Finnish Public Administration: Nordic Public Space and Agency (Governance and Public Management) 3031348613, 9783031348617

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GOVERNANCE AND PUBLIC MANAGEMENT SERIES EDITOR: PAUL JOYCE

Finnish Public Administration Nordic Public Space and Agency Edited by Elias Pekkola · Jan-Erik Johanson Mikko Mykkänen

Governance and Public Management Series Editor

Paul Joyce INLOGOV University of Birmingham Birmingham, UK

IIAS Series: Governance and Public Management International Institute of Administrative Sciences (IIAS)—Setting the Governance AgendaWorldwide Website: http://www.iias-iisa.org Edited by Paul Joyce To cover the diversity of its members, the IIAS has set up four sub-entities: –– The EGPA (European Group for Public Administration) –– The IASIA (International Association of Schools and Institutes of Administration) –– The LAGPA (Latin American Group for Public Administration) –– The AGPA (Asian Group for Public Administration) Governance and Public Management Series This IIAS series of books on Governance and Public Management has a focus and breadth that reflects the concerns of the International Institute of Administrative Sciences. The Institute, which was set up in 1930, involves academics and governments from all around the world. The Institute’s work involves supporting both practitioners and academics, which it does by encouraging the production of relevant knowledge on public governance and public management and by facilitating its dissemination and utilization. It is the intention of the series to include books that are forward-looking, have an emphasis on theory and practice, are based on sound understanding of empirical reality, and offer ideas and prescriptions for better public governance and public management. This means the books will include not only facts about causes and effects, but also include ideas for actions and strategies that have positive consequences for the future of public governance and management. The books will offer a point of view about responses to the big challenges facing public governance and management over the next decade, such as sustainable development, the climate crisis, technological change and artificial intelligence (A.I.), poverty, social exclusion, international cooperation, and open government. All books in the series are subject to Palgrave’s rigorous peer review process: https://www.palgrave.com/gb/demystifying-peer-review/792492.

Elias Pekkola  •  Jan-Erik Johanson Mikko Mykkänen Editors

Finnish Public Administration Nordic Public Space and Agency

Editors Elias Pekkola Tampere University Tampere, Finland

Jan-Erik Johanson Tampere University Tampere, Finland

Mikko Mykkänen Tampere University Tampere, Finland

ISSN 2524-728X     ISSN 2524-7298 (electronic) Governance and Public Management ISBN 978-3-031-34861-7    ISBN 978-3-031-34862-4 (eBook) https://doi.org/10.1007/978-3-031-34862-4 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Paper in this product is recyclable.

The book is dedicated to a colleague and friend, Financial Counsellor Johanna Nurmi (1971–2021), who put her effort and energy into advancing public administration and research.

Preface

The idea of the book came about when familiarising ourselves with the other books in the IIAS Governance and Public Management Series, which provide an important source of knowledge from both theoretical and practical points of view. The elaboration of national developments within public administration is instrumental in terms of acquiring a global understanding of the machineries of government. The focal volume at hand deals with the functioning of the Finnish public administration from a policy point of view. It is based on the experience and expertise of scholars from Tampere University and includes insights from practitioners within the Finnish government. At Tampere University, administrative studies is the most extensive disciplinary unit involved in the research and education of administration in Finland. The educational and research fields represent administrative science, public finance, public law and regional and environmental studies. The disciplinary variety is well presented in this volume. It covers environmental policy, innovation policy, social and healthcare policy, local governance, financial management and performance management, along with issues in security, sustainability, human rights and local and regional governance. The volume contains some common themes across the individual chapters. First, there is an emphasis on goal-oriented action in government, aiming for its goals and catering to the needs of the population. Second, there is a shared aim to contextualise local activities in public administration with the changing Nordic and international landscapes. Third, while vii

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PREFACE

the volume offers an introduction to the basic parts of government and public administration, the orientation is to deal with the activities and reforms of governance instead of the structures of government. The volume has been compiled for international audiences. In view of the readership, we have aimed to keep the chapters short and simple. Thus, the focus is on the most relevant matters in Finnish public administration instead of on-the-minute details of civil servants fulfilling their duties. We aim to give students of public administration a research-based view of the cogs and wheels in operating a small modern democratic society in the northern part of Europe. In this sense, Finland reflects many of the aspects of the Nordic model together with Iceland, Norway, Sweden and Denmark. The Nordic model is characterised by a public sector that provides welfare services and a social safety net for its citizens. Together with sound public finances, the model has made possible an evenly distributed high standard of living, a high and equal employment rate and a high level of investment in education and research. Tampere, Finland  

Elias Pekkola Jan-Erik Johanson Mikko Mykkänen

Acknowledgements

Writing a book might be a solitary exercise, but editing one is group work in action. The authors of the chapters in this volume have generously put their minds and efforts into explaining a variety of aspects and developments in Finnish public administration. They deserve our humble gratitude not only for their excellent contributions but also for their patience with a project that eventually took much longer than initially expected. Further, Professor Ilkka Ruostetsaari offered his valuable expertise in reviewing some parts of the manuscript. As an IIAS editor for the series, Professor Paul Joyce urged us to compile a holistic perspective for the volume. He also encouraged us to invite civil servants and include practical perspectives as part of the project. We welcomed the idea gladly and are thus able to enjoy the insights provided by our respected colleagues in Finnish government: Financial Counsellor Katju Holkeri, Specialist Onni Pekonen and Senior Ministerial Adviser Timo Moilanen. We were able to count on the contributions from our Nordic research colleagues. Professor Per Laegreid kindly accepted the invitation to modify an article that he had previously compiled with Professor Carsten Greve, Vice-Director Nils Ejerbo and Professor Lise H. Rykkja to better suit the needs of this volume. We would like to extend our gratitude to the Faculty of Management and Business at the University of Tampere. We have enjoyed and benefited from the pleasant research atmosphere within the faculty. The Faculty of Management and Business is, in many ways, an optimal working ix

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ACKNOWLEDGEMENTS

environment. It is small enough to allow for non-formal communication among colleagues but large enough to allow for specialisation among peers. Most of the work in this volume has been performed under conditions of social distancing and remote work due to the repercussions of COVID-19. In such circumstances, a joint research endeavour not only enables us to maintain our community spirit but also provides a learning opportunity for cross-fertilising ideas across disciplinary borders and between seasoned scholars and junior staff members. The winter of 2022 was the warmest on record in the northern hemisphere. Often, temperatures above zero deprive us of enjoying the snow and taking part in winter sports. At that time, we were lucky, as there was enough snow for winter activities, but the weather was warm enough not to produce power outages induced by power shortages in these turbulent times. Now, in the last days of March 2023, the sun has once again risen over our Nordic land. We are again moving towards brighter times. Last, but of course not least, we want to thank our families and friends for their continuous support and understanding. Tampere, Finland

Elias Pekkola Jan-Erik Johanson Mikko Mykkänen

Contents

Part I Finnish Public Administration and the Nordic Model   1 1 Insights  into Finnish Public Administration  3 Elias Pekkola, Jan-Erik Johanson, Marjukka Mikkonen, Katju Holkeri, and Mikko Mykkänen 2 Nordic  Public Management Reforms Seen from the Top: Adaptive and Agile Governments 15 Niels Ejersbo, Carsten Greve, Per Lægreid, and Lise H. Rykkja Part II Structures and Space: Governing Polity  33 3 The  Finnish Politico-Administrative System 35 Jan-Erik Johanson, Emmi-Niina Kujala, Timo Moilanen, Elias Pekkola, and Onni Pekonen 4 The  Structures of the Finnish Public Administration 57 Elias Pekkola, Jan-Erik Johanson, Emmi-Niina Kujala, and Mikko Mykkänen

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Contents

5 City-Regionalisation,  Local Democracy and Civic Participation 77 Jouni Häkli, Kirsi Pauliina Kallio, and Olli Ruokolainen 6 Local  Government: Contours of the Past, Present and Future 93 Kaisu Sahamies, Arto Haveri, and Ari-Veikko Anttiroiko Part III Steering Mechanisms 109 7 Public  Financial Management: Budgeting, Accountability and Auditing111 Lasse Oulasvirta and Jaakko Rönkkö 8 Performance  Management in the Finnish Government: Reflections and Future Directions from the Perspectives of Hybridity and Sustainability127 Jarmo Vakkuri, Eija Vinnari, and Elina Vikstedt 9 The  Finnish Constitutional Doctrine on Regional Self-Government143 Anu Mutanen 10 Human  Rights Policy and Human Rights Architecture in Finland: A Review in Light of the Principle of Subsidiarity and Shared Responsibility159 Jukka Viljanen Part IV Process and Actors: The Essence of Finnish Policy 177 11 Public  Service Systems: Meaningful Public Service179 Päivikki Kuoppakangas, Jari Stenvall, and Ilpo Laitinen 12 Evolving  Innovation Policy Rationales in Finland197 Markku Sotarauta, Jari Kolehmainen, and Valtteri Laasonen

