Why Denmark is a great nation

As I recently stated here in a blogpost dealing with the Sustainable Development Goals, I’ve lately kept returning to the topic of what makes a nation great. Some leaders – consider Vladimir Putin of Russia – emphasise military strength and foreign-policy clout. All too often they miss an important point, however. Inclusive prosperity stabilises a country’s political system, leads to a strong sense of national solidarity and lays a basis for further healthy developments. This is a form of greatness that matters very much.Lately, leading politicians of the USA have tackled this issue too. Bernie Sanders, who declares himself to be a socialist and wants to become the presidential candidate for the Democratic party in the USA, recently declared that Denmark is what he considers a good society. This choice is interesting, not least because Denmark has mostly been ruled by centre-right governments in the past two decades. At the same time, Denmark is certainly great in the sense of broad-based and shared prosperity. By the way, Hillary Clinton, Sanders’ main rival and the most likely person to win the nomination, said she “loved” Denmark.

Vox.com, an innovative website that specialises in what it calls policy journalism, summed up what Democrats like about Denmark:

• People on the left in the United States and other English-speaking countries are fond of citing the Nordic states – Denmark, Sweden, Norway, Finland, and Iceland – as examples of countries with higher taxes and less inequality than Anglophone nations that nonetheless enjoy a high level of prosperity. Of the five Nordics, Denmark is the second richest. Norway, the richest, has a ton of oil and gas relative to its tiny population, so it doesn't seem like quite as good a model to cite as Denmark.
• The Nordics also tend to score very well on subjective measures of well-being like happiness surveys.
• Danish mothers enjoy 18 weeks of guaranteed maternity leave at 100 % of their ordinary pay. Danish students leave college free of debt. Everyone is covered by a national health insurance system and can take advantage of subsidised child care; plus, thanks to a generous welfare system, Denmark’s child poverty rate is about a quarter of America’s.
• Denmark is also an environmental model, a country in which 25 % of electricity is generated by wind turbines; bicycles account for 40 % of commuting trips in Copenhagen.
• In a world where Republicans routinely deride taxes and spending as job killers, income redistribution as the mother of indolence, and tax cuts as a growth miracle, quietly prosperous Denmark stands as a powerful counterexample.

As www.vox.com assesses accurately, Denmark and the other Scandinavian countries prove that free-market radicalism is empirically wrong. No, high taxes do not necessarily drive away achievers,  social protection does not make everybody else become lazy and, yes, governments services can be efficient and effective. What makes Scandinavian nations great is not that they have abandoned capitalism, but that they regulate markets intelligently, and that obviously has a bearing on development policies. While it is necessary to have a strong private sector, as all Scandinavian countries have, state institutions matter too, and not only in the sense of ensuring the rule of law. Building social and physical infrastructure matters as well.

This is easier said then done, however, because strong institutions are needed. Building such institutions, from national revenue services to good primary schools, is a major developmental task. It must not be postponed until the private sector supposedly makes a nation rich, it must be tackled early on because success will make the private sector stronger, not weaker.

• Full disclosure: With my wife and kinds, I spent my summer vacations in Denmark. We liked it a lot, but the country is not a substitute for paradise. For example, I find the current government’s xenophobic stance on migrants and refugees worrysome, and the Social Democrats’ stance in the past election was not that different.