to inform the inquiring party as to why their request is delayed, and when they can expect a decision.

The parliamentary ombudsman can review the decisions by administrative authorities over the disclosure of information. He cannot change decisions but can make recommendations. These recommendations are normally followed by the authorities.

Denmark was not among the 12 European countries that signed the first international convention on access to official documents in Tromsø, Norway, on June 18, 2009. This Council of Europe convention has been criticized for its weaknesses.

Civil rights are protected by the Danish constitution, including personal liberty (article 72), inviolability of property (article 73), inviolability of dwellings (article 72), freedom of speech (article 77), freedom of association and freedom of assembly (article 79).
These freedoms are normally protected by the authorities and courts.
Denmark ratified the European Convention on Human Rights in 1953. Since 1976 Denmark has had a number of cases at the European Court of Human Rights. Denmark lost some cases, especially concerning freedom of association (article 11 in the European Convention) and concerning unnecessarily lengthy case proceedings (article 6 in the European Convention). The latest case lost by Denmark in January 2009 concerned the excessive length of civil proceedings. Thus Denmark could do better when it comes to protection of civil liberties.

The Danish constitution protects the civil and political rights and liberties, including freedom of speech, freedom of association and freedom of assembly. Elections are free. The government is accountable to the elected parliament.

Freedom House 2009 gave Denmark top scores for civil liberties and political rights, but the report did include some critical remarks. These mostly concern ethnic tensions in Denmark, especially involving the country’s Muslim population, and alleged ill-treatment by the police. Some of these situations were exacerbated when leading newspapers reprinted the controversial Muhammad cartoons.

The latest human rights report from Amnesty International is also critical of the behavior of police and security forces in Denmark as well as the treatment of refugees and asylum-seekers. The country’s tight immigration policy, introduced in 2002 after the liberal-conservative government of Anders Fogh Rasmussen came to power in 2001, with the support of the anti-immigration Danish People’s Party, continues to raise concerns. Some asylum seekers in Denmark have been returned to their home countries, contrary to the recommendations of the United Nations High Commissioner for Refugees (UNHCR).

Denmark is traditionally an open and liberal society, and has been at the forefront in ensuring the rights of sexual minorities, for example. Basic rights are ensured in the constitution and supplemented with additional laws focused on specific areas, including ethnicity and the labor market. Citizens can file complaints concerning issues of discrimination to the Board of Equal Treatment or opt to bring discrimination cases before the courts.
Discrimination can take various forms and can be perceived differently depending on position, history and social context. A key issue is the extent of discrimination in the labor market. Denmark is a country with high-labor force participation for both men and women, and therefore labor market participation should be seen in this perspective.
Gender-based discrimination in the labor market relates primarily to wages but also more generally to hiring and career options. Child care is a particular point in this context. Rules dealing with child leave have been expanded to extend the right (and duty) of fathers to take paternity leave, and financing arrangements have been changed to share the costs across employers. Since 2006 all employers are to contribute to a paternity fund which finances paternity leave, and thus avoids that such costs disproportionally fall on employers with a high level of female employees. A commission (Ligelønskommission) has been appointed to analyze the issue of gender-based wage discrimination in the labor market.
Frequently cases of discrimination in the labor market are reported in the press, with example of persons having difficulties in finding a job due to ethnic identifiers, such as the person’s name. Discrimination in the labor market can be statistical or racial. An employer may be more reluctant to hire a person with a foreign background, based on the assumption that such people have on average weaker job qualifications and thus infer that the job candidate in question does too. Discrimination can also be racial in nature. There is no thorough academic analysis that has attempted to separate these causes and evaluate the extent of discrimination in the labor market.
Indirect discrimination can appear in various forms. A notable area is in terms of rules and regulations which, on the one hand, are general and apply to all citizens, but on the other hand, targets particular groups and where the latter is the motivation for the regulation. One example is the requirement (introduced 2007) that for couples to qualify for social assistance they should show having worked at least 450 hours over the year (originally the law stipulated 300 hours), otherwise the state assumes that one member of the couple is not considered to be actively interested in work and the right to social assistance is lost. While a universal law, the incidence of couples where both people claim social assistance is highest among immigrants with a background from poorer countries, and hence this rule de facto targets this group. Similar reasoning applies to the change in eligibility for social assistance, which now requires residence in Denmark for seven of the eight previous years. If this condition is not met, a lower level of assistance is offered. This can be seen as a breach of the universality principle that underlies the social safety net.
Immigration laws were tightened after the liberal-conservative government came to power in 2001. One particular controversial law was the tightening of rules for family unification. To bring a spouse to Denmark it is required that both persons in the couple are at least 24 years old, in additional to a number of other requirements; there is also an economic test. This rule has several motivations. One is to prevent arranged marriages, in particular involving very young girls. Another is to restrict family unification in particular, and thus immigration in general. While the political support for this rule was related to Denmark’s immigration issues, the rule also affects Danish citizens. Hence, there are many examples of Danes being unable to bring their spouse into the country, and also of young couples settling in southern Sweden and commuting to work in Denmark.
A European Court of Justice (ECJ) ruling in 2008 against a somewhat similar Irish law has since put pressure on the Danish legislation.
Political support for tighter immigration laws has come from the fact the minority government’s parliamentary base relies on cooperation with the Danish People‘s Party. However, most political parties have adopted more strict immigration views in recent years.