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13 Higher  Education Policy: Autonomy and Accountability215 Jussi Kivistö and Tea Vellamo 14 Education  Policy in Finland: Varying Approaches for Addressing Injustices231 Maiju Paananen, Jaakko Kauko, and Saija Volmari 15 Social  and Healthcare Policy: Taming Complexities?249 Ilpo Laitinen, Jari Stenvall, and Päivikki Kuoppakangas 16 Comprehensive  Governance of Security265 Sirpa Virta and Minna Branders 17 Nordic  Environmental State in the Making? A Practice View of the Green Transition279 Helena Leino, Markus Laine, Ari Jokinen, and Pekka Jokinen Part V Conclusions 293 18 Finnish  Public Administration: Past, Present and Future295 Jan-Erik Johanson, Elias Pekkola, Marjukka Mikkonen, and Mikko Mykkänen Index309

Notes on Contributors

Ari-Veikko Anttiroiko, PhD  is a senior lecturer and an adjunct professor at the Faculty of Management and Business, Tampere University, Finland. His main research interests lie in the areas of local governance and local economic development. Anttiroiko has collaborated with academics in different parts of the world. He has memberships in several editorial boards of international journals. He has published extensively on various topics in internationally distributed publications. His latest books include The Political Economy of City Branding (2014), New Urban Management (Palgrave 2015), Wellness City (Palgrave 2018) and The Inclusive City (Palgrave 2020). Minna  Branders, PhD  works in the Ministry of Justice as a Chief Specialist, Finland. She holds a PhD from School of Management, University of Tampere (2016). Niels  Ejersbo is Vice-Director at University College Copenhagen, Denmark, and in charge of continued education programmes in public administration and leadership. His research interests include public management reforms, public management and university governance. Carsten Greve  is Professor of Public Management and Governance and Head of Department at the Department of Organization, Copenhagen Business School, Denmark. His research focuses on public management reform and public-private partnerships. His most recent work concerns strategic public management.

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Jouni Häkli  is Professor of Regional Studies and the leader of the Space and Political Agency Research Group (SPARG) at Tampere University, Finland. His research lies at the intersection of political geography and global and transnational sociology, with a focus on the study of political subjectivity and agency, urban planning and civic participation, borders, and national identities, and forced migration. In his recent work, he has been particularly interested in democratic aspects of city-regionalisation and the political agency of people in vulnerable positions. Arto  Haveri, PhD  is Professor of Local Government Studies at the Faculty of Management and Business, Tampere University, Finland. He has more than 20 years of experience as full professor and academic expert. His main research interests lie in the areas of local government and governance, public sector reforms, metropolitan governance and regional development. He has served in many academic leadership and various expert and advisory positions in national and international organisations. His latest articles include: Haveri A & Anttiroiko A-V (2021) “Urban Platforms as a Mode of Governance”. International Review of Administrative Sciences. Katju  Holkeri  is the Head of Unit for Governance Policy Unit in the Finnish Ministry of Finance, Finland. The unit’s responsibilities are open government, steering systems, trust, general governance policy, civil service legislation, ethics, leadership policy and leadership support, innovation, knowledge management and international co-operation in governance policy. Holkeri is the chair of the OECD’s Working Party on Open Government. She also served as the chair of the OECD Public Governance Committee from 2010 to 2012 and before that as a vice-chair for four years and again as a vice-chair from 2015 to 2019. Previous tasks include, for example, acting as vice chair for the programme and research advisory group of IIAS from 2009 to 2018. Jan-Erik Johanson  is Professor of Administrative Science and Director of Research Group on Public Governance at Tampere University, Finland. He is engaged in the examination of hybridity and strategy formation in government. Network thinking and relational perspective signify crosscutting themes of his research. His recent books include Hybrid Governance, Organisations and Society (with J. Vakkuri, eds.) and Strategy Formation and Policy Making in Government (Palgrave Macmillan).

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Ari Jokinen, DSc  is a senior research fellow in Environmental Policy in the Faculty of Management and Business at Tampere University, Finland. He holds a PhD in Administrative Sciences and is Adjunct Professor of Natural Resource Policy at University of Eastern Finland. He has studied sustainability policy focusing on urban issues, natural resources, biodiversity and the politics of nature. Jokinen is interested in forms of organising between humans, technologies and non-humans in sustainability processes. His recent research themes include business and biodiversity, circular economy and urban sustainability transitions. Pekka Jokinen, DSc (Soc.)  is Professor of Environmental Policy at the Faculty of Management and Business at Tampere University, Finland. Jokinen holds a PhD in Sociology from the University of Turku (1995). He has also worked at the University of Eastern Finland as Professor of Natural Resource Policy. His main research interests lie in environmental governance, social change and sustainability. In recent years, he has focused on climate policy and urban circular economy. Jokinen has been the leader of numerous research projects and published on a wide range of issues in environmental politics and policy. Kirsi  Pauliina  Kallio is Professor of Environmental Pedagogy at Tampere University, Finland. Broad themes in her research are contextual political agency and subjectivity, spatial socialisation and subject formation, lived citizenship, critical environmental pedagogy and socio-ecological sustainability, and positive recognition. Her multidisciplinary work situates at the nexus between critical political geography and childhood and youth studies, with links to other thematic fields such as refugee studies, planning studies, international political sociology and environmental pedagogy. The ongoing research has two foci: refugeeness and humanitarian governance, and environmental education from critical pedagogy and critical geography perspectives. Jaakko  Kauko is Professor of Education Policy at the Faculty of Education and Culture, Tampere University, Finland. He is co-leading the research group EduKnow (Knowledge, Power, and Politics in Education). His research focuses on the fields of education policy and comparative education. He is leading the Academy of Finland-funded project Transnational Knowledge Networks in Higher Education Policymaking. Jussi Kivistö  is a professor at the Higher Education Group, Faculty of Management and Business, Tampere University, Finland. Kivistö has over

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ten years of experience in teaching and coordination in higher education management programmes at the master’s and PhD levels. He has served as consultant for the World Bank and acted as Principal Investigator/ researcher in several national and international research and development projects. Kivistö is also a frequent keynote speaker or invited expert in events and projects related to Finnish higher education policy. Kivistö has authored around 130 publications, mainly in the field of higher education management and policy. Jari  Kolehmainen  works as Research Director at Tampere University, Faculty of Management and Business, Urban and regional Studies Research Group (Sente), Finland. He holds a PhD in Regional Studies and has specialised in knowledge-­based urban and regional development. His research interests cover a number of themes, such as regional innovation activities, economic development and innovation policies and strategic urban and regional development. Emmi-Niina  Kujala  is a PhD student and researcher at the Faculty of Management and Business, Tampere University, Finland. She has been studying public reforms, public management and academic careers in several research and evaluation projects. Päivikki Kuoppakangas, DSc (Econ. & Bus. Adm.)  is a research manager at Turku School of Economics at the University of Turku, Finland. Previously, she was PI in METKU-project scrutinising perceived meaningfulness of work and customer value co-creation in public sector organisations, funded by the Finnish Work Environment Fund at Tampere University, Faculty of Management and Business, Finland. Kuoppakangas’ areas of research have included change management and decision-making, reputation management and branding in public organisations including higher education, digitalisation of public sector services and impact evaluation. Her research has been published, for example, in Policy Studies, European Educational Research Journal, Journal of Change Management and Journal of Adult and Continuing Education, among others. Valtteri  Laasonen is a researcher and PhD student at Tampere University,  Faculty of Management and Business, Urban and Regional Studies Group (Sente),  Finland. In his dissertation, he studies Finnish innovation policy and the capabilities for innovation activities in companies, research and public organisations in the transition towards a bioeconomy. He also works at the privately owned consulting company MDI

