GOVERNANCE IN DENMARK – HOW WAS IT CONSTRUCTED AND HOW DOES IT WORK?

GOVERNANCE IN DENMARK – HOW WAS IT CONSTRUCTED AND HOW DOES IT WORK?

Dr Bo Lidegaard, Editor-in-Chief Politiken, diplomat, historian and writer

 

In Denmark we have no recent experiences with revolution – or with foreign rule – except the five year German occupation during WWII.   And yet, our 20th century was marked by three revolutions, each of them turning society upside down.  None of them were violent – but all of them left society and governance altered to their very foundations.  Though very different in nature – all three revolutions were about inclusion and governance.

The Farmers

The first revolution was driven by the Danish farmers in the decades leading up to 1900.   We had our democratic constitution in 1849 but the King and the Conservatives didn’t trust the majority of peasants to rule.  So, they stuck to power regardless of the majority in Parliament, ruling by provisional decrees.

Meanwhile, globalization meant a sharp deterioration of their competitiveness on the world market and their traditional trade all but collapsed.  Their answer was deep reform, a complete change of cultivation methods, organization – and education.  The farmers formed cooperatives and went up market with dairy products, created their own political parties, insisted on acquiring knowledge and sought what they termed “enlightenment” and adult education.   Equal access to education has since been a centre piece in Danish politics.

By the turn of the century, it became untenable for the Right to exclude the majority of the people from power and by 1901 the farmers’ party took control of society.  This meant deep reforms of government and administration – but also that control of the Parliament was now suddenly in the hands of “the left” with radical reform programmes, including constitutional reform.  The farmers revolutionalized and transformed society, reform by reform, thus also enhancing their own sense of ownership.

The Workers

Even, as the farmers were consolidating their grip on the governing machinery, another underprivileged and revolutionary force mobilized to become a major political actor.  The Labour movement organized the workers in the cities and established their own political Party, the Social Democrats.   At the beginning of the century, their main request was constitutional reform and in their last major alliance with the farmers, they achieved a new constitution by 1915 paving the way for voting rights for women and for the poorest.   By that reform, democracy developed truly into a “people’s rule”.

From WW1, the Social Democrats strongly rejected the more radical forces on the left, including  the Bolshevik’s, their main argument being that the democratic rights so hard won by the workers should never be compromised.   But the workers were deeply sceptical of the governance system and the state apparatus.  They considered the state to be conservative and dominated by the farmers.   Inspired by the popular movements of the late 19th century, they invested heavily in upgrading the education of their members.   More often than not, you would see the trade unions organising courses and adult education training courses.  The Party knew that taking on power would require more knowledge.   Again, equal access to education became a top priority.

By 1929, the Social Democrats formed for the first time a majority coalition government with a small centrist political party.  Their agenda was oriented towards creating employment and avoiding the downfall caused by the world crisis.  There is a strong symbolism in the fact that the Social Democrats and the Farmers’ Party – alongside with a few smaller political parties – negotiated and concluded a major economic and social reform programme on the very night Adolf Hitler was appointed Chancellor in Germany.   Leading politicians made it explicit: We want to prove that, in our country, Parliament can provide the answers and that we need no strong man to do so.

Part of the response was nation building and gradually, the Social Democrats took ownership of the state and transformed it into an instrument for the implementation of their political and social ambitions.   Still, government was small and not really in touch with the economy or the citizens.

Planning the Future

Modern society came with the post-WW2 Marshall Plan Programme necessitating more planning and stronger governance.  Economists were brought into central administration and began to plan for years ahead.  The result was an ever stronger participation of government in the economy – not by ownership of enterprises or subsidies, but by planning government spending in such a way as to counter the cyclical nature of the capitalist economy.

By the early 1960’s,  Denmark ventured into three new projects: we began our approach to co-operation with the European Market  – in tandem with our main agricultural export market, the UK – whilst aiming at the same time to become part of the huge continental, i.e. German, market for industrial products.  We began to collect taxes in a much more systematic way, both direct income taxes and VAT.   And we began to build governance that was responsible to the citizens not only (and, perhaps, not most importantly) in a legal and constitutional way, but in terms of providing the public services the tax-paying citizens expected to get in return for their ever increasing taxes.  This entailed a very high degree of accountability: you simply cannot get people to pay high taxes unless they feel somewhat comforted that the services they get work for themselves and for their families.  To achieve this, an effective, professional administration had to be built – one responsive to the demands and expectations of the citizens.