Denmark has a long tradition of a rule of law. Traditionally, government officials had law degrees and many still do. No serious problems can be identified in respect to legal certainty in Denmark. The administration is based on a hierarchy of legal rules, which of course gives administrators certain discretion, but also a range of possibilities for citizens to appeal decisions. Much of the Danish administration is decentralized and interpretation of laws can vary from one municipality or region to another. In recent decades more officials have been trained in political science or other social sciences. This may have contributed to making the administration more strategic in thinking, instead of legal, but in reality the Danish administration tends to rely on common sense and be rather pragmatic in its approach. But there is no doubt that political considerations do enter administrative decisions to a certain degree.
Acts passed by the People’s Assembly as well as administrative regulations based on these acts are all made public. They are now widely available on the Internet.

There is judicial review in Denmark. Section 63 of the Danish constitution makes it clear that the courts can review executive action: “The courts of justice shall be empowered to decide on any question relating to the scope of the executive’s authority.” The judiciary is independent even if judges are appointed by the government. Section 64 of the Constitution stipulates: “In the performance of their duties the judges shall be governed solely by the law. Judges shall not be dismissed except by judgment, nor shall they be transferred against their will, except in such cases where a rearrangement of the courts of justice is made.”
Administrative decisions can normally be appealed to higher administrative bodies first and after exhaustion of these possibilities, to the courts. The legal system has three levels with the possibility of appealing lower level judgments to high courts and eventually the Supreme Court.

According to section 3 of the Danish constitution, “Judicial authority shall be vested in the courts of justice.” Further, section 62 stipulates: “The administration of justice shall always remain independent of executive authority. Rules to this effect shall be laid down by statute.” Finally section 64 stipulates, inter alia: “In the performance of their duties the judges shall be governed solely by the law. Judges shall not be dismissed except by judgment, nor shall they be transferred against their will, except in such cases where a rearrangement of the courts of justice is made.”
There are basically three levels of courts in Denmark: 24 district courts, two high courts and the Supreme Court. Denmark does not have a special constitutional court. The Supreme Court functions as a civil and criminal appellate court for cases from subordinate courts.
Judges are appointed by the monarch following the recommendation from the justice minister on the advice of the Judicial Appointments Council. This latter council was formed in 1999. The purpose was to secure a broader recruitment of judges and greater transparency. The council consists of a judge from the Supreme Court, a judge from one of the high courts, a judge from a district court, a lawyer and two representatives from the public. They have a four-year mandate and cannot be reappointed.
Appointed judges are highly educated with several years of law studies. Many used to have experience working in the Ministry of Justice before becoming judges and some move from lower courts to higher courts. In recent years there has been an effort also to recruit distinguished lawyers from outside.
In the case of the Supreme Court, a nominated judge first has to take part in four trial votes, where all Supreme Court judges take part, before he or she can be confirmed as a judge.