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as a partner and leading expert in studies and evaluations related to regional development and innovation policy. Per  Lægreid  is professor emeritus at the Department of Government, University of Bergen, Norway. His research interests include studies of public administration, public management, democratic governance and public sector reforms from a domestic and international comparative perspective. He has coordinated and been partner in several international research projects and has published extensively in journals like Governance, Public Administration, Public Management Review and Public Administration Review. His recent books include Societal Security and Crisis Management (with L.  H. Rykkja, eds., Palgrave Macmillan) and Organization Theory and the Public Sector (with T.  Christensen and K.A. Røvik). Markus Laine, DSc  is a university lecturer and the lead teacher in the bachelor’s degree programme in Sustainable Urban Development at Tampere University, Finland. He holds a PhD in Environmental Policy from Tampere University (2003). Laine has worked as a university lecturer in regional studies, administrative sciences and environmental policy, as well as a research professor in the urban research unit in the City of Helsinki Urban Facts Department. His research has focused on sustainable urban development, collaborative land use and planning and local politics studies. He has led several research projects in the field of sustainable urban development funded by, for example, the Academy of Finland and Business Finland. Ilpo  Laitinen, PhD, MSc, MBA  is both a senior-level director and a researcher and thus shows the capability of working across the boundaries of academia and the business. His areas of research cover the reform and evaluation of public administration and management, change management, innovation management, higher education research and the utilisation of information technology in organisations. His latest academic publications have been published, for example, in Public Management Review, and he was one of the authors of Public Values for Cities and City Policy (Palgrave Macmillan 2021). Laitinen is an associate professor at the University of Oxford. Helena Leino, DSc  is Associate Professor of Environmental Policy in the Faculty of Management and Business at Tampere University, Finland. She is also an adjunct professor at the Department of Built Environment, Aalto

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University, in Helsinki. She holds a PhD in Environmental Policy (2006). Her research has focused on diverse aspects of sustainable urbanisation, participatory knowledge production in urban planning and co-creative urban experiments. She has acted as a PI in several multidisciplinary research projects in land use planning, urban regeneration and use of urban space. Marjukka  Mikkonen  is a doctoral researcher at Tampere University Faculty of Management and Business, Finland. Her research interests include the themes of governance, as well as leadership and management in (sport) organisations, and gender. Timo Moilanen, (MSocSc)  is a Senior Ministerial Adviser at the Ministry of Finance, Finland. He has worked with integrity and anti-corruption policies in central government administration in Finland, other EU Member States and EU institutions. He has conducted several comparative studies on public-service ethics. His work highlights the importance of transnational principles of good public governance and the many challenges related to their implementation such as leadership, training and enforcement. Anu Mutanen  is Associate Professor of Public Law at Tampere University. She is Doctor of Law (University of Helsinki) and Docent in Constitutional Law (University of Turku), Finland. She has published widely on a variety of themes of constitutional and administrative law, for example, on people’s participatory rights, Nordic democracy, powers of the national Parliament and European dimensions of state sovereignty. In her earlier career, she worked as an expert in constitutional law at the Ministry of Justice of Finland. Along her academic duties, she is a regularly heard expert of the Constitutional Law Committee of Finnish Parliament. Mikko Mykkänen, MSc  is a university instructor and a PhD researcher at the Faculty of Management and Business, Tampere University, Finland. His dissertation investigates knowledge transfer of repatriates (civilian crisis management specialists) into the public administration of Finland. Lasse Oulasvirta, PhD, MA in Business Economics  is a professor at Tampere University, Finland, in the field of public sector accounting. He has been holding board memberships of the Finnish Government Accounting Board, the Scientific Council of the National Audit Office of Finland, the Central Accounting Board of the Church, the Finnish EPSAS

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group in the Ministry of Finance, the Finnish auditor oversight body and one leading audit firm in Finland. His research focus has been broadly on public sector accounting and auditing. Maiju  Paananen works as an assistant professor in the Faculty of Education and Culture at Tampere University, Finland. She leads Child Politics in Early Childhood research group. Her research focuses on potential sources of inequality in early childhood education and the intersection of policies and everyday lives of children and families. Lately, she has been interested in datafication in early childhood education and its consequences in the everyday life of children and educators in early childhood settings. Elias  Pekkola, PhD,  Docent, is a university lecturer and the head of administrative studies unit in the Faculty of Management and Business, Tampere University, Finland. Pekkola’s publications include several articles and books on public policy and administration, academic work, the academic profession, careers and HR policy. Onni  Pekonen  is a specialist on democracy and participation at the Finnish Innovation Fund Sitra, Finland. He holds a PhD in Political Science. Pekonen has worked at the University of Jyväskylä and Leiden University with a research focus on parliamentary politics, procedure and history. Pekonen has also worked as a senior specialist on public governance development at the Ministry of Finance, Finland. Jaakko  Rönkkö, PhD CIA, APA, CPFA is Lecturer in Internal Auditing, External Auditing and Internal Control Systems at Tampere University, Finland. He has over ten years of practical experience in auditing and internal auditing, as a partner at Revisium and previously with the big five auditing firms. His primary research interests are in internal auditing, external auditing and corporate governance. Olli Ruokolainen  is a senior researcher at the Center for Cultural Policy Research (Cupore) and post-doctoral researcher at the University of Jyväskylä, Finland. His main research interest is in the strategic development of cultural activities in urban and regional contexts. In addition to this, he has conducted research on the regional (economic) impacts of cultural activities. He has also researched participatory processes in cityregional urban planning. Ruokolainen has recently led a project that analysed the impacts of the Finland 100 centenary year.

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Lise H. Rykkja  is Professor of Political Science and Head of Department at the Department of Government, University of Bergen, Norway. Her research concentrates on the organisation and development of public administration and democratic institutions, administrative policies and reforms, with a particular focus on wicked problems in the public sector. Recent publications include articles in Public Administration, Public Administration Review and Public Management Review. Rykkja has led and participated in several national and international research projects, and she recently coordinated the EU Horizon 2020 project Transforming into Open, Innovative and Collaborative Governments (TROPICO). Kaisu Sahamies  is a doctoral researcher at Tampere University, Finland. Her research interests centre on the intersection of local governance, sustainable development and citizen well-being. In her PhD dissertation, Sahamies aims to explore the impact of platformisation on the roles and relationships of city governments, their residents and local communities. She investigates how cities can effectively use diverse platforms to enhance citizen participation, social innovation and public value creation. Sahamies has been involved in research projects regarding circular economy and different aspects of urban development, such as land use and light rail transit. Markku Sotarauta, PhD  is Professor of Regional Development Studies in the Faculty of Management and Business at Tampere University, Finland. In 2011–2013, he served as the founding Dean of the School of Management and, in 2009–2010, as the last Dean of the Faculty of Economics and Administration. He leads the Urban and Regional Studies Group (Sente). Sotarauta specialises in leadership, institutional entrepreneurship, institutions and innovation in city and regional development. He has published widely on these issues in international journals and edited books. Sotarauta has worked with the Finnish Parliament, Swedish Innovation Agency (Vinnova) and many Finnish ministries, as well as cities and regions both in Finland and in other countries. Jari  Stenvall is Professor in Administrative Sciences at Tampere University, Finland. He has published widely in the area of learning and innovation, change management, trust, organisational reforms, service innovations and the use of information technology in organisations. Jarmo  Vakkuri  is Professor of Local Public Economics at Tampere University, Finland and the director of the research group on Public Financial Management. His research concentrates on performance

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management, hybrid governance, urban policymaking and public sector reforms. Vakkuri is the co-author of the book Governing Hybrid Organisations and an editor of Hybrid Governance, Organisations and Society—Value Creation Perspectives. He is the director and partner in several projects, associate editor of Journal of Public Budgeting, Accounting and Financial Management, and guest editor of special issues in scientific journals. Vakkuri coordinates the research network on governing and managing hybridity. Tea Vellamo  is a senior specialist in the Faculty of Natural Sciences and Engineering at Tampere University, Finland. She holds the degrees of Doctor of Administrative Sciences and Master of Arts. Her research interest includes internationalisation, organisational identity, gender studies and higher education policy and governance. In addition to her research activities, she has an extensive practical experience in higher education management. She coordinates the Academy of Finland-funded Flagship for Photonics Research and Innovation. She also works as an expert for the National Board of Education and the European Education and Culture Executive Agency. Elina Vikstedt  is a doctoral researcher at Tampere University Faculty of Management and Business, Finland. Her dissertation project focuses on the performance of hybrid forms of organising and governance for sustainable development. Jukka  Viljanen is Professor of Public Law at Tampere University, Finland. In addition to Tampere University, he also worked during his post-doc career at the University of Vaasa and was a visiting scholar at the Netherlands Human Rights Institute (SIM) in Utrecht. He is one of the leaders in a research consortium funded by the Strategic Research Council under Academy of Finland called ALL-­YOUTH (2018–2023). He is also responsible leader of EVOLUTIVE- project on impact of the Council of Europe Human Rights treaties (2021–2022). In Global Digital Human Rights Network (2020–2024), Viljanen is a member of the Core Group and Grant Awarding coordinator. Viljanen has published extensively on the European Court of Human Rights. His latest research interests have focused on human rights dialogue within European and international systems. He was one of the authors and editors in Human Rights Law and Regulating Freedom of Expression in New Media, Lessons from Nordic Approaches.

