The Danish “Miracle”

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Abstract
The 1980s and 1990s saw employment “miracles” in Denmark, Australia, and the Netherlands. This article analyzes the dynamics and substance of Danish policy responses to poor export, employment, and fiscal performance to see whether remediation should be attributed to pluck (intentional, strategic remediation of dysfunctional institutions to make them conform with the external environment), luck (environmental change that makes formerly dysfunctional institutions suddenly functional), or just being stuck (endogenous, not entirely strategic change that leaves institutions in conformity with the environment). It addresses these issues to remedy biases in the literature toward Sweden-as-model, toward pessimism about the welfare state's survivability, and toward privileging intentional action. The analysis finds that stuck (endogenous dynamics) probably explains as much as pluck (strategic choice), suggesting only limited transferability for policy lessons from the miracles.