Why and how has privatization policy of Danish SOEs developed?
This thesis has set out to answer the questions of why and how privatization policy of Danish SOEs has developed. Through our theoretical, empirical and analytical findings, we are now able to clarify the development of privatization policy in Denmark from 1988-2015.
In our first analysis, based on classical HI-theory, we assessed why the Danish privatization policy developed and identified key actors who affected the processes based of the cases of CPH Airport, Tele Danmark and DONG Energy. We find that the European movements in the 1980s, including the increasing pressures from the EC/EU, caused an environment where privatizations of SOEs became a valid policy tool in Denmark. As such, these movements were identified as the critical junctures that set the path for transforming SOEs through privatization. Through the three cases, we find that this path became dominant throughout the 1990s and 2000s, and even remained
“locked in” after the financial crisis hit in 2008. The case of DONG Energy proves how the path of privatizing SOEs was institutionalized and locked, despite the massive attention given to the case.
The influence of the surrounding environment and the effects of exogenous shocks therefore remain the main key to explaining why privatization policy of Danish SOEs developed.
In the second analysis, we extended our framework with the concept of gradual change in order to assess how the Danish privatization policy had developed endogenously. The analysis showed how layering of the privatization policy could best describe the development where the institutional characteristics and political context of the privatization policy as well as the way in which the most important actors operated as subversives change agents created an environment supporting layering to take place. Through the three cases, we find that actors within the social regime saw old policies as insufficient, and that they had a shared consensus on SOE-policy which led to new alternatives. The answer to the question of how privatization policy of Danish SOEs has developed is thus that it has been affected by a gradual and cumulative transformation through layering, which cannot alone be described through the scope of classical HI-theory that relies on path dependence and critical junctures. In combination the two analyses answer the research question of the thesis, and detailed overviews of the key findings have been depicted in figure 5.8 and figure 5.10.
Page | 113 An important aspect of how we arrived at our conclusions is found in our choice of methodology and theory. A critical realist approach was applied to the qualitative case-based studies of CPH Airport, Tele Danmark and DONG Energy, in combination with the theoretical approaches of HI.
Existing literature within the field of privatization has mainly been based on economic factors and assumed that economic objectives of privatization are the most important, whereas our analysis supports how the institution of privatization policy can be grasped and interpreted by the use of HI-literature, in a way more suitable for drawing an overall picture of the developments. We find that the combination of traditional HI theory, Streeck and Thelen (2005) and Thelen & Mahoney (2010) frameworks of gradual change, complement each other and provide the evidence for answering the research question at hand in the most suitable way.
The essential empirical findings of the thesis constitute vital parts of our thesis, and we encourage that these are taken into consideration in future studies within privatizations of SOEs in Denmark.
One of the key findings is the rejection of the financial crisis being a critical juncture, which has otherwise been stated throughout literature and studies since 2008. We believe to have illustrated how this has not been the case in terms of privatization policy in Denmark, and that other factors are more important for explaining the changes of privatization policy. Some of these are the institutional context of privatization and the change agents involved in the processes, which constitute additional key findings of the thesis. The change agents involved in the privatization in the three cases were matched as subversives, being actors who seek to displace an institution, and proved to have a great influence in the processes. Further, the following rising criticism and
experience from former key actors, such as Poul Nyrup Rasmussen, has become dominant and a vital part surrounding the debates on active state ownership in SOEs. These findings all suggest that the field of privatization of SOEs is still highly relevant, and in combination with the
observation of a more pragmatic approach, where the ideological persuasion and political affiliation of the government in charge do not play significant roles, they invite to discussions on the role of the Danish welfare state.
In the discussion we briefly touch the issue on the development of the Danish welfare state, and while the findings of this thesis are too narrow to engage in thorough debate on whether Denmark is becoming more similar to a LME than previously, some of our findings indicate that Denmark indeed is moving towards a more hybrid economy. Combined with our findings from the analysis
Page | 114 the thesis thus also contributes to studies within international business and politics, where specific processes in the case of Denmark can be used as off-set for future research.
As our theoretical approach limits us in predicting the future outcomes of privatization policy in Denmark, we invite to further engage in the field of privatization in academic studies in the future.
What can be derived from this thesis is a recommendation of not limiting theoretical studies to classical definitions of HI, but to include ways of explaining how changes occur over time in the absence of external chocks. We consequently suggest that privatization of SOEs has academic relevance, and that the field contributes to the overall understanding of the development of policies and institutions in international business and politics.
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