In Transparency International’s Corruption Perception Index 2009, Denmark was ranked second on the list with a score of 9.3, after New Zealand, which scored 9.4, but ahead of Singapore, Sweden and Switzerland. Denmark is thus considered one of the least corrupt countries in the world.
We can therefore safely say that there is practically no corruption in Denmark. Norms are strongly against corruption, and the risk of exposure by an active press is high. In the past there has been the occasional case of a local government official accepting “services” from business in exchange for contracts with the municipality, but such cases are rare. There have also occasionally been cases of officials using their representation accounts rather generously. Again, such cases are rare. The latest case involved a well-known member of parliament, Peter Brixtofte, who was sentenced to two years in prison for abuse of office. He had used public funds to finance his wine collection during his time as mayor of the town of Farum.

Prior to the global financial crisis, the Danish economy experienced a boom period. Unemployment reached record lows, there was a current account surplus and the public budget was in the black. However, there were also clear signs of an overheating economy. For a number of years, wage increases had exceeded competitive levels while productivity growth fell below competitors’ levels. Therefore wage competitiveness had systematically deteriorated. Structural problems were growing but concealed by the country’s favorable current account balance. However, this was to a large extent caused by net exports of energy (oil and gas) and positive developments in the shipping industry, while industrial exports were falling. There are also arguments that public budget surpluses were not as large as they should have been, given the strength of automatic budget responses.
The global financial crisis significantly affected the Danish economy. GDP decreased by almost 1% in 2008, and 5% in 2009. Although positive growth is forecasted for the coming years, growth rates are modest (1% to 1.5% of GDP) and hence the recovery is only expected to come slowly. Registered unemployment has more than doubled (from less than 2% to close to 5%), but this conceals a much larger drop in employment. Roughly, the decrease in employment is twice the increase in unemployment. The difference is explained partly by the return of foreign workers to their home countries, general retirement and rising unemployment numbers that are harder to track, as the registered unemployment rate only includes unemployed entitled to benefits or social assistance. However, there is a significant number of people who are not eligible for unemployment benefits or social assistance (means tested on a family basis).
Public finances have changed dramatically and for 2009 the deficit is about 5.5% of GDP, while deficits are projected in the coming years. It is a concern that Denmark violates the 3% budget norm outlined in the Stability and Growth Pact, and that it accordingly is entering the excessive deficit procedure. The Danish convergence program, published in February 2010, attracted much attention since it gave the first official account of the “state of public finances” after the financial crisis. It was assessed that significant budget improvements were needed to ensure both that the 3% budget norm would be met in 2013 and to ensure fiscal sustainability. This assessment has framed policy discussions over the need for consolidation of public finances. While fiscal policy was turned in an expansionary direction at the onset of the crisis, it is now turning in the opposite direction.

In terms of unemployment, the Danish labor market performed very well prior to the global economic crisis. The unemployment level was below 2%, and the Danish case attracted substantial international attention, with its “flexicurity” focus. The debate has highlighted the country’s flexible hiring and firing rules, as well as the social security ensured for citizens via the country’s generous social safety net. However, these elements were also in place during the 1970s and 1980s when unemployment was persistently high and where Denmark was singled out by international bodies like the OECD as a case not to emulate. The main changes in labor market performance were driven by a sequence of reforms during the 1990s by the social democratic-led coalition government. These changes were introduced with the understanding that it was the country’s right and duty to maintain the social safety net, but that more clear requirements for claimants were needed. Thus the focus shifted from income maintenance to job search and job creation. There are now explicit participation or activation requirements for claimants of both unemployment insurance benefits and social assistance. Moreover, participation in active labor market programs no longer qualified for a period of extended benefits and benefit duration was shortened.
The Danish model has become known as a “flexicurity” model. It is not costly to fire employees; the social welfare state steps in with motivation and training. There is a fair amount of mobility. Youth employment and employment of women are comparatively high in Denmark. The main challenge Denmark faces is getting more immigrants, and to some extent older people, into the job market.
The European Commission has looked favorably at the Danish labor market policy.
With the current economic crisis the model faces challenges, but it will probably be one of the ingredients that will help Denmark pull through.

