Minority Governments and Party Politics: The Political and Institutional Background to the “Danish Miracle”

The successful performance of the Danish economy in the 1990s has encouraged scholars to talk about a “Danish miracle”. This article investigates why Danish governments have been able to govern the economy so successfully in the 1990s. It argues that two factors have been important. First, the bargaining position of minority governments has been strengthened. Today, Danish minority governments can enter agreements with changing coalitions in the Danish parliament, as a result of changes in Danish party politics and in the functioning of Danish parliamentarianism. The article thus challenges the conventional wisdom about minority governments as weak in terms of governing capacity. Second, the changed socio-economic strategy of the Social Democrats returning to power in 1993 has been important, because it has created a political consensus around a number of controversial reforms.