The official policy of gedogen - roughly translated as ignoring anything which isn't convenient - has made Amsterdam what it is today. Gedogen is "the supreme manifestation of the Netherlands' traditional tolerance of everything from religion and race to sex and drugs".
It all dates back to the development of Amsterdam as a centre of international trade,which made the Dutch outward looking and open to foreign ideas and cultures. Jews were welcome in Amsterdam - provided they kept to certain trades and buried their dead outside the city walls.
After the Alteration, when Catholicism was banned, Catholic churches continued to flourish. Now you are not telling me that no-one wondered what was going on when queues of people turned up outside what is now the Amstelkring on a Sunday clutching their prayer books. But as long as the there was no outward manifestation of popery... well, you could just pretend it wasn't happening.
Today, the policy not only most famously legitimises coffee shops (it is illegal to sell or carry hashish or smoke joints) but it extends across all areas of life. For example, special areas in parks where dogs are allowed of the lead are known as gedoogzones. Euthanasia is not legal either, but ignored providing strict guidelines are adhered to.
These days, however, the policy is coming under increasing attack. After a number of corruption scandals - such as the massive building trade fraud - there has been a lot less 'turning a blind eye' to infringements of the law. Because the bottom line is, gedogen is not really about being tolerant. It's about avoiding the issue. The decriminalisation of soft drugs, for example, is highly convenient but deftly avoids the issue of how drugs get to the coffee shops in the first place.