ABSTRACT
This chapter describes the domestic institutions through which internal and external demands are processed and the foreign policy decisions that are made in the Nordic countries. It discusses at a very general level the main domestic influences on the making of foreign policy in the five countries. The three Scandinavian countries are constitutional monarchies, whereas Finland and Iceland are republics with presidents serving as heads of state. In Iceland and the three Scandinavian countries, the governmental body chiefly responsible for the making of foreign policy is the cabinet, which in turn is responsible to parliament. From an economic point of view, agriculture is most important in Finland and Denmark and least important in Iceland and Sweden. With foreign trade accounting for about one-third of the net factor income, external economic relations become the most important aspect of domestic as well as foreign policy in periods of military stability and noncrisis.
