Budgetary Reform in Denmark in Times of Austerity

Abstract

This chapter presents an analysis of the background, content and consequences of the organic 'Budget Law' that was passed by the Folketing, the Danish parliament, in 2012, taking effect in 2013. It discusses that the crisis was used as a 'window of opportunity' by actors representing the government's administrative budget guardian, the Ministry of Finance, to find support for legal instruments that had been under consideration for decades but hitherto not found political support. The chapter addresses the background of the Budget Law and its consequences for both financial management in central government and the institutional arrangements for controlling aggregate expenditure in the 98 municipalities that have independent taxing rights and are responsible for a broad portfolio of welfare services, environmental services and infrastructure. It describes the budgetary institutions and reform trajectories preceding the crisis. The chapter presents an analysis of the budgetary reforms that were adopted in the years 2010-13. It discusses how the reform has changed public management.