Danish Deregulators

How Denmark revamped its telecom regulations


Le Petit Modificateur Laborieux

If you're interested in the shift from Scandinavian social democracy to Nordic neoliberalism (*), you should check out Roslyn Layton and Joseph Kane's new paper on Denmark's deregulation of the telecommunications industry. The Danes, they inform us, have not just shed the state's telephone monopoly but disbanded its telecom regulatory agency, refused to let the government fix telecom prices or push particular telecom technologies, and mostly avoided telecom subsidies.

As is often the case with reforms described as deregulatory, some of these changes did more to rearrange the state's role than to reduce it. (That regulatory agency, for example, had its duties distributed to other arms of the government.) And some weren't really changes at all. ("In Denmark's history there are only three instances of telecom subsidies," Layton and Kane write, "and they are for extremely small amounts targeted to remote areas.") But the net effect was less intervention in the marketplace, not just compared to the past but compared to nearby nations. Despite all the recent liberalization in Sweden, for example, the government there still owns a piece of the country's dominant telephone company.

In any event, it's an interesting case study. It used to be a cliché to suggest that socialism works better in Scandinavia than elsewhere. The best argument that that's true may be the ease with which Scandinavian socialists have moved toward markets.

(* I hate the word "neoliberalism," but alliteration must prevail.)