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Eija  Vinnari  is Professor of Public Financial Management at Tampere University, Finland. Vinnari is interested in whether and how accounting and management practices could help in the much-needed transition to a socially and ecologically sustainable society characterised by inter-species justice. Her work has been published in Accounting, Organizations and Society; Accounting, Auditing and Accountability Journal; Critical Perspectives on Accounting; Financial Accountability and Management; Journal of Agricultural and Environmental Ethics and several edited collections. Vinnari is associate editor of Critical Perspectives on Accounting and she also serves on the editorial boards of various other journals. Sirpa Virta  is Professor of Security Governance at Tampere University, Faculty of Management and Business, Finland. She is also an adjunct professor at the National Defence University. She has published numerous articles in international journals, edited volumes and books since 2001 on security governance, policing, local safety planning processes, networks, legitimacy and political theory of security. Saija  Volmari is finalising her PhD dissertation in the Doctoral Programme in School, Education, Society and Culture at the University of Helsinki, Finland. Her areas of expertise include globalisation and education, education politics and policymaking in the Nordic countries, social justice in education, and comparative and spatio-temporal policy analysis.

Abbreviations

AVI BCPFA CoE CPFA CSA CSM DUI ECEC ECHR EHEA EKI ELY EU-MINVA FM FSCP HEI HUS IFAC INTOSAI ISA ISSAI LRT MAL MoEC MoF MP

State Regional Administrative Agency Board of Chartered Public Financial Auditing Centre of Expertise (1994–2013) Chartered Public Financial Auditing Civil Servants’ Act Comprehensive Security Model Doing, Using and Interaction-Based Innovation Early Childhood Education and Care European Court of Human Rights European Higher Education Institution Economic Development, Competitiveness and Innovation Services Centre for Economic Development, Transport and Environment The Committee of EU Ministers The Finance Committee of the Council of State The Foreign and Security Policy Ministerial Committee Higher Education Institution Hospital District of Helsinki and Uusimaa International Federation of Accountants International Organization of Supreme Audit Institutions International Standard of Auditing Standards of Supreme Audit Institutions Light Rail Transit Planning, Housing and Transportation agreement Ministry of Education and Culture Ministry of Finance Member of Parliament xxv

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ABBREVIATIONS

NAOF NAP NCC NGO NPFM NPG NPM NUP NWS OBB PBB PBF PPBS PPP R&D SDG SHOK STI TALPOL Tekes TP-UTVA UPR WSC

The National Audit Office of Finland The National Human Right Action Plan National Core Curriculum Non-governmental Organisation New Public Financial Management New Public Governance New Public Management National Urban Park Neo-Weberian State Outcome-Based Budget Performance-Based Budgets Performance-Based Funding Planning-Programming-Budgeting System Public-Private Partnership Research and Development Sustainable Development Goal Strategic Center for Excellence for Science, Technology, and Innovation (2007–2016) Science, Technology and Innovation The Committee of Ministers for Economic Policy The National Technology Agency (1983–2017) FSCP jointly meeting the President of the Republic Universal Periodic Reviews Wellbeing Services County

List of Figures

Fig. 1.1 Fig. 4.1 Fig. 4.2 Fig. 7.1 Fig. 7.2 Fig. 8.1 Fig. 11.1 Fig. 12.1 Fig. 12.2 Fig. 12.3 Fig. 12.4 Fig. 12.5

Structure of the volume Simplified diagram of the current governmental structures in Finland (adapted from Anttiroiko & Valkama, 2017, p. 158) The Regional State Administrative Agency steering structure (adapted from Nyholm et al., 2016, p. 153) A full accrual-based budget with separate partial budget plans (modified from Oulasvirta, 2019, Fig. 4.1) Government planning and reporting system in Finland (adapted from Oulasvirta, 2019, Fig. 4.2) Weak sustainability (left) and strong sustainability (right) (adapted from Giddings et al., 2002, pp. 189, 192) Building the experience of meaningfulness of work in the three case organisations Annual change in the volume of gross domestic product (Official Statistics of Finland, 2022) Research and development expenditure in Finland by performing sectors (EUR million) (Official Statistics of Finland, 2022) R&D expenditure in Finland, annual change percentage (Official Statistics of Finland, 2022) Total R&D expenditure of selected countries, the OECD and the EU27 as a percentage of GDP (GERD). (Source: OECD data, n.d.) Visualisation of the rationales between a cluster programme and the Growth Engine initiative

10 59 68 118 120 132 188 204 205 205 206 209

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List of Tables

Table 4.1

Ministries, employees in the branch of government, policy areas and selected (example) offices in Finland. Source: Compiled by authors from public sources Table 7.1 Summarisation of the linkages between budget types, budget appropriations and accounting in the Finnish public sector (both local governments and the central government) Table 11.1 Extracts of empirical data citations Table 18.1 The main insights and themes covered in the volume

61 124 186 298

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PART I

Finnish Public Administration and the Nordic Model

CHAPTER 1

Insights into Finnish Public Administration Elias Pekkola, Jan-Erik Johanson, Marjukka Mikkonen, Katju Holkeri, and Mikko Mykkänen

Introduction During its relatively brief existence, the Finnish nation state, formed in 1917 as part of the European dismantling of great empires, has relied on the Swedish ‘Scandinavian’ legal tradition and developed its characteristic ‘Fennic’ identity as a sovereign state under the strong influence of its eastern neighbour in times of war and peace. In one century, Finland—a Fennoscandian country with a Finno-Ugric majority language—has transformed from an eastern periphery of Sweden to a ‘grand duchy’ in the north-western part of the Russian empire into a fully fledged Nordic welfare state and European Union member. Many of the basic structures of the Finnish public administration have remained intact during the 100-­ year period of independence. However, Finland’s public administration

E. Pekkola (*) • J.-E. Johanson • M. Mikkonen • M. Mykkänen Tampere University, Tampere, Finland e-mail: [email protected] K. Holkeri Ministry of Finance, Helsinki, Finland © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_1

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showcases pragmatism and tenaciousness in action. To illustrate this, a few examples can be mentioned. It overcame the Finnish Civil War of 1918 in a way that enabled it to mitigate, over time, the dividing line between the former belligerent civic groups. It conducted a successful relocation of 430,000 internally displaced Finnish citizens who were forced to leave their homes from areas annexed by the Soviet Union as an end result of the Second World War. It expanded at the same swift pace as the relatively late urbanisation of the nation has. It went through the recession of the early 1990s, which resulted in the loss of approximately 500,000 jobs in Finland. In the long run, it has tackled both internal and external turbulence in a manner that can be described as agile and able. Finland is well known for its high-quality educational services. It has also been a forerunner in political rights; women received political rights as early as 1906. However, on many other fronts, Finland has been one of the latecomers in terms of universal rights, for instance, in the case of gay marriage and sexual minorities (see Chap. 10). In terms of combatting global climate change, Finland has committed to many international treaties and has applied policies for a circular economy, public transit and infrastructure, and sustainable energy production. Finland also has a history of being an exception among Nordic countries regarding its security policy being based on holistic security. This is a European exception, as Finland never dissolved universal conscription for male citizens. However, there is more to Finland than meets the eye, and Finland has several challenges in terms of organising its public services and goods. The pivotal role of the Finnish government can be seen in the high levels of trust in the government, which, in turn, facilitates administrative procedures. Internally, market-emulating performance-based standards have gained more ground, on top of legal considerations in public administration, and simultaneously joining the European community and establishing a new constitution in the 1990s has brought about new types of regulation. While the administrative structures have remained relatively stable over the past decade, the policy environment has changed drastically. Internally, the structural changes followed by the relatively late urbanisation of the nation combined with a rapidly ageing population is a conundrum yet to be resolved, especially in the rural areas of Finland. This sets new demands for service production and the knowledge-based economy, as well as digitisation. Externally, the globalisation of markets, climate change and external shocks boost cooperative practices across

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national borders and give rise to interdepartmental co-operation between public organisations, businesses and civil society. The chapters of this book are devoted to exploring Finnish public administration through the lens of Nordic public administration. The cross-cutting themes intertwining the chapters emerge from the current Finnish national public governance strategy, highlighting the contemporary aspects important for the praxis of Finnish public administration. The practically oriented approach also characterises the nature of Finnish research on public administration. For instance, scholars of human geography and public law (who provide an important perspective within the disciplinary context of administrative sciences) have a long and devoted tradition of working in a close and critically constructive relationship with civil servants and developers of public administration. This interaction is one of the foundations of the pragmatic development of Finland’s public administration. Lastly, several practitioners working and developing the Finnish administration have inspired the completion of this book, as governments are themselves able to propose administrative solutions to overcome their challenges.

Need for the Holistic Development of Finnish Public Administration: Strategy as a Solution?

