Policy Performance


Economic Policies

A mix of stable, sustainable economic policies places Denmark in the top ranks internationally (rank 3) in this area. Its score on this measure has improved by 0.4 points since 2014.

Growth rates remain moderate but steady. Unemployment rates are low, and long-term unemployment has not increased dramatically. Productivity growth rates have declined. However, recent observations indicate the country is close to the international trend in this area.

The country’s “flexicurity” model continues to support a high degree of labor-market mobility, with training and assistance provided to the unemployed. Wages have proven flexible and adaptable. Wage competition has recovered, with the low levels of wage growth despite falling unemployment rates partially explicable by migrant worker flows.

The tax burden is high, with income and VAT taxes dominant. Marginal income-tax rates have decreased, as have corporate taxes. The government plans to reduce taxes somewhat. Budget balances are sustainable, with debt levels moderate. Public expenditure on research has been cut, but remains robust.

Social Policies

With a highly developed welfare system, Denmark falls into the top group internationally (rank 2) with respect to social policies. Its score on this measure is unchanged relative to 2014.

After years of mediocre scores on international tests, results in the 2015 PISA tests showed improvement. Education reforms have lengthened school hours, boosted math and language requirements, and increased funding. Further reforms for vocational and university education are underway.

Most social transfers have been reformed to strengthen incentives to work. Poverty rates are low, and the country is fairly egalitarian. Tax-financed health care services are available to all citizens. Patients stuck on long waiting lists can eventually turn to private providers. A robust child-care system allows both parents to work, with generous maternal and paternal leave provided.

Recent pension-system reforms have improved sustainability, with the three-pillar model providing ample benefits. The refugee wave in 2015 and 2016 prompted measures aimed at reducing immigration, including the reintroduction of border controls and a reduction of transfers to immigrants.

Environmental Policies

With ambitious targets for phasing out fossil-fuel use, Denmark falls into the top ranks worldwide (rank 5) with regard to environmental policies. Its score in this area has improved by 0.3 points relative to 2014.

Denmark is an environmental leader, with very strong climate policy in particular. The share of renewable-energy use is fairly high, representing 23% of consumption, and water usage is restrained. Direct emissions have fallen substantially, though this masks a rise in imports from less CO2-friendly countries.

National goals are striking, including an increase in the share of energy consumption from renewable to 50% by 2030 , and fully fossil-fuel-free energy production by 2050.

The country plays an active role in shaping international environmental regimes, working through the EU, the UN and other bodies. At the 2015 Paris climate summit, the government was criticized for lowering its medium-term emissions-reduction goals slightly.



Quality of Democracy

With free and fair electoral procedures, Denmark falls into the top ranks internationally (rank 3) in the area of democracy quality. Its score in this area has fallen by 0.1 point relative to 2014.

Parties receive public support, but private contributions lack transparency. A large party was recently cited for using EU funds for domestic political activities. Citizens living permanently overseas cannot vote. Referendums are used primarily for EU-related issues.

The media are independent, with a high degree of pluralism. One public TV service is being privatized. The information-access law is broad, but has been criticized for reducing public access to policy-preparation documents.

Civil rights are widely respected. Ethnic and gender-based discrimination is an occasional labor-market concern. Immigration rules have been tightened, drawing criticism from international human-rights organizations. Adherence to the rule of law is strong. Courts are independent and powerful, and corruption very rare.



Executive Capacity

With an unmatched set of strengths, Denmark falls into the top ranks internationally (rank 1) with respect to executive capacity. Its score on this measure has gained 0.1 point relative to 2014.

Strategic-planning capabilities are strong. Seconded line-ministry officials enhance sectoral-policy review capacities in the Prime Minister’s Office. Ministries are fairly autonomous, with policy coordination taking place in cabinet and coordination committees. Decision-making is consensual, with informal coordination playing a critical role.

RIAs are required, and are generally of high quality. Experimental programs are sometimes used to test new policies. Interest groups are consulted throughout the policy cycle. A strong e-government push has resulted in tax reporting and most government communications taking place online.

Municipalities levy income tax, with equalization formulas assisting poorer regions. However, many local governments currently face financial difficulties. Ongoing discussion on improving public-sector efficiency and productivity periodically leads to major institutional changes, but individual policy change is more frequent.

Executive Accountability

Marked by mature and well-functioning oversight mechanisms, Denmark’s executive-accountability score places it in the top ranks internationally (rank 3). Its score on this measure represents a decline of 0.1 point relative to 2014.

Citizens have good knowledge of domestic and EU policies, with recently implemented mandatory digital mailboxes making it easier for the government to communicate with the public. The media covers domestic policy more thoroughly than it does international issues. Policymakers increasingly communicate directly with the public through social media.

Parliamentarians have modest resources, but reasonably strong formal oversight powers. The audit and ombuds offices are independent and well respected.

Political parties show a significant degree of internal democracy. Economic and non-economic interest organizations are typically sophisticated, and often have a strong influence on policy. Major interest organizations are often members of committees and commissions tasked with preparing legislation.
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