Women 

The economic engine of growth, public spending, and social security, allowing growing flexibility in the labour market, higher education and better qualifications began to work effectively in the 1960’s.   Everyone got better off and there seemed to be no end to it.  Governments, on the left and right, overspent and got away with it – public expenditure kept growing as did the size of public administration. The demand for labour seemed endless.

This created the ideal conditions for the third revolution of inclusion: women insisted on not only being part of the labour market, but also on obtaining rights and influence and taking control of their own lives.  The 1970s–90s saw a revolution as far as women were concerned.   And make no mistake about it: no family was left untouched – life in society changed radically.  The place in society of men, women and children changed utterly.  Gradually, better educated women made their way into every branch of society and the ratio of women in the professions soared.

The Fragile Balance

By the turn at the century, Denmark, together with fellow Scandinavian countries, held several interconnected global records:

  •          Highest employment ratio – (because of women!)
  •          Highest number of citizens on public allowances (the flexible labour market)
  •          Highest taxes (to finance public expenditure and govern it)
  •          Highest percentage of the economy ploughed into the public accounts
    (within a very open and liberal economy)
  •          Top five competitive countries in the world
  •          Top 10 highest income/education etc.

To some this represents a model of all embracing socialism, where the individual has lost the responsibility for his or her own life and where high taxes and heavy regulation undermine the quest for brilliance and entrepreneurship.

To others, the Scandinavian welfare societies are the fulfilment of the American Dream.  Here, the individual is freed from his or her social bondage and free to develop personal qualifications and pursue individual ambitions.  Champions of the welfare state will point out that individuals thus freed are not any less socially responsible or less inclined to take social responsibility vis-à-vis themselves or their families.  Rather, the reverse is true.

Be that as it may, the centre of gravity in the Danish political system is not about welfare.   It’s about what policies are most likely to preserve and enhance this system while keeping Denmark ahead in an open and competitive global economy.  The political Right will claim they can provide more welfare with lower taxes.  The Left will declare that they can engineer yet another leap forward in education, research and employment.

How Does It Work?

At least three separate factors are closely interacting to make this possible:

Firstly, the three subsequent generations of inclusiveness revolutions in the 20th century – farmers, workers, women – have created a strong sense of ownership in the government as well as the confidence that government ultimately represents not their own interests but those of everyone. It is not easy, of course, and control is tight with very rigid rules and accounting. ALL public spending, including salaries, allowances, accounts etc, is tightly controlled. We have a very restrictive interpretation of “what is necessary” and insist, for example, that also elected politicians spend their own private money for private purposes.

Secondly, with no single party being able to mobilize a majority in Parliament, coalition government is the general rule.  This entails that the Government has to work very closely with the political parties and Parliament – otherwise it will not remain in government for long.   In Parliament the real work is done in the Committees, preparing legislation and creating a sense of common cause between the members across parties.  If a hostile majority in Parliament is turning government policy down, most often the government will resign leaving the majority to form a new government. This mechanism injects a degree of responsibility also into the opposition. Furthermore, the system is based on long term compromises anchored in broad majorities that will survive elections. This enhances continuity and protects against narrow, particular interests and creates a strong incentive for political parties to join broad compromises – as it entails a de facto veto on subsequent change. More often than not, such compromises are anchored in national debates paving the way for joint policies that no major political party dares to oppose e.g. pricing fresh water or energy.  There is no one above and no one at the level of the Folketing.

Thirdly, big government is a stabilizing factor in its own right.  The vast, non-political civil administration is a strong nation building factor, recruited from the entire country and with no other obligation than “making it work” without regional or electoral bias.  The civil service is by nature opposed to radical change – but sensible to satisfy the wishes of elected politicians and work within the dynamics of politics.  Moreover, the administration is divided into the national and the local level.  The national level sets rules, standards, frameworks and limits on taxation and a lot of other regulatory stuff. The local level – political as well as civil administration – is the big provider.  They are supposed to deliver most of the public services you are entitled to receive as a citizen and the local politicians will be judged by their ability to deliver quality of services over and above the minimum standard set at the central level.

Conclusion

In all areas, of course, our society and delicate balances are challenged and none of the above preconditions are stable or unquestioned. On the contrary – and political debate in Denmark can be as nasty as anywhere else.  Warning signs are everywhere – and we struggle to keep aloof.

It will comfort you to know, that just as you are critical of the shortcomings of the Irish political system, so are we in regard to the Danish system.  Despite the harsh criticism of your political elite, I interpret your willingness to face and discuss the problems as a token of the health of your democracy.   Much may be wrong in the state of Ireland, but not your courage to address the shortcomings – nor your determination to act.  That’s what commands sympathy for the difficulties you have been facing and respect for the actions you have been taking.

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