The Danish model and flexicurity

When Per Kongshøj Madsen, one of the fathers of the flexicurity Danish model, from the CARMA centre of the University of Aalborg, writes an excellent synthesis about flexicurity and the Danish model. You will learn what are the 4 pillars of flexicurity, and have a balanced view on the Danish model, far from the excessive views of those who worship it and those who hates it. This paper has been prepared for the European Employment Observatory, and is a Danish contribution to the EEO Autumn Review 2006 ‘Flexicurity’.

Introduction

The period since 1993 has been a ‘golden age’ for the Danish labour market. In 2006, recorded unemployment was at its lowest level since 1975, and the employment rate is now the highest in the European Union. This has attracted a good deal of international attention. Thus OECD has cited the Danish combination of a flexible labour market and high social security as a role model for other European countries (OECD, 2004, chapter 2). In connection with EU’s employment strategy, and in individual EU countries such as Germany and France, Denmark has been used as a textbook example of how a member country can combine a dynamic economy, high employment and social security. In the international debate on flexicurity – or ways of combining labour market flexibility and social security – references to Denmark abound (Wilthagen 1998; Wilthagen and Tros 2004; Madsen 2003; European Commission, 2006, chapter 3).

Small is Resilient–the Impact of Globalization on Denmark

Small is beautiful, small is resilient: it is really interesting to see that a small country is sometimes better at facing globalization than bigger ones. The example of Denmark, in this article from , KlausNielsen and Stefan Kesting publish in 2003 in the review of Social Economy, is teaching a lesson for our governments.

Abstract
The aim of this article is to investigate the impact of globalization on the Danish economy. We focus on four possible influences of globalization and European integration (as one of the expressions of globalization) which are widely discussed in the scientific discourse on this topic and appear to be relevant for the Danish case. These dimensions are the reduction of the repertoire and effectiveness of national economic policy, the pressure for industrial restructuring, the seemingly required welfare retrenchment and the ideological implications of globalization as a predominant neo-liberal discourse. On the one hand we discuss Denmark as a typical example of a small European state and a Scandinavian welfare state regime, on the other hand we put emphasis on its nation peculiarities. The article shows that Denmark changed and adapted successfully to challenges of globalization while keeping the core of its particular form of the Scandinavian welfare model.

In addition, both its smallness and its distinctive national characteristics equipped Denmark well to turn the impact of globalization into a successful strategy for survival. However, there are indications that the translation of neo-liberal ideas in the Danish negotiated economy will lead to political disruption that challenges fundamental features of the model. Whether this may undermine the dam that had hitherto held back the globalization pressures in the Danish context and secured a response in accordance with the inherited characteristics of the Danish model remains an open question.

Introduction
There is an extensive literature on the impact of globalization on the autonomy of nation states, social democracy and the welfare state. Much of this literature seems to agree on the fact that globalization has reduced the importance of national boundaries for economic transactions and has asserted structural pressures for change. However, there are diverging views about the overall effects of these changes. Some argue that the forces of global competition lead to reduced state spending and state intervention, more “market-friendly” policies, and the demise of social democracy and the modern welfare state (e.g., Garrett and Lange 1991, Gill 1995, Cox 1997). Others argue that the social and political impacts of globalization vary significantly dependent on the mediating role of the institutions of nation states (e.g. Hirst and Thompson 1999, Weiss 2002, Kjaer and Pedersen 2001). A growing literature, drawing primarily from an institutionalist perspective, stresses the growing empirical evidence of a wide variety of nation specific trajectories of national welfare and industrial-relations institutions and their path-dependence (Esping-Andersen 1996, Berger and Dore 1996, Crouch and Streeck 1997).

The predominant view seems to hold that economic globalization exposes all nations to policy constraints with the strongest pressures coming to bear on small nations who are more economically vulnerable. Yet this view is not uniformly held. Based on her review of three areas of economic policy and intervention–taxation, fiscal spending and industrial policy–Weiss (2002) concludes that the state has much more room for maneuvering than what she calls the “constraints school” seems to assume. She argues that globalization has even “enabling” effects, and that small states are not necessarily more “constrained” and less “enabled” by globalization than larger states. Size matters less. What matters more is the character of national domestic institutions.

Denmark is an interesting case in this respect. As part of the Scandinavian vanguard model of social democracy with its high-tax, high-spending regime, strong labor market policies, high income equality and equal wealth distribution, Denmark would seem a prime candidate for declining autonomy in the era of globalization. Furthermore, the Danish industrial structure has often been characterized as lagging, vulnerable and pre-Fordist, especially in comparison to its Scandinavian neighbors (Mjoset 1987). In recent years. however, Denmark has been viewed by some as a model for maintaining high aspirations of welfare and social democracy despite the challenges of globalization (Nielsen 2001).

The full article on the web

The European Social Model (ESM) and cultural diversity in Europe

This analysis, from Jean-Claude Barbier, is a working paper from the Department of Economic, Politics and Public Administration of Aalborg University, already well-known for our readers. The idea of referring to cultural diversity in order to analyse the European Social model is an interesting one, and, even if it not stricto sensu a Nordic work, I feel that it is interesting for all our readers.

Introduction

In the past forty years a voluminous body of literature has been published to analyse the phenomena of European integration, Europeanization, convergence and diversity of all kinds of institutions and social practices across states that are members of the European Union. A long journey was made from the first studies, like for instance Ernst Haas’s who, in 1968, revisited his 1958 theory of ‘spill-over’, after General de Gaulle, to him, had changed the conditions of European integration, because he was “a true nineteenth nationalist” (1968: xviii). Spill-over, Haas thought in 1958, in the first edition of his book, was inevitable: it was, he wrote, “unlikely that the General Common Market can avoid a species of political federalism in or-der to function as an economic organ” (1968: 317). Why “political federalism” has still to really emerge in the present conditions remains to be explained and we will deal with only one small angle to this question, namely, the special case of the ‘social dimension’ of European integration.

We will contend here that, despite the immense change brought to Europe by the 50 years of initiatives started by the 1957 Treaty of Rome, despite the crucial aspect of ‘negative integration’ (Scharpf 2000) and the increasing homogenisation of elites through their cross-national socialisation, ‘political cultures’ still matter to such an important degree that they preclude, and probably will preclude for a long time, the very possibility of actually implementing the basic process and practices that ‘solidarity’ demands, under the now classical institutionalised forms of ‘social protection’ (Barbier and Théret 2004).

Comparing Flexicurity in Denmark and Japan

As usual, an interesting comparative study from the famous Danish Centre for Labour Market Research at Aalborg University (CARMA), where Thomas Bredgaard (assistant professor, ph.d.) and Flemming Larsen (associate professor) are comparing two types of labour markets, in Denmark and in Japan. A good opportunity to develop your knowledge on the japanese labour market, which will surprise you.

Two decades of structural reform in Denmark: a review

You are a President, or a Prime Minister, you have worries. What if somebody gives you the miracle remedy to get your people rich, among the richest in the world, to put down poverty, to reduce inequalities, with a health insurance for all, and, yes, no inflation, an unemployment at such a low level that the employers ask for a lot more immigrants? So, go to Denmark, or read what Søren Gaard and Mads Kieler from the Danish Ministry of Finance have to say about how Danes did it.