ABSTRACT
The year of 1982 was in many ways a path-breaking year for the Danish welfare state. The problems of the Danish economy, which had been mounting since the first oil crisis, had turned into a severe economic crisis with high unemployment, high inflation, a government budget deficit and a huge current account deficit. Denmark was at the brink of the economic abyss (Nannestad and Green-Pedersen 2008). In September, a centreright government replaced the social democratic government and came into office with a strong determination to get the Danish economy back on track and implement the necessary measures, including cutbacks in the welfare state. The year of 1982 is therefore a natural starting point for assessing the development of
the Danish welfare state. As is the case for most welfare states, the Danish one forfeits simple conclusion in terms of its development. A number of reforms and retrenchment have taken place since 1982, but their significance depends very much on the analytical perspective from which they are evaluated. Still, it is hard to argue that the Danish welfare state in general has experienced a major roll-back since 1982, as the welfare state also has been further expanded during the last 20 years. The Danish case is very much in line with Paul Pierson’s (1994, 1996) view of welfare state retrenchment as the politics of blame avoidance. As we will show below, the Danish welfare state enjoys strong support from the electorate – it is highly politically entrenched – and suggestions of retrenchments with no further justifications than an ideological protest against the universal welfare state and its high tax levels are among the least politically viable policy initiatives in Denmark. However, the economic problems that existed in 1982 and continued a long way into
the 1990s provided, as we will show in the following, opportunities to justify reforms and retrenchment. Controlling public expenditures have moreover been an important preoccupation of Danish governments, which also affected welfare state schemes – especially when it provided possibilities of retrenchment ‘by stealth’. This has been the case with for instance welfare state services because of their decentralized governance structure.
