Danish Economic Policy and Institutions in the Twentieth Century: From Laisse Fair to a Mixed Economy?

This chapter traces the origin of the most significant institutional change of the twentieth century in Denmark, the universal welfare statewelfare state. The chapter starts by examining the different events and inspiration that took Denmark further along the universal welfare state road. It shows that part of the explanation for the emergence of the modern welfare state might be found in a failed state situation after the Second World War. The chapter shows that the ultimate birth of the Danish welfare state is a relative late development. Further, it became economically ungovernable almost at birth and hence the last quarter of the century—and until the present day—is a story of continued reform on a possible broken foundation. Denmark’s journey from a liberal market economy to a consumption-oriented welfare state observed in the twenty-first century is a unique and interesting case of fundamental institutional change.