Sustainable Policies


Economic Policies

A mix of stable, sustainable economic policies gives Denmark the top ranking in the SGI 2020 in this area. Its score on this measure has improved by 0.3 points since 2014.

Growth rates are slowing, but remain healthy. Unemployment rates are low, with structural barriers such as skills shortages constituting the main barrier to further reductions. Moderate growth forecasts have reduced concern about labor shortages.

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. The government is running a budget surplus, and overall debt levels low by EU standards. Financial-institution credibility has deteriorated due to aggressive interpretation of tax rules and involvement in a money-laundering scandal in Estonia.

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 has improved by 0.1 point relative to 2014.

After a period of mediocre student scores on international tests, results have improved in recent years. Education reforms have lengthened school hours, boosted math and language requirements, and increased funding. A policy that reduced the education budget is being reversed.

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 have risen in recent years. Tax-financed healthcare services are available to all citizens, but healthcare system quality does not reflect the high spending levels.

A robust childcare system allows both parents to work, with generous maternal and paternal leave provided. Recent pension-system reforms have improved sustainability. Immigration-related tensions have led to a tightening of rules, but labor-market and educational integration is proving increasingly successful. A crime wave has led to new border checks at the bridge-tunnel to Sweden.

Environmental Policies

With ambitious targets for phasing out fossil-fuel use, Denmark falls into the top ranks worldwide (rank 2) with regard to environmental policies. Its score in this area has improved by 0.8 points relative to 2014.

Climate policy in particular is a strength, with increasing focus on whether current policies are sufficiently ambitious. Direct greenhouse-gas emissions have fallen about 20% since the mid-1990s, and there is broad agreement on targeting a 70% reduction by 2030 compared to 1990 levels. The renewable-energy share is currently 23% on a consumption basis.

All parliamentary parties have approved an agreement aiming to produce 100% of electricity consumed in Denmark from renewable sources by 2030. A government 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.

Robust Democracy


Quality of Democracy

With free and fair electoral procedures, Denmark falls into the top ranks internationally (rank 4) in the area of democracy quality. Its score in this area is unchanged relative to its 2014 level.

Parties receive public support, but private contributions lack transparency. A large party was recently cited for using EU funds for domestic political activities. Referendums are used primarily for EU-related issues. A “citizens’ proposal” model requires that law proposals gaining the support of 50,000 voters be debated by parliament.

The media are independent, with a high degree of pluralism. Newspapers’ affiliations with political parties have diminished in recent years. The budget for the public radio service has been cut, and the financing model is shifting from a license-fee to a tax-based system. Adherence to the rule of law is strong. Courts are independent and powerful, and corruption very rare.

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, but the new government has begun taking refugees again.

Good Governance


Executive Capacity

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 long-term strategic plans playing a strong policy role. A new unit in the Prime Minister’s Office is tasked with bolstering strategic action for top-priority projects. 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 to be among the EU’s most advanced with regard to using digital technologies.

Regulations are fairly enforced, with substantial checks and balances. The local-government structure has been controversial, but municipalities and regions have been given greater funding to perform their welfare and education tasks. The new prime minister has criticized past savings- and efficiency-focused policies as having gone too far.

Executive Accountability

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.
Back to Top