It is fairly easy to start a business in Denmark, as the economy is not overly regulated and there is little bureaucratic red tape. The amount of investment, especially foreign direct investment (FDI) could be higher. Unit labor costs are relatively high. Still, the economy is reasonably competitive. Interest rates as well as energy costs have remained relatively low.
The government is actively trying to improve the country’s business environment. This has been a part of the National Reform Program, the Danish contribution to the Lisbon Strategy. In this program, the government identified five challenges in the microeconomic area, namely enhancing competition in certain sectors, strengthening public sector efficiency, developing a knowledge society, securing environmental sustainability and encouraging entrepreneurship.
The goal of the government’s enterprise policy by 2010 was for Denmark to be one of the countries where most new enterprises are launched, and by 2015 to be one of the countries where most new growth enterprises are launched.
These goals echo the European Union’s Lisbon Strategy 2000-2010, which is now widely judged to have been a failure. The open method of coordination did not produce the structural reforms required in many countries for Europe to become more competitive. Needless to say, national performance varies a lot. In a recent evaluation document from the European Commission, Denmark is listed as having the highest employment rate in 2009 after the Netherlands. And Denmark has the third highest expenditure on R&D, after Sweden and Finland.
Comparative studies of entrepreneurship find that Denmark is among the top countries in terms of enterprise start-ups. However, the financial crisis has apparently affected start-ups in Denmark more than other countries. However, although the number of start-ups is relatively large, there are relatively fewer high-growth start-ups.

Denmark’s large, expansive welfare state implies a high tax burden. The tax burden relative to GDP is close to 50% and therefore Denmark ranks at the top of welfare spenders among OECD countries. The tax structure in Denmark differs from most countries by having direct income and indirect (VAT) taxation as the predominant taxes, while social security contributions play a modest role.
Large and small tax reforms (1987, 1994, 1998, 2004 and 2009) have been implemented over the years following an international trend of broadening tax bases and reducing marginal tax rates. The latter has in particular been important for labor income taxation. Decreasing income tax rates have, to a great extent, been financed by broadening the tax base, especially by reducing the taxable value of negative capital income (the majority of house owners have negative capital income because of mortgage interest payments) from 48% to 73% in 1986 to approximately 33% in 2010. In 2004 an earned income tax was introduced to strengthen work incentives. Environmental tax has also been increasingly used.
An important issue in policy design is tax competition. This has led to reduction of some excise taxes to reduce “border” trade. Corporate tax rates have also been reduced from 50% in 1986 to currently 25%, although the tax base has been broadened.
In 2009 a new tax reform was approved, which includes a further reduction in the top marginal tax rate (from 63% to 56%), but more importantly, the income limit for which to top tax rate applies was reduced. This implies a significant drop (350,000 persons) in the number of taxpayers who pay the top marginal tax rate. The changes were financed by broadening the tax base, via a reduction in the tax value of deductibles, and further increases in environmental taxes.

The global economic crisis that started in 2008 has had adverse effects on Denmark’s public budget. In 2008 Denmark operated under a surplus, corresponding to 3.4% of GDP. In 2009 that changed to a deficit corresponding to about 3% of GDP. The deficit is expected to reach about 5.5% of GDP in 2010. The large swing in the budget balance is partly due to the strong automatic budget reaction and partly due to an expansionary fiscal policy (amounting to 1.5% of GDP).
Systematic budget deficits are forecasted, and measures are needed both to meet the 3% budget norm within the Stability and Growth Pact, and to ensure fiscal sustainability. Public debt is low by international standards (in 2008, 35% of GDP), and net debt was negative before the crisis. Denmark succeeded in consolidating public finances in the years prior to the financial crisis.
While public finances in Denmark are not in as difficult a position as a number of other European countries, there are still significant problems. A particular noteworthy aspect is that analyses of fiscal sustainability show that the structural balance will display deficits for the coming 35 to 40 years. Although surpluses are expected far in the future, implying that the country’s fiscal sustainability indicator looks reasonably favorable (and among the best within the European Union), it is very risky to base economic policy on a trajectory implying systematic deficits for such an extended period. Hence, the need for reforms to consolidate public finances and to ensure a more robust budget profile.