The idea of a public governance strategy for Finland originated from the Government Programme of Prime Minister Sanna Marin. The government agreed that Finland needed a determined renewal of governance. The strategy aims to guide and strengthen the renewal of public governance until 2030. Although Finland has rated highly in international comparisons on public governance, the accelerating climate crisis, the ageing society, digitalisation and globalisation, among others, have increased the need for ambitious and sustainable reform. Finnish public administration is characterised by the tendency to do development work relatively separately at the state and municipal levels. The significant regional reform that is underway has brought attention to the need for a more holistic and whole-of-public-sector strategy. The need for a joint strategy also originated from the realisation of the increasing complexity of the operating environment (continued)

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(continued) and how it challenges governance in its ability to function appropriately and efficiently. The full-scale use of new technologies further contributed to the need to reform public governance structures and build new capacity. Comprehensive government decisions-in-principle on public governance reform have been made in previous decades, but not very frequently. Furthermore, the public sector has also undergone varied, substantial development reforms and evaluations in the past, but there was not a public sector-wide public governance strategy. Why Is a Holistic Strategy Needed? The starting point of the strategy is its target for 2030, whereby ‘public governance builds sustainable wellbeing in the midst of upheaval’. The idea behind the public governance strategy is that it builds the framework for Finnish public governance reform. The six goals of the strategy define a common direction for the reform. The first goal, ‘Acknowledging diversity strengthens equality’, emphasises the need to take into account the needs of different people and groups. The second goal is intergenerational responsibility to ensure nature’s carrying capacity. This means creating sustainable wellbeing and identifying concrete targets for change to respond to the acute challenges. The third goal is to increase the government’s ability to systematically imagine possible futures and new ways of carrying out the responsibilities of governance. The fourth goal stresses that action should be based on evidence. The aim is that preparatory work and decision making in government are evidence-based and, furthermore, that the information that is used is openly available. The idea behind the fifth goal is to ensure that trust is built actively. This is based on the reasoning that government bears comprehensive responsibility and that empathetic governance fosters social capital rooted in trust. The last and sixth goal is open government that works together. The idea behind this goal is that open government reinforces dialogue in society and promotes everyone’s right to understand and to be understood. This last goal links the public governance strategy directly to the Open Government Strategy, which was also published in 2020. (continued)

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(continued) The How of the Strategy How was the strategy created? How will it be implemented? The strategy was planned and drafted with strong co-operation between the various stakeholders involved, including various administrative sectors, municipalities, civil society and researchers. The participatory process was seen as important, not only for the quality of the strategy itself but also for helping the joint implementation of the strategy by enhancing the trust and interaction between different actors. The future scenarios made it possible to envisage different possibilities for resolving key issues, thus highlighting alternative directions for the development of public governance, such as people-to-government relations, the knowledge base of government decision making, ways of engaging and the instruments that the strategy covers. The real test of almost any strategy is in its implementation. This is very true for the public governance strategy. It is intended to be a comprehensive and long-term strategy. However, this means a lot of communication and winning over hearts and minds in different parts of the public sector. While there has been a lot of work done in this regard, much ground is still uncovered. After the parliamentary elections, one of the ultimate tests that challenge the Finnish system is the continuity from government period to government period. Challenges that have been identified by the government regarding the current politico-administrative system are related to varied aspects, including the stovepipe structures of the government, problems of unaligned aims at different government levels, the challenge of the long-term development of administrative policies across parliamentary terms and citizen participation. These challenges are universal; however, they also have Nordic and, more precisely, Finnish characteristics that the chapters of this book aim to unfold. In the remainder of this chapter, we describe the outline of the book, inspired by the practical developmental challenges of the politico-administrative system in Finland. The book provides a novel, comprehensive approach to Finnish public administration in the Nordic context by combining the perspectives of administration, politics, political agency and space.

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Outline of the Book The Nordic perspective framing the discussions of the Finnish public administration is presented in the following two introductory chapters by Ejersbo et  al. (Chap. 2) and Johanson et  al. (Chap. 3). The following chapters discuss varied themes in the Finnish public administration, providing a comprehensive understanding of its system and structure, as well as its past developments and future prospects. The convenient distinction in the English language between polity, policy and politics provides a fitting framework through which to explore the Finnish public administrative system. From an administrative point of view, the geographical borders of the country define a unitary space for the polity. The tradition of strong local government, the continuous restructuring of state regional governance and the almost non-existent democratic regional governance bring forth a decentralised nuance to an otherwise unitary Finnish government structure. The focus of this book is on the policy aspect of government across its various areas, processes and issues. Political institutions provide the framework in which policy processes take place. The aspects concerning the polity will be further explored in Part II of this book. Public administration is always strongly connected to politics and to socially constructed geographical demarcations; however, the functioning of parliament and the political struggle in shaping legislation are not within the scope of this book. Instead, political agency and space appear through policy instruments and steering mechanisms (Part III). These mechanisms shape the trajectories, assumptions and predictions in public administration and public policy. Lastly, public policies create a contextual framework for public administration (Part IV). In Finland, as in other Nordic countries, post-Second World War development led to the establishment of a strong and professional welfare state with fragmented policy sectors. Thus, it is impossible to understand the functioning of the Finnish public administration and public–private service system without taking a closer look at sector policies and their management in the vital areas of Finland’s welfare society. Furthermore, the implementation side of the execution of policies is one of the backbones of administrative studies, whether that involves taking care of the environment, infrastructure or the health of citizens. The emphasis here is on the processes and actions of the policies, rather than on the description of their structural aspects. These three aspects are the backbone of this book,

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and together with this introductory part and concluding part, they construct the entirety of this book. Consequently, this book has been divided into five parts (see Fig.  1.1) that will be introduced in the following sections. The first part of the book (Part I) serves as an introductory section by providing a contextual outlook regarding Finnish public administration, as well as an overview of this book and its chapters. Besides this introductory note (Chap. 1), the next chapter by Ejersbo et al. (Chap. 2) examines the core elements of the Nordic administrative model and public administration paradigms, including new public management, new public governance and the neo-Weberian state, which have been the most prominent labels for reform efforts in Nordic public administration. In the second part of this book (Part II), Structures and Spaces: Governing Polity, the authors provide a basic understanding of the system of Finnish public administration as well as new perspectives on regional and local governance in Finnish public administration through four chapters. In practice, the authors explore the democratic system and democratic values of the Finnish public administration, provide an understanding of the institutions, levels and organisations constituting the Finnish public administration and discuss their organisation, reforms and effectiveness. In the first chapter of this part, Johanson et al. (Chap. 3) introduce the Finnish public administration, its basic ideas, values, actors and normative base. They focus especially on the role and definition of government, as this has resulted in topical debates due to recent changes in the political system. In the following chapter, Pekkola et  al. (Chap. 4) take a more structural approach by describing the basic structures of the Finnish public administration, focusing especially on the state-level administration. Furthermore, they discuss and analyse the 2023 structural reform of public administration that brings the Finnish structure closer to the three-tier government system in other Nordic countries. In their chapter on urban areas, Häkli et al. zoom in to examine more local governance (Chap. 5). They shed light on the expanding city-­ regionalisation in Finland, which challenges and possibly reshapes the traditional state-based public space. The city-regionalisation trend is interesting because local governance has previously been organised based on a territorially layered system of municipalities, regions and the state, but at present, the new spaces for governance evolve in between, within and beyond such territorial boundaries. Furthermore, the authors discuss city-regionalisation in light of democracy and citizen participation. In the

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Fig. 1.1  Structure of the volume

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last chapter of Part II, Sahamies et al. (Chap. 6) provide further insights into local government by describing and analysing the vital role of municipalities in local infrastructure, education and economic development policy. The authors offer further insights into the development trajectories of local governance and discuss the contextual changes in Finland that are reshaping the local governance system. Finally, the future of municipal governance is discussed in light of platform thinking. The third part of this book (Part III) consists of five chapters, all of which provide a window into the key steering mechanisms in Finnish public administration. First, Oulasvirta and Rönkkö introduce the core areas of Finnish public financial management, including budgeting, accountability and auditing at the levels of local and central government, including their audit institutions (Chap. 7). Besides the traditional view of performance in terms of financial indices, the authors provide insights into the meaning of non-financial activity performance and the accounting of outputs and outcomes in Finnish public administration. Vakkuri et al. discuss the basic elements of performance management systems in Finnish public administration and their structure, as well as fundamental assumptions and limitations (Chap. 8). In acknowledging the globalised context of public administration, the authors link and discuss the case of Finnish performance management in the context of larger global institutions, such as the United Nations, and explore questions of hybridity and sustainability, providing a comprehensive understanding of the contemporary globalised operating environment of public administration. The two following chapters of Part III consider legislative aspects. Mutanen explores regional self-government from the perspective of constitutional legal doctrine (Chap. 9). She explores the recent healthcare and social welfare reform and discusses the intricacies the newly constructed body has from the legislative perspective in its relations with state administration and municipal self-governance. In the following chapter (Chap. 10), Viljanen turns our attention towards human rights policy and human rights architecture in the context of the Finnish politico-administrative system. He discusses the key principles and the international network at the root of the Finnish human rights system by highlighting three aspects: (a) sharing responsibilities, and the trend for responsibilities regarding human rights shifting towards the national level from the international agencies; (b) concentrating on the system and its key institutions and mandates; and (c) concentrating on human rights policy instruments and their key elements. The last chapter of this part by Kuoppakangas et al.

