Denmark

A mix of stable, sustainable economic policies gives Denmark the top ranking in the SGI 2022 in this area. Its score on this measure has improved by 0.2 points since 2014.

The pandemic and the associated containment policies triggered an unprecedented decline in economic activity. However, growth recovered swiftly after restrictions were lifted, aided by recovery programs. Sound public finances made it possible to act quickly without sustainability fears.

The country’s “flexicurity” model continues to support a high degree of labor-market mobility, with training and assistance provided to the unemployed. However, the unexpectedly quick recovery has led to a resumption of concern over labor shortages. Policymakers are considering easing rules on labor immigration from non-EU countries.

The tax burden is high, with income and VAT taxes dominant. Environmental taxes are increasingly in use. The government has run budget surpluses outside the context of the pandemic emergency, and overall debt levels are low by EU standards. Strong IT skills in the labor force have made the economy competitive, but R&D investment has declined.

With a flexible, 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.

The country has a universal tax-funded healthcare system with services provided free of charge. The pandemic was a severe shock for the sector, producing a large backlog of patients awaiting treatments, and intensifying wage tensions.

Recent reforms have helped improve education outcomes after a period of mediocre student scores on international tests. Most social transfers have been reformed to strengthen work incentives. Poverty and inequality rates are low but have risen in recent years.

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.

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. Direct greenhouse-gas emissions have fallen about 20% since the mid-1990s, and the country has committed to a 70% reduction by 2030 compared to 1990 levels, and to reaching climate neutrality by 2050. More than 30% of the county’s primary energy supply comes from renewable sources.

All parliamentary parties have approved an agreement aiming to produce 100% of electricity consumed in Denmark from renewable sources by 2030. Offshore windfarms are planned, taxes on electricity are to be reduced, and money has been budged for promoting green transport.

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.

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. Media freedom is protected by a strong norm of noninterference. Most private publications tend to be conservative or liberal, with left-leaning views underrepresented. Adherence to the rule of law is strong. Courts are independent and powerful, and corruption very rare.

Civil rights are widely respected, and the country has been at the forefront of issues such as ensuring the rights of sexual minorities. Some gender-based discrimination exists with regard to wages and career options. Immigration rules have been tightened several times over the last decades.

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 is unchanged relative to its 2014 level.

Long-term strategic plans play a strong policy role. The Ministry of Finance plays a key role in coordinating planning. Ministries are fairly autonomous, with policy coordination taking place in cabinet and coordination committees. A Political Secretariat associated with the Prime Minister’s Office helps coordinate ministry actions. 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. The advanced state of digital transformation helped minimize service interruptions during the pandemic.

Regulations are fairly enforced, with substantial checks and balances. The decentralization of responsibilities including healthcare has been controversial, but municipalities and regions have been given greater funding to perform their welfare and education tasks. An ongoing debate has focused on reducing bureaucracy.

Marked by mature and well-functioning oversight mechanisms, Denmark’s executive accountability score places the country in the top ranks internationally (rank 4). Its score on this measure is unchanged relative to its 2014 level.

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 noneconomic interest organizations are typically sophisticated, and often have a strong influence on policy, while still being oriented toward the consensus tradition. Major interest organizations are often members of committees and commissions tasked with preparing legislation.