The main principles of health care in Denmark are: universal health care for all citizens, regardless of economic circumstances; services are offered “free of charge”; and sector governance, that is hospitals are governed by elected regional bodies, now governed by councils of the newly formed regions. But financing through taxes depends on the state budget, so regional authorities depend on annual budget negotiations with the Ministry of Finance.
While health expenditures for a number of years did not grow more than GDP, there has been an upward trend in recent years, implying that the expenditure share has increased one percentage point of GDP, to close to 10%. The expenditure share has thus moved from close to the OECD average to the top. This increase is mainly driven by a change in policy from a top-down system to a more demand-driven system. The latter has been motivated by a concern about long waiting lists and the move to offer a “time guarantee” where patients under the public system can turn to a private provider if the public health care system can‘t meet the time limit for treatment in a public hospital. In addition, the government has aimed to bring more private providers into the sector. This is also reflected in the tax deductibility of employer-provided, private health insurance.
A 2007 structural reform has shifted the responsibility for hospitals and health care from the old counties to the new regions. Health care is financed by a specific tax, however, which is part of the overall tax rate and over which regions have no control.
Basic principles underlying the health care sector have thus been changed in recent years. This reflects both ideological views but also the increasing demand for health care. A particular challenge for the future is how to manage and finance the need and demand directed toward health care.

There is a high degree of social cohesion in Denmark. The country is very egalitarian. High taxes allow for generous transfers to less well-off citizens; there are few instances of absolute poverty in Denmark. Welfare programs also have strong legitimacy. A high percentage of people are said to be happy with their life.

The American scholar John Campbell has written that, “for Danes, social cohesion is a national priority…that social cohesion has contributed significantly to Denmark’s ability to adapt flexibly to globalization. I maintain (and research confirms) that the greater income and social equality experienced by Danes than by those in many other advanced capitalist countries leads to more social trust and a greater collective commitment to national goals, given that a more equitable distribution of wealth ensures that national gains benefit everyone.”
Denmark has the highest Gini coefficient score (least inequality) among OECD countries. Denmark also has the highest score on life satisfaction. In respect to gender equality, Denmark ranks third after Sweden and Norway. Only two countries, Sweden and the Czech Republic, have better scores on poverty.

Poverty is a relative concept, however, which includes both economic and non-economic dimensions (such as social inclusion). There is no official definition of poverty in Denmark, although an implicit definition is implied by the lowest level of assistance in the social safety net. Recently there has been much debate both about the definition of poverty and thus the country’s number of poor, and whether an official poverty definition is needed. The rules in the social assistance system requiring residence in seven out of the preceding eight years to qualify for base assistance is a much-debated issue. If this condition is not met, a lower benefit (starthjælp) is offered. Questions remain whether this rule is responsible for causing poverty and social exclusion.

Danish family policy is well-received. The country’s system of day-care centers, crèches and kindergartens allow sufficient flexibility for both parents to work. Indeed, female employment in Denmark is among the highest in OECD countries. Comparative research also shows that men in Nordic countries tend to contribute more to work at home than do men in many other countries. The system of parental leave, in connection with childbirth, is relatively generous and men also have parental leave rights.

It is not just the government, including government municipalities that are in charge of day care facilities, which contribute to better family policy. Social parties and business have roles to play.

The great majority of children attend daycare facilities in Denmark. In 2006, 90.7% of children aged three to five attended some kind of preschool institution, compared to the OECD average of 73.49%. Such facilities are regarded as an indispensable public service. There has been a large expansion in the number of preschools in recent years.