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(Chap. 11) shifts the focus to public sector services and their meaningfulness. The authors provide an interesting snapshot of change in public sector services by discussing how to create a service system that simultaneously creates value and offers meaningful services for users but also enhances the perceived meaningfulness for public sector employees. The chapter, thus, provides a more experiential view of public administration by exploring civil servants’ experiences of public services and their significance. The fourth part of this book (Part IV), ‘Process and Actors: The Essence of Finnish Policy’, consists of six chapters that provide a window into the essential aspects of Finnish public administration. All chapters provide a detailed discussion of different policy fields characterising Finnish public policy. The first chapter of this part by Sotarauta et  al. (Chap. 12) concerns innovation policy, which is one of the key public policies on a global scale as it is seen as securing a better future. More specifically, the authors discuss three phases of the development of Finnish innovation policy and the rationales informing the evolution of Finnish innovation policy. The next two chapters focus on educational policy. In the former chapter (Chap. 13), Kivistö and Vellamo discuss Finnish higher education policy and the new public management-oriented reform policies from the performance-based funding perspective. They further elaborate on the role of higher education in the public sector and its relationship with performance-based budgeting. Lastly, the authors provide insights into Finnish higher education policy from the Nordic perspective and explore future scenarios for the higher education sector. In the latter chapter on education (Chap. 14), Paananen et al. discuss education policy and especially the interplay between education policy and social justice. First, the authors describe the administration system of education in Finland, and second, they analyse the education system in light of social (in)justice. They provide insights into different policy instruments to combat injustice within educational policy and explore the relationship between strong municipal autonomy, educational policy and social justice in Finnish public administration. In the next chapter (Chap. 15), Laitinen et al. turn the focus to social and healthcare policy by discussing the policies and organisations in light of the recent social and healthcare reform. They provide valuable insights into the organisational paradoxes and dilemmas emerging from competing aims and values in the reform process. Furthermore, they discuss how

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adaptive leadership may offer a potent tool for tackling the varied dilemmas in complex governance reforms. In the following chapter (Chap. 16), Virta and Branders discuss the governance of security in Finland from a comprehensive security perspective. They study the complex nature of the governance of security, including strategy, complexity, innovativeness, intelligence and knowledge-based decision making, trust building and multi-agency co-operation. The chapter highlights the complexity of security issues and provides insights into the specific nature of Finnish security governance emerging from the geopolitical location of the country. The last chapter of Part IV focuses on environmental policy, as Leino et  al. (Chap. 17) provide an understanding of the drivers of change in Nordic environmental policy. In practice, they explore the intersection of local-­ level governance and the model of the environmental state and provide an understanding of how local environmental policy operates and how it provides opportunities for sustainable urban development. They, however, point out that while aiming to tackle global environmental challenges, urban action may lead to new types of exclusion, thus offering paradoxical choice options for local decision-makers. In the fifth and final part of the book (Part V), the editors provide a concluding discussion of the findings and insights of this book (Chap. 18). By leaning on the Nordic framework set out in the introductory elaboration, the authors discuss the past, present and future of the Finnish public administration. The authors describe the implications of changes in the democratic institutions, structures of the government and public service delivery. The apparent pragmatist orientation in confronting challenges and the consensual decision-making practices that follow such a perspective may dispel the ideas regarding more fundamental challenges. Consequently, a change in administrative values is not a single issue to be fixed, but it presents a profound transformation in the role of citizens. Combatting climate change and struggling for sustainability may entail changes in the welfare model and are likely to result in new equity divisions. Likewise, the changing security architecture must be adapted to a fixed geopolitical position. Further, the centrifugal tendencies for the concentration of economic and social activities being in major cities and major companies in ecosystems are susceptible to uneven development between centres and peripheries. These are all grand challenges that can be confronted with a more strategic state.

CHAPTER 2

Nordic Public Management Reforms Seen from the Top: Adaptive and Agile Governments Niels Ejersbo, Carsten Greve, Per Lægreid, and Lise H. Rykkja

Introduction This chapter addresses the core elements of the assumed Nordic administrative model and examines how central governments incorporate various reform ideas. We take a closer look at the administrative reforms launched in the Nordic countries in recent decades. The focus is on public management reform (Pollitt & Bouckaert, 2017)—attempts to reorganise

N. Ejersbo (*) University College Copenhagen, Copenhagen, Denmark e-mail: [email protected] C. Greve Copenhagen Business School, Copenhagen, Denmark P. Lægreid • L. H. Rykkja University of Bergen, Bergen, Norway © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_2

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administrative institutions by changing structural arrangements, procedures, and management tools (Egeberg & Trondal, 2018; Jacobsson et al., 2015; Torfing et al., 2012). The Nordic countries have been influenced by various contemporary governance ideas—new public management (NPM), new public governance (NPG), and a neo-Weberian state model (NWS), to name the most important ones. The Nordic model is especially interesting because it is widely regarded as successful by international comparison. We investigate to what extent there is a specifically Nordic model of public management reform. We examine what characterises it and argue that an incremental reform model is a core feature. The chapter more specifically asks the following questions: • How do top civil servants perceive public management reform processes, reform trends, reform content, and management instruments? • How can we understand these reform trajectories and reform perceptions? The chapter argues that reforms do not replace one another over time. Rather, new reform elements supplement existing ones through a ‘layering’ process (Mahoney & Thelen, 2010; Streeck & Thelen, 2005). Previous reforms do not fade away but are complemented by new trends. This results in a mixed order in which there is an accumulation of different reform trends (Olsen, 2010). This mixed order supports an agile, flexible, and adaptive approach to public management reform, where new external ideas are wired into the existing reform pattern. We understand agility as a strategy that is used to cope with an environment characterised by high volatility, uncertainty, and unpredictability, and as the ability to build and balance stability and change within the administrative system (Ansell et al., 2017). The concept of adaptive governance is similar, whereby its starting point is the observation that governments need to be able to deal with a highly volatile environment, and it calls for ambidextrous administrations that are able to incorporate elements belonging to different organisational and reform types (Janssen & van der Voort, 2016). We first present the theoretical approach and then describe the research design and data basis. Thereafter, we give a brief outline of the Nordic administrative context and then go on to discuss reform processes, reform content, trends, and management instruments. We introduce the experiences and perceptions of top civil servants in ministries and central

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agencies in the Nordic countries. Finally, we analyse the findings and draw some conclusions about how the Nordic countries deal with dominant reforms in the public sector.

Theoretical Approach: Public Management Reforms as Layering, Agility, and Adaptation The public management reform literature has long recognised that administrative reforms are not one-dimensional. Historical-institutional features in each country or region shape the way reforms are implemented and public value is produced. Following on from that, we would expect a sedimentation in which new and old reforms co-exist (Christensen & Lægreid, 2011). This reflects the notion that the administrative apparatus is not a blueprint of dominant international reform trends (Hammerschmid et al., 2016). Today, there is no single set of doctrines, reform trends, administrative processes, management instruments, or organisational structures (Torfing et al., 2020). Diverse approaches co-exist within the same administrative apparatus and there is no ‘one-best-way’ orientation (Alford & Hughes, 2008). Instead, administrative arrangements tend to be characterised by complex and shifting repertoires of organisational structures and principles. Therefore, we have moved beyond reform dichotomies, such as NPM or NPG, to study mixed orders characterised by a blend of reform trends and different organisational features (Olsen, 2009). We believe that reforms tend to be characterised by institutional syncretism—an adaptive recombination of existing and new administrative arrangements (Ansell et  al., 2017). Adaptive governance has been suggested as a useful reform strategy to move towards a stable, accountable, and responsive government apparatus (Brunner, 2010; Janssen & van der Voort, 2016). We expect new arrangements to be layered on top of pre-­ existing reforms and established structures rather than replacing them. This enables existing administrative arrangements to be combined with new reform elements, producing a multi-structured administrative apparatus and hybrid organisational arrangements (Christensen & Lægreid, 2011). One implication is that reform processes are characterised by robustness and change. They should be seen as a transformative process that combines external pressure, instrumental design, and cultural constraints (Christensen & Lægreid, 2018). To capture the complexity of reforms that encompass different administrative levels, as well as policy areas, we

