Small is Resilient—the Impact of Globalization on Denmark

Abstract

The aim of this article is to investigate the impact of globalization on the Danish economy. We focus on four possible influences of globalization and European integration (as one of the expressions of globalization) which are widely discussed in the scientific discourse on this topic and appear to be relevant for the Danish case. These dimensions are the reduction of the repertoire and effectiveness of national economic policy, the pressure for industrial restructuring, the seemingly required welfare retrenchment and the ideological implications of globalization as a predominant neo-liberal discourse. On the one hand we discuss Denmark as a typical example of a small European state and a Scandinavian welfare state regime, on the other hand we put emphasis on its nation peculiarities. The article shows that Denmark changed and adapted successfully to challenges of globalization while keeping the core of its particular form of the Scandinavian welfare model. In addition, both its smallness and its distinctive national characteristics equipped Denmark well to turn the impact of globalization into a successful strategy for survival. However, there are indications that the translation of neo-liberal ideas in the Danish negotiated economy will lead to political disruption that challenges fundamental features of the model. Whether this may undermine the dam that had hitherto held back the globalization pressures in the Danish context and secured a response in accordance with the inherited characteristics of the Danish model remains an open question.