Denmark

   

Policy Performance

#2

Economic Policies

#3
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 0.3 points since 2014.

Growth rates remain moderate but steady. Unemployment rates have returned to their pre-crisis lows. Productivity growth is low, but near the OECD average, and policy discussions have begun to focus on the dangers of economic overheating.

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. The high minimum wage can make it difficult for individuals with low-level qualifications to find stable jobs.

The tax burden is high, with income and VAT taxes dominant. Marginal income-tax rates have decreased in recent years, as have corporate taxes. Budget balances are sustainable, with deficits and debt levels moderate. Financial-sector regulation has been tightened in accordance with post-crisis EU rules, with a systemic-risk council now monitoring financial institutions.

Social Policies

#2
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 have improved in recent years. 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, with eligibility rules including a residence and work requirement. Poverty and inequality rates are low but rising. Tax-financed health care services are available to all citizens. New structural-reform proposals are proving controversial, however.

A robust child-care system allows both parents to work, with generous maternal and paternal leave provided. Recent pension-system reforms have improved sustainability. Immigration tensions have led to the reintroduction of border controls and a reduction of transfers to immigrants, but integration of refugees into schools and the labor market is improving.

Environmental Policies

#3
With highly ambitious targets for phasing out fossil-fuel use, Denmark falls into the top ranks worldwide (rank 3) with regard to environmental policies. Its score in this area has improved by 0.5 points relative to 2014.

Climate policy in particular is a strength, with increasing focus on whether current policies are sufficiently ambitious. The renewable-energy share is 23% on a consumption basis. Direct emissions have fallen by 20% since the 1990s, though this masks a rise in imports from less CO2-friendly countries.

National goals target fossil-fuel-free energy production by 2050. All current parliamentary parties have approved an agreement pushing for 100% of electricity to be produced renewably by 2030. A new climate plan would phase out petrol and diesel cars by 2030, and earlier for buses and taxis.

The country plays an active role in shaping international environmental regimes, working through the EU, the UN and other bodies. Civil society actively puts pressure on politicians to act in this area both domestically and internationally.

Democracy

#4

Quality of Democracy

#3
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. The budget for the public radio service is being cut, with the financing model shifting from a license-fee to a tax-based system. The government coalition’s agreement on the public media has been criticized by some for interfering with the political independent institution.

Civil rights are widely respected, but a recently passed law bans the wearing of full-face veils. 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.

Governance

#4

Executive Capacity

#2
With a tradition of policies oriented toward the long term, Denmark falls into the top ranks internationally (rank 2) with respect to executive capacity. Its score on this measure has gained 0.1 point relative to 2014.

Strategic-planning capabilities are strong, with major reforms typically produced by commissions, and long-term strategic plans playing a strong policy role. Ministries are fairly autonomous, with policy coordination taking place in cabinet and coordination committees. Decision-making is consensual, with informal coordination important.

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. The country is deemed the EU’s most advanced with regard to using digital technologies.

Regulations are fairly enforced, with substantial checks and balances. Municipalities levy income tax, with equalization formulas assisting poorer regions. However, many local governments currently face financial difficulties. An efficiency drive has led to across-the-board 2% budget cuts, and a structural health-care reform has been proposed.

Executive Accountability

#4
Marked by mature and well-functioning oversight mechanisms, Denmark’s executive-accountability score places it in the top ranks internationally (rank 4). Its score on this measure has gained 0.2 points 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. Funding for the public radio services is being shifted to a tax-funded system.

Parliamentarians have modest resources, but reasonably strong formal oversight powers. The audit and ombuds offices are independent and well respected. The independent data-protection authority deals with complaints and monitors implementation and enforcement of data-protection rules.

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, while still oriented toward the consensus tradition. Major interest organizations are often members of committees and commissions tasked with preparing legislation.
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