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must go beyond a one-factor explanation. The administrative apparatus does not adapt in a simple and straightforward way, either to new steering signals or to changing external pressure. What is seen as reasonable and appropriate matters, and it constrains internal incremental adaptation (Olsen, 1997). Reforms have to pass a compatibility test when they encounter the national or local context (Brunsson & Olsen, 1993). We draw upon Streeck and Thelen (2005), who characterise changes according to their degree of continuity and incrementalism. Our argument is that adaptation and gradual transformation characterise the Nordic reform trajectory. A core concept in the literature on gradual institutional change is layering (Mahoney & Thelen, 2010; Streeck & Thelen, 2005). Layering indicates that new institutional elements are layered on top of existing ones. In this case, new institutional elements may be introduced, but the older ones do not immediately disappear. New elements are piled onto existing elements. Kickert and Van der Meer (2011) analyse reforms as a continuous process of sequential events, as a series of accommodations, adjustments, and adaptions and as an ongoing accumulation of small and gradual changes. The reforms tend to be pragmatic, characterised by a combination of stability and change, continuous renewal, and layered change, where different structural and procedural arrangements co-exist and affect one another. Pragmatism has been seen as an appropriate reform strategy for public management reforms (Alford & Hughes, 2008; Farjoun et al., 2015). Our argument is that the Nordic countries might be a good illustration of these theoretical ideas. The Nordic countries share several characteristics, but there are also notable differences among them (Knutsen, 2017; Wivel & Nedregaard, 2018). On the one hand, the Nordic countries are similar in many respects. They have parliamentary systems where political loyalty is a main administrative norm. The administrative apparatus is supposed to be a neutral tool for the current government and to be responsive to signals from the political leadership. They also adhere to Rechtstaat values (see Chap. 16), such as impartiality, neutrality, fairness, predictability, due process, and the rule of law. They all have well-developed administrative systems. Their administrative apparatuses are characterised by merit-based bureaucratic professionalism. They enjoy a consensus-oriented democratic tradition (Lægreid, 2017). The Nordic countries are also known as large universal welfare states, but they also allow competition, marketisation, and contracting out of various tasks. They enjoy well-established co-operation between the

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state, civil society, and the private sector through a system of integrated participation in government by stakeholders. Their decision-making style is pragmatic and collaborative. Trade unions are rather strong. There is a high level of trust in government, as well as mutual trust between politicians and the administration and between ministries and central agencies. Ministries and semi-independent central agencies are core bodies in the central governments (Balle Hansen et al., 2012). The central agencies are more numerous, normally bigger than the ministries, and have, overall, more capacity. The Nordic countries also share a political culture underlining the central role of the state in managing society. There is a strong statist view of governance, and the welfare-state orientation is strong (Painter & Peters, 2010). Civil servants’ actions are generally open to scrutiny, and the transparency of and open access to government documents are high (see Chap. 3). On the other hand, there are notable differences among the Nordic countries. Except for Iceland, they were not hit especially hard by the financial crisis of 2008–2009. The main governing principle is ministerial responsibility, but Sweden has a dualistic system in which the central agencies are formally more independent and responsible to the cabinet as a collegium. Sweden has also taken a more radical NPM path (Christensen & Bjurstrøm, 2017). The main picture is that the different state models in the Nordic countries represent supplementary models that generate hybrid and complex arrangements (Olsen, 1988). However, the literature does not identify one single dominant administrative tradition. Rather, the order is mixed and does not remain stable across countries and over time but tends to vary. Turning to the administrative executives’ assessment of the public sector reforms around 2013, we examine to what extent perceptions of recent reform trends and processes are in line with any of the reform trajectories (NPM, NPG, or NWS), and how these perceptions align across the Nordic countries. Based on this discussion, we have the following expectations: • The reform landscape is characterised by complexity, a combination of continuity and change, and similarities and differences between the countries. • There is not one single factor behind the perceived reform processes; they are driven by a combination of external and internal factors.

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• The perceived reform content can be considered as a trade-off between different features. • The perceived reform trends are a mixture of different reform packages. • Many partly overlapping and supplementary reform instruments are used.

Research Design and Data We approach the research questions by using data from a large-scale online survey of central government ministries and central agencies conducted in the period from 2012 to 2015. The survey was based on a full census of all ministries and central agencies in 19 European countries. It targeted the top three administrative levels in the ministries and the top two levels in the agencies, and 1907 top executives from the Nordic countries responded to the survey. The response rate for the Nordic countries was 35.4%. The survey does not claim full representativeness, but it is nevertheless the largest comparative executive dataset of its kind covering all the Nordic countries. The specific design of the survey has been described in detail by Hammerschmid et  al. (2016) and Greve et  al. (2016). The data give a picture of how the reforms are perceived by the top civil servants in the central government apparatus. They might, therefore, provide a biased picture of their own organisation, seeing it as more favourable and presenting themselves as more responsible reformers than others would do. We have, however, no reason to believe that such bias varies systematically across countries. Since the survey data only cover one point in time, we cannot say much about the processes leading to the observed pattern. Nevertheless, we argue that the account of the trajectories and the results from the survey, when taken together, make a thorough analysis of the management reforms in the Nordic countries possible. More importantly, they enable us to assess the status of current reforms using concepts from the theory of gradual institutional change. We examine the recent administrative reforms by looking at perceptions of reform processes, trends, content, and the use of management instruments (Greve et al., 2016; Ejersbo et al., 2020). We focus on the relevance of different instruments, contrasting the traditional administration with instruments that are more prominent under NPM, NPG, and NWS.

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Views on Nordic Administrative Reforms Reform Processes: Combining Internal and External Drivers The perceptions of dominant reform processes can capture how organisations approach the reforms and how different actors are involved in such processes. The top executives in the Nordic countries were inclined to agree on middle positions regarding reform processes (Lægreid & Rykkja, 2016). This was true when they were asked to indicate whether the observed reform processes were crisis-driven or planned, contested by the unions or not, and characterised by major public involvement or not. The overall impression was that the reforms were more pragmatic and less ideological. There was also no strong overall reform pressure, either from lower-level public employees or from politicians. In line with the theory of gradual institutional change, the top civil servants did not tend towards one extreme or the other, but rather applied a reform process that combined crisis-driven and planned reforms, politically driven and bureaucrat-­ driven reforms, union support and reform contentedness, and high and low public involvement. On a scale from 1 to 10, the respondents clustered around 5 on most dimensions. The exception was the ‘top-down– bottom-up’ dimension, where, overall, the reforms were seen as more top-down than bottom-up. The Icelandic reform processes were more top-down, with little public involvement and were less supported by the unions. In contrast, the Norwegian reform processes had higher public involvement. Reform Content: More About Service Improvement Than Cost-Cutting The perceptions of reform content cover whether reforms are seen as consistent, comprehensive, or partial, substantive, or symbolic. Regarding reform content, the respondents also took a middle position. A theory of gradual institutional change would expect reforms to be neither very consistent nor comprehensive. Layering would indicate that they are neither completely consistent nor very inconsistent, but somewhere in between. Incremental and gradual change would not imply very comprehensive reforms nor very partial ones, but something in between, as is the case in the data presented here.

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What we see are executives who largely report composite reforms that are both consistent and inconsistent, comprehensive and partial, substantive and symbolic, designed to cut costs and improve services, and seen as neither too much nor too little but in between (Lægreid & Rykkja, 2016). This can be taken to reflect a characteristically Nordic decision-making style identified in earlier research and exemplified by terms such as ‘pragmatism’, ‘collaboration’, and ‘participation’. The Nordic reforms are more about service improvements than about cost-cutting. This is especially the case for Norway. Reform Trends: A Mixed Pattern, High Activity, and Combining Different Reforms The most important reform trends in the Nordic central governments, according to the executives, were transparency and open government, followed by digitalization and collaboration and co-operation among public sector organisations (Lægreid & Rykkja, 2016). Except for digital government, these can be said to be typical NPG reform trends. The executives seemed to place particular emphasis on these trends. At the same time, one might question whether it is correct to call these contemporary trends, since transparency and open government have a long tradition in the Nordic countries. Transparency and open government were seen as significantly more prominent in the Nordic countries while downsizing and privatisation were not so common. This is especially the case for Norway. In addition, digitalisation and collaboration among public sector organisations were seen as important in the Nordic countries. These results generally support the findings of other studies that NPG reform trends are becoming increasingly relevant in Europe (Greve & Ejersbo, 2016; Lægreid et al., 2015; Wegrich & Stimac, 2014). A common trajectory in the Nordic countries was that typical NPM reforms (privatisation, agencification, and contracting out) were considered less important than NPG reform elements (digital government, transparency, citizen participation, and collaboration). Based on these results, we see elements of a repertoire of several models in the Nordic countries. This supports the findings of Pollitt and Bouckaert (2017) in their comparison of public management reforms across 13 countries. NPM reforms are intact. Some NPM reform elements, such as performance management (see Chap. 8), focusing on outcomes and

