Politics Against Economic Models: How Economic Models and EU Rules Disarmed the Politicians and Saved the Economy of Denmark

The paper uses Denmark as its case show how a combination of supranational institutions in the form of EU-regulation and black boxed institutions in the form of economic models from the 1970’s up till today shape the room of maneuver for government’s economic policy. Both the EU legislation as well as the economic models effectively decouple the economy from national politics and limit the room of maneuver of politicians who are bound by rules they have created but which are now often beyond their reach. The Danish politicians made a political choice to de-politicize the economic policy to save the country’s economy after a period of economic chaos. The paper argues that this institutional development has important implications for our understanding of the relationship between capitalism and democracy.