The Danish Model - a European success story

Denmark has become a role model not just for the European Union, but also on the global arena. Numerous delegations have come to visit this little country which seems to have found an exceptionally successful combination of a dynamic economy and social security. On the one hand Denmark shares a range of features with the other Nordic welfare states consisting of a high degree of economic quality and security for its citizens. However, on the other hand Denmark has a dynamic labour market and a great adaptability for changing external conditions, which is traditionally associated with more liberal market economies.

The interest shown in the Danish model gathered speed when Denmark in the early 1990’s stood out from the remaining EU and in a few years reached an unemployment level far below the European average. As a result many foreigners also believe that Denmark at the time invented a unique societal model, which we later began to marked – often headlined as “flexicurity”.

Therefore, the strength in Mogens Lykketoft’s writing on “The Danish Model” is that it accentuates the long lines in the development of Danish society. For foreign delegations such a narration may seem disappointing. The Danish model is not to be copied in a quick pull. But when the disappointment is surmounted, they after all realize that there is inspiration to be found in e.g. an emphasis on lifelong learning, an ambitious active labour market policy or an extended public service which won’t hamper, but on the contrary contribute to growth and affluence.

For the rest of us the narrative about the long lines contributes to emphasize the strength and cohesion in the Danish model.
It is not a party marquee set up for a shindig in the summer heat but a solid building, which has lasted for many decades.

Thus not said that the Danish model is invulnerable. The many balances between flexibility and security, which marks our society, must constantly be maintained and adjusted. Reforms can be well founded. But they can also cause damage, if they are implemented in a rush or on ideological grounds without respecting the interaction between the different parts of the model. This is where the historic outline will sharpen the awareness as to the value of the institutions and tradition for cooperation, which composes the main pillars in the model.

That is why Mogens Lykketoft’s analysis is an important contribution to the debate about the development of the Danish model – also in a forward-looking perspective.

Copenhagen, December 2009

Per Kongshøj Madsen
Professor in Economics
Chairman of AE - The Economic Council of the Labour Movement