Pension policy in Denmark is well-diversified across the three pillars, according to the World Bank classification:
(1) Public pensions are considered a basic part of the welfare state; the base pension is universal in the sense that it is only age-dependent. However, a full pension requires residency for 40 years, with the pension age set at 65; what’s more, there is a labor income limit. In addition to a base pension, there are means-tested supplements.
In addition there are age-specific subsidies (e.g., for transport) as well as a specific scheme for rent subsidies for the elderly.
(2) Labor market pensions made their mark on Danish society during the late 1980s and early 1990s. These pension schemes are negotiated in the labor market but are mandatory for the individual. The contribution is split between employers (2/3) and employees (1/3). The contribution rate has been increased over the years and is now 10.8% for most employees. However, since these pension funds are relatively new, few have contributed at high rate during their whole working career. In addition, there are supplementary labor market pensions from pension funds ATP and LD Pensions. The former is mandatory and redistributive, in the sense that contributions depend on income but are based only on working years. The LD Pension is a “frozen” wage increase from the 1970s that has since been transformed into a pension right.

(3) While most citizens are covered by pensions from pillars one and two, there is still a large group (roughly 1/3) who collect private pensions through financial institutions on top of their public pension. Since this is related to labor market performance, there is a gender difference both due to a slightly lower labor force participation for women and a lower level of income. Pension savings are tax subsidized. Contributions are deductable in taxable income, while pensions are taxable income. However, for most the tax rate that applies to the deduction when working is higher than the one applying when not working as a pensioner, due to progressive elements in taxation, and hence the subsidy. The tax principle causes problems in relation to portability when, for example, Danish pensioners decide to move to another country.
In addition to the public pension scheme, the early retirement scheme is important. It allows retirement at the age of 60 and offers a benefit until the statutory pension age of 65.The scheme is voluntary and contribution-based, but it is highly subsidized. The scheme was introduced in 1979 as a labor market initiative to cope with youth unemployment, but has since then become an integral part of the welfare package. The scheme has been reformed a number of times and now includes incentives to delay retirement until the age 62.
While the labor force participation in general is high in Denmark even for citizens aged 50 to 55, it is low for those aged 60 to 65, which reflects the effects of the early-retirement scheme. The scheme is much debated and politically controversial.
The problems of an aging population are also affecting Denmark. The financial consequences of increasing longevity are large, and have been at the core of policy debates for some years. A so-called welfare reform was approved with broad parliamentary support in 2006. This scheme increases the statutory age for early retirement by two years over the period 2019-2023, and the statutory pension age by two years over the period 2024-2027. After these transitions periods, the statutory ages are linked to longevity via an indexation mechanism targeting an average retirement period of 19.5 years.
This reform is a significant response to the challenge of Denmark’s aging population, although recent assessments show that the reform does not fully solve the problem.

In 2009 there were approximately 530,000 immigrants and descendants of immigrants living in Denmark, which corresponds to 9.5% of the population. After the tightening of immigration policy introduced by the liberal-conservative government in 2002, immigration from non-Western countries fell but net immigration from Western countries rose. In January 2009, 11.1% of immigrants and their descendants were of Turkish origin, followed by 5.8% of German origin, 5.5% of Iraqi origin, 5.2% of Polish origin, 4.5% of Lebanese origin, and 4.2% came from Bosnia-Herzegovina.

The employment frequency among 16- to 64-year-old immigrants and their descendants rose from 46% in 2001 to 57% in 2008. This latter figure should be compared with 79% for Danes. For female immigrants and their descendants, employment rose from 38% to 51% in the same period, which still means that one in two immigrant women do not work.

The employment rate for immigrants from poorer countries has been increasing in recent years, and so far this group has not seemed to suffer disproportionally from the effects of the financial crisis. This improvement can in part be attributed to a lower inflow of immigrants, which has increasing the average residence period of immigrants in general, and that more immigrants were admitted to Denmark for labor market reasons.

In relation to educational achievements, immigrants and their descendants are making progress but still fall well behind native Danes. In 2008, the percentages of 25- to 29-year-olds who had achieved a higher education were 9% for immigrants and 20% for their descendants, compared with 32% for Danes. The 24-year-old rule for family reunification introduced in 2004 has had the effect that immigrants and their descendants bring spouses from abroad now less often. The percentage fell from 61% in 2001 to 31% in 2008. Instead, immigrants increasingly marry other immigrants or their descendants already living in Denmark, as well as native Danes.

