From Public to Private? An Examination of the Danish Privatization Policy from 1988 to 2015

Peter Jespersen-Kaae & Nichlas Rønne Vind

Student thesis: Master thesis

Abstract

The primary purpose of this study is to examine why and how the Danish privatization policy has developed from 1988 to 2015. As an academic field, privatization of state-owned enterprises (SOEs) has been neglected in recent years, but with the massive public debate surrounding the private placement of DONG Energy shares in 2014 the question of public ownership once again surfaced. Through qualitative case studies of the privatizations of CPH Airport, Tele Danmark and DONG Energy, the thesis analyzes the development of privatization policy through the scope of Historical Institutionalism (HI) using a critical realist mode of reasoning. The analysis entails a classical HIapproach to studying institutional change through exogenous shocks and path dependence as well as through endogenous developments explained through gradual changes. It was concluded that European movements and increasing EC/EU pressures favoring privatization of SOEs constituted an exogenous shock for the Danish privatization policy in the late 1980s. The findings suggest that the Danish privatization policy was then ‘locked-in’ and path dependent without any further exogenous taking place for the remainder of the period. Thus, the thesis rejects the financial crisis of 2008 as a critical juncture for the privatization policy. The thesis, however, shows that endogenous gradual change of the privatization policy also occurred. The institutional environment provided the conditions for layering of the policy to take place, which dominant change agents promoted. In turn, old policies protecting SOEs were seen as inefficient, and a shared consensus on privatizing and promoting active state ownership was established gradually. Further, the privatization policy became more pragmatic through gradual changes influenced by political change agents independent of political and ideological affiliations. In sum, the analysis shows why sudden change of the Danish privatization policy occurred and how it developed from 1988 to 2015. Theoretically, the thesis contributes to contemporary institutionalist debates by supporting how a classical HI-approach can be combined with frameworks for understanding institutional change through gradual changes. Finally, the findings of the thesis suggest future research should be conducted in order to assess implications of privatization for the Danish political economy.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2016
Number of pages132