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results, and treating users as customers, were seen as very important. The management elements of the NPM movement were, overall, seen as much more important than the marketisation elements. At the same time, ‘reducing red tape’, which is more strongly associated with traditional public administration reforms, was also seen as relatively important. Taken together, this generates a picture that supports the argument that public administration is a mixed order of partly overlapping, partly supplementary, and partly competing elements that have a rather compound nature (Olsen, 2010). It also reflects the finding that managerialism has not lost its standing in the post-NPM era, although it might have shifted towards a new generation of post-NPM managerialism exemplified by ‘networked governance’, and may also be seen more pragmatically as only one set of tools in a larger tool bag (Painter, 2011). In contrast to the previous picture of the Nordic countries as reluctant reformers (Olsen, 1996), they now seem to be rather active and eager. The picture that emerges is one of agile administrations, inclined to adopt new reform elements. Management Instruments: A Combination of Steering, Economy, and Quality Tools Management instruments are the specific tools used by governments or managers. Different management instruments play an important role in carrying out reforms. We have grouped the different management instruments into three categories: (1) instruments related to quality, (2) instruments related to steering, and (3) instruments related to the economy (Ejersbo & Greve, 2016). The Nordic executives said they used instruments related to steering, such as strategic planning, management by objectives, performance appraisal talks, and risk management, to a fairly large extent (see Chap. 7). The executives also stood out in their assessment of the use of instruments related to the economy. This is especially the case for Sweden. Both steering and economy-related instruments can be categorised as typical NPM instruments. Also, different forms of decentralisation and performance-­related pay were used frequently in the Nordic countries. In relation to instruments related to quality, the respondents from the Nordic countries reported that codes of conduct, as well as customer surveys and quality management, were also fairly common.

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A wide variety of public management instruments are in use. The Nordic countries have opted to choose from the whole ‘menu’. This would be in line with the argument that new organisational ‘recipes’ travel into organisations, which then try to incorporate them into their practice (Røvik, 2011). It also means that the Nordic countries have not taken on board the whole NPM concept, but they have rather gradually built certain management instruments into their public management systems. They have been able to choose the instruments they want to employ and have downplayed others, resulting in what we may call a flexible approach to management instruments. Second, instruments related to quality appear to be present alongside instruments from the NPM menu. Unlike the more clear-cut NPM model, the Nordic countries have not limited their choice of instruments to those related to the economy and steering. This reflects the fact that they have sought to improve and develop their welfare state models. Quality instruments can aid strategy, while steering instruments may secure the longer-­ term viability of the welfare state. It also corresponds well with the categorisation of the Nordic countries as ‘modernisers’ (Pollitt & Bouckaert, 2017).

Country Variations Matter Country differences have a significant effect on reform features when controlling for structural features, such as administrative level, position, size, and tasks. Iceland and Sweden are different on all reform process indicators (Ejersbo & Greve, 2016; Lægreid & Rykkja, 2016). Compared with Sweden, the Icelandic reform processes were seen as more crisis-driven, bottom-up, and driven by bureaucrats but also as more contested by the unions and with low public involvement. Regarding crisis-driven reform processes, Iceland is a deviant case. The Finnish processes were seen as more top-down but also driven by bureaucrats, contested by the unions, and having little public involvement. Denmark showed the same pattern as Finland, except that there was no effect on top-down versus bottom-up processes. Norway also had a more bottom-up and bureaucrat-driven reform process compared with Sweden. Overall, it is difficult to see a convergent Nordic model of reform processes. There seem to be many drivers of reforms, and they have different strengths across countries. There is also a difference between the Swedish model and the other Scandinavian

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countries, especially regarding the processes seen as political- or bureaucrat-driven. If we look at reform trends, we also see statistically significant country differences. The exception is transparency, for which there is clearly a Nordic model. Overall, it is the most important reform trend in the Nordic countries. On this measure, there are small differences between the Nordic countries, but large differences between the Nordic countries and the rest of Europe. Regarding downsizing, there are important differences between the Nordic countries. Especially Norway scored low, while Iceland scored high. This indicates that the financial crisis, which hit Iceland the hardest, had an important impact. Regarding digital government and performance management, all countries except for Iceland scored higher than Sweden, indicating that there is a distinct Swedish model along these two reform trends. Regarding the importance of collaboration and co-operation as a reform trend, the picture is more mixed. Finland scored higher than Sweden, while Norway and Iceland scored lower, and there were no effects for Denmark. Regarding reform content, there were significant country effects on the cost-cutting/service improvement dimension. Iceland, Finland, and Denmark scored higher than Sweden on cost-cutting, whereas Norway scored lower. The Norwegian reforms were also seen as more consistent, comprehensive, and substantive than the Swedish reforms. Examining the management instruments, Sweden is a deviant case for instruments related to the economy, such as performance pay, the decentralisation of financial and staffing decisions, and cost accounting systems. Regarding these instruments, it is more relevant to talk about a Swedish model than a Nordic model. As for instruments related to quality, respondents from Norway and Iceland scored higher than those from Sweden, whereas there were no large differences between the executives in Denmark and Finland. On instruments related to steering, the executives in Finland scored significantly higher and Iceland lower than Sweden. Overall, the main picture is that there are important country differences between the Nordic countries regarding reform processes, trends, and content, as well as management instruments. Structural features, such as size, administrative level, and tasks, also matter. This picture supports our expectations of an agile and adaptive reform trajectory in the Nordic countries, where the public administration, at the same time, takes contextual and situational factors into account.

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A Nordic Compound and Layered Reform Model The analysis of reform processes, trends, content, and management instruments shows that the Nordic countries have taken a rather pragmatic approach to recent public management reforms. Overall, the management components of NPM were present to a greater extent than the market components. At the same time, there was also a strong adherence to NPG reforms. The ‘management bureaucracy’ (Hall, 2015) that previously characterised Nordic administrative reforms, therefore, seems to have been supplemented by NPG reforms. The choice of management and reforms seems to depend on the circumstances rather than on the adoption of a one-best-way orientation that fits all (Alford & Hughes, 2008). It also testifies to the importance of historical legacy and contextual factors, as well as to a trend towards more complex and hybrid reform patterns (Christensen and Lægreid 2009). Overall, our findings correspond to the expectations suggested by the theory of gradual institutional change, characterised by layering and adaptation (see Chap. 18). Revisiting our expectations, most of them are supported. The reform trajectories reported by the Nordic executives are characterised by pragmatism, combining continuity and change, which produces gradual transformation. The overall picture is one that speaks more of system maintenance than radical change. Second, there is no one-factor explanation or driver behind the perceived reform processes. Instead, there seems to be a combination of external and internal drivers. The reforms are seen neither as top-down nor as bottom-up, but as a combination of the two. They are planned but also crisis driven. They are driven by bureaucrats as well as by politicians. They are supported as well as contested by civil service unions, and there is a rather high degree of public involvement in the reform processes. The perceived reform content is a trade-off between different features. The result is a combination of substantial and symbolic reforms, of comprehensive and partial reforms, and of consistent and inconsistent reforms. Overall, the reforms are oriented towards service improvement rather than cost-cutting. Third, the reform trends can be seen as an indication of a mixture of different reform packages, representing elements of NPM, NPG, and neo-­ Weberian reforms. Different reform elements, such as contracting out, performance management, public–private partnerships, and transparency, tend to overlap and can be linked to different reform packages (Pollitt &

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Bouckaert, 2017). Adding to that, some reform components within each package are heavily used, while others are applied to a lesser extent. Some NPM features, such as privatisation and contracting out, were used to a lesser extent, while others, such as performance management, were more widespread. Fourth, our analysis shows that there are many partly overlapping and supplementary reform instruments in use. Instruments relating to quality are supplemented by instruments related to steering and the economy. Thus, we see a mixture of different means and measures more or less tightly linked to overall reform trends. Fifth, we see different perceptions of reform processes, trends, and reform content, as well as management instruments. Sweden seems to be a deviant case, scoring low on digital governance and high on economic management tools, such as decentralised financial and staff decisions, and performance management. Iceland scored high on crisis-driven reforms with low public involvement; its reforms were seen as contested by the unions and as focusing on cost-cutting and downsizing, while Norway displayed the opposite pattern. Also, Finland and Denmark differed from