Still, it is fair to say that a number of immigrants in Denmark, especially from non-Western countries, have problems integrating. The government has therefore introduced a number of policies and measures in cooperation with municipalities designed to further the integration of immigrants.

These instruments, apart from improved language courses at all levels, include financial incentives to the municipalities, industry, NGOs and so on to assist with the integration of immigrants.

The government claims that the situation is improving. According to a recent publication from the Ministry of Refugees, Immigration and Integration Affairs, an increasing number of immigrants say they feel more integrated, have more Danish friends and fewer feel discriminated against, while many more immigrants are speaking Danish than ever before. Still, there is a long way to go.

Denmark’s external security is based on its membership in NATO.
Since the end of the Cold War, there has been no serious conventional threat to Danish territories. But terrorist attacks in the United States, Spain, Britain and other countries suggest that Denmark may too face the external threat of a terrorist attack. This risk is related both to the controversy surrounding the Muhammad cartoons and the country’s involvement in the war in Afghanistan. A broad six-party agreement on Danish defense in June 2004 defined defense goals as:

• to counter direct and indirect threats to the security of Denmark and allied countries;
• to maintain Danish sovereignty and the protection of Danish citizens;
• to work toward international peace and security in accordance with the principles of the U.N. Charter, especially through conflict prevention, peacekeeping, peacemaking and humanitarian operations.

The changed security situation required the Danish defense “to strengthen its capacities in two central areas: 1) international deployable military capacities and 2) the ability to counter acts of terror and their consequences.” The agreement also states that “Danish security policy should primarily be aimed at countering the threats where they emerge, regardless of whether this is within or beyond Danish borders.”

The Danish defense is therefore being reorganized away from classic territorial defense to having the capabilities required for international peacekeeping and peacemaking activities. Denmark has a proud tradition of taking part in U.N. peacekeeping actions, and since the end of the Cold War, Denmark has also taken part in a number of NATO activities, for example in former Yugoslavia. Similarly Denmark has been actively involved in the conflicts in Afghanistan and Iraq.

Danish defense policy has normally been based on broad agreements between several political parties. The latest such agreement was reached on June 24, 2009, involving the Social Democratic Party, the Danish People’s Party, the Socialist People’s Party, the Conservative Party, the Radical Liberal Party and the Liberal Alliance Party. The agreement continues the trend observed previously, adapting to international changes, including armed conflict, stabilization tasks and international policing in various parts of the world.
But Denmark has a problem: the opt-out from EU defense policy. So Denmark has not been able to take part in activities under European Defense and Security Policy (ESDP) since they started in 2003.
Many Danish politicians would like to abolish the defense opt-out. And there has also been a majority public opinion in favor of such a step. But so far the government has not wanted to risk calling a referendum (remembering that the Danes voted against participation in the euro in 2000).

Internal security depends both on defense forces and police work (falling under the Ministry of Justice). Cooperation between the police and defense intelligence services was increased after 9/11. So has international cooperation among Western allies.

Denmark is not a violent society. The homicide rate is low, and Danes normally trust the police. Burglaries are not uncommon, though crime related to drug use does occur.

The EU is also trying to upgrade all aspects of Justice and Home Affairs (JHA) cooperation. Here too Denmark has a problem, namely the JHA opt-out from1993. Denmark has been taking part in JHA cooperation as long as the body was intergovernmental, as opposed to applying the community method of what used to be the EU’s first pillar. After passage of the Lisbon Treaty and the abolition of the pillar structure of the European Union, all JHA actions have become supranational. Denmark therefore does not take part in JHA post-Lisbon, except if it decides to opt-in, which has been made possible by the treaty.

In a Gallup poll in December 2008, when Danes were asked whether they were in favor of Denmark’s participation in the EU’s Justice and Immigration Policy, 49% said they were in favor with 34% against. A strong political coalition could thus possibly win a referendum to abolish this Danish opt-out. But the government has not called such a referendum.

