The Netherlands


Sustainable Policies


Economic Policies

With past successes allowing a robust response to the pandemic, the Netherlands scores well overall (rank 11) for its economic policies. Its score on this measure has gained 0.2 points relative to 2014.

Despite a contraction in growth in 2020, the Dutch economy was well-prepared for post-COVID-19 recovery. The government provided generous support to firms, and digital skills are widespread, allowing for extended work from home. GDP growth in 2021 was 3.8%, with the economy surpassing its pre-pandemic level late that year.

The unemployment rate increased from a record low of 2.9% in early 2020 to 4.5% at the end of that year, but had returned below 3% by late 2021. Taxes are complex and lack transparency. The new coalition aims to simplify the system. Lenient wealth and business taxes have earned the country a reputation as a tax haven.

The government ran deficits of 4.9% and 5.9% of GDP in 2020 and 2021, driven by relief spending. Debt is projected to reach 60.4% of GDP by 2025, but this is deemed manageable. Large spending projects for green industrial policy, social housing and infrastructure are on the horizon. R&D expenditure is rising.

Social Policies

With several areas of concern marring a generally effective policy approach, the Netherlands falls into the upper-middle ranks (rank 16) with regard to social policies. Its score on this measure has declined by 0.6 points relative to 2014.

The Dutch education system performs well, with spending allocated efficiently. However, inequalities tied to social background deepened during the pandemic. A post-pandemic program is aimed at addressing weaknesses across the system. Poverty rates are low, but income inequality has grown. Decentralization policies appear to be undermining anti-poverty programs.

The outbreak of COVID-19 exposed vulnerabilities in the healthcare system, which has focused on efficiency and cost containment in recent years. Care staff are underpaid. Vaccination rates are high. In a major scandal, many innocent families receiving childcare benefits were targeted by an automated fraud system and forced to pay back large amounts of money.

A new pension law simplifies rules and brings freelance workers into the system. A large share of the Dutch population is of migrant origin. Immigrants benefit from employment and labor market integration programs, but conditions are poor in refugee camps. Organized drug crime is an increasingly serious problem, leading to high-profile murders and influence in political and police circles.

Environmental Policies

With legal battles driving significant aspects of policy, the Netherlands falls into the middle ranks internationally (rank 22) with regard to environmental policies. Its score on this measure has improved by 0.2 points since 2014.

Court verdicts have forced the government into new action on air quality and agricultural pollution. The new coalition has increased emissions-reduction ambitions. It is seeking binding pollution-reduction agreements with the country’s top 20 industrial polluters, and is looking to nuclear energy as a sustainable source of power.

Overall, air and surface-water quality is poor, in large part due to intensive farming and traffic congestion. Plastics are seen as a problem, but are dealt with at the municipal level. The renewable energy share is small, consisting mostly of biomass.

Courts have increasingly set precedents targeting individual polluting businesses. Royal Dutch Shell left the country after being ordered to reduce its CO2 emissions. The country provides bilateral support for sustainability policies. However, trade activities and tax policies produce considerable negative environmental impact on other EU member states.

Robust Democracy


Quality of Democracy

Showing distinct setbacks in recent years, the Netherlands falls into the lower-middle ranks (rank 28) with respect to democratic quality. Its score on this measure has declined by 1.1 point relative to 2014.

Political parties are largely funded through membership contributions and government subsidies. Donors contributing more than €4,500 must be identified, and foreign donations can come only from other EU countries. Criticism by right-wing politicians has recently led to attacks on journalists, who have engaged in self-censorship as a result.

Civil rights are generally protected. Protests against pandemic policies turned uncharacteristically chaotic, leading to violence between protesters and police. Racial profiling has been approved by the courts. Anti-Muslim opinion is a concern. Internet-based threats and active discrimination against Jews, Muslims, Afro-Dutch citizens and women are rising.

The massive expansion of the drug-trafficking industry, along with the normalization of drug use, has led to corruption among customs workers and harbor workers, and well beyond into regular society. An increasingly realistic diagnosis of the problem is improving anti-corruption policy. Legal experts argue that recent legislative practices have undermined rule-of-law protections.

Good Governance


Executive Capacity

Following the revelation of recent management failures, the Netherlands falls into the lower-middle ranks (rank 28) in the area of executive capacity. Its score on this measure has declined by 0.8 points relative to its 2014 level.

The Prime Minister’s Office coordinates policy, but has limited capacity to evaluate proposals. Independent strategic-planning units and knowledge centers help guide long-term strategies. Proposals often stem from the government coalition agreements or EU policy coordination. Important decisions are often made in meetings between the prime minister, cabinet and coalition parties.

RIAs are broadly and effectively applied particularly with regard to environmental impact and administrative-burden reduction. The use of the “poldering” interest-group consultation model privileges some groups over others. Considerable resources have been spent on communication experts, with some arguing this has generated propaganda.

The previous government stepped down after the revelation of serious policy failures stemming from monitoring and coordination failures. Austerity policies have produced a significant number of implementation failures. Subnational governments lack sufficient funding for their assigned tasks. The political system is widely viewed as having wrongly prioritized efficiency over public value.

Executive Accountability

With a mixed pattern of strengths and weaknesses, the Netherlands falls into the lower-middle ranks (rank 27) with respect to executive accountability. Its score on this measure has declined by 0.6 points relative to its 2014 level.

Parliamentarians have only modest resources, though executive-oversight powers are adequate. Staff cuts at the independent Court of Audit have required frequent research outsourcing. Recent high-profile government policy failures have highlighted the ombuds office’s lack of efficacy. The data-protection agency does not have sufficient funding to address its potential workload.

General disinterest and disinformation efforts have had a deleterious effect on the public’s political knowledge. However, civic-mobilization campaigns are becoming increasingly common. Two groups with roots in protest movements have been given platforms in the public media sector. Some feel this may undermine the system’s statutory mission.

Political-party decision-making is centralized. While labor unions and business associations are formally integrated into government policymaking, professionalized lobbying has also taken hold. Ties between political parties and civil society groups are becoming increasingly common, with high-level staffers routinely going from one side to the other.
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