How New Economic Ideas Changed the Danish Welfare State: The Case of Neoliberal Ideas and Highly Organized Social Democratic Interests

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    Abstract

    The article argues that new economic ideas have exerted an independent causal effect on policy change in three major areas in the Danish welfare state; unemployment insurance, early retirement and taxation. Thereby the Danish case bears resemblance to the paradigmatic shift from Keynesianism to monetarism in the UK. However, in the Danish case this paradigmatic shift did not coincide with a political shift to a right-wing government. This makes it possible to disentangle the intimate relationship between ideas and interests. It is argued that the Danish case provides one of the clearest examples of the independent causal effects of economic ideas because the Social Democrats pursued policies that compromised with the party's historically rooted positions and with the preferences of their electorate. Ideas and solutions did not come in one fixed package, however. But the new paradigm established some basic premises that were not up for discussion.
    Original languageEnglish
    JournalGovernance. An International Journal of Policy, Administration and Institutions
    Volume22
    Issue number2
    Pages (from-to)239-261
    ISSN0952-1895
    DOIs
    Publication statusPublished - 2009

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