Because of the Muhammad cartoon controversy in 2005, it is reasonable to expect that there are both foreign and domestic threats against Denmark. In an opinion poll of June 4, 2008, 75% of the Danes answered “probably/very probable” to the question, “How probable do you think it is that Denmark will become a target for terror attacks carried out by fundamentalist Islamic groups within the near future?” The murder plot discovered by Danish police in February 2008 against cartoonist Kurt Westergaard lends support to the feeling that Denmark may be the target of terror attacks.

Concerning environmental policy, Denmark is often seen as a relatively progressive country. Academics, for example, have labeled countries like Germany, the Netherlands and Denmark as the “green states” during the formative years of EU environmental policy. Within the European Union, Denmark has been asking for high environmental standards.
Much of Denmark’s current environmental policy is based on EU directives. Taking EU policy as standard – and it can of course be discussed whether EU standards are good enough – we do have data on implementation. These data suggest that Denmark is doing reasonably well on implementation.
Denmark’s environmental performance review by the OECD in 2008 was somewhat mixed. On one hand it was stated that “the well-balanced environmental policies of Denmark have led to significant environmental progress.” However, it the same time it was stated that “further environmental progress is needed for health and economic reasons,” suggesting that further environmental improvements be reflected in the country’s transport, agriculture, energy sectors as well as fiscal policies. Denmark is below OECD averages for municipal waste generation per capita and in the use of nitrogenous fertilizers. Denmark has some of the highest rates of mortality for some types of cancer, and allergy and respiratory diseases affect about 20% of the population.

Denmark scores quite well in international comparisons on competitiveness. Denmark ranked fifth in the World Economic Forum’s Competitiveness Index for 2009, after Switzerland, the United States, Singapore and Sweden, but ahead of Finland, Germany and Japan. This was down from third in 2008.

The report emphasized the country’s high rankings with regard to macroeconomic stability, its high national savings and narrow interest-rate spreads. However, this ranking should be interpreted carefully in a forward-looking perspective, given the serious deterioration of wage competitiveness and falling productivity.

Denmark and other Nordic countries are said to “have among the best functioning and most transparent institutions in the world.” These countries “also continue to occupy the top three positions in the higher education and training pillar, the result of a strong focus on education over recent decades.” Further, “this has provided the workforce with the skills needed to adapt rapidly to a changing environment and has laid the ground for their high levels of technological adoption and innovation.”

On one point Denmark scored better than its Northern neighbors: “Denmark continues to distinguish itself as having one of the most flexible and efficient labor markets internationally.”

In 2010 the public sector R&D expenditures in Denmark is to reach 1% of GDP. Significant increases were budgeted for 2009 and 2010. Private sector R&D expenditure was 1.65% of GDP in 2006, lower than in Sweden and Finland, but above the EU average.

Denmark claims top levels in education spending, but not in achievement.
Danish pupils have not scored well on Program for International Student Assessment (PISA) problem-solving tests. After the 2003 PISA results the government realized that something had to be done. At the time Denmark was 16th among 30 OECD countries in reading, but the result was worst in science, where Denmark was 31st out of 40 participating countries. In math, Danish pupils were 13th among the 30 OECD countries, but 15% to 16% of pupils had completely insufficient math competences.

The PISA results led to various efforts to improve Danish schools. As part of the government’s 2006 globalization strategy, reforms of primary and lower secondary school system were announced. “Academic standards need to be raised considerably in the core subjects of reading, mathematics, science and English. Evaluation and testing should give teachers, parents and pupils a clear idea of where particular focus is needed. Teachers should become subject specialists. The schools’ management should be strong and visible, and the local authorities’ responsibility for academic results should be crystal clear.”

It is a target that 95% of young Danes should complete a general or vocational upper secondary education program. At least 50% of young people should complete a higher education program.

In 2006 Denmark moved up, to 18th in science, a result seen as still not good enough. Teacher training overall has to improve and attitudes toward education reform have to change.

Currently a thorough review of Denmark’s basic schooling system, called a “360-degrees review” is in process.

A special problem is the fact that non-Western students score markedly lower than Danish students, a problem in particular for boys. However, second-generation students do relatively better than first-generation students.