The negotiated economy: State and civic institutions in Denmark

As the tide of opinion turns against neo-liberal forms of economic governance on grounds of both efficiency and equity, academic and policy interest is returning to more interventionist alternatives. Interestingly, however, the interest appears not to lie with a blind return to old and familiar statist forms of intervention, but with a 'third way' beyond market and plan, involving the democratization and decentralization of decision making, the preservation of collective solidarities, emphasis on inter-institutional dialogue, and the shift of the state towards relations of reciprocity and trust with other governance institutions. This article examines the recent political economy of Denmark, as a good example of 'negotiated economic governance' based on the principle that economic success, social solidarity and institutional pluralism can be combined within an overall policy context in which the state assumes a strategic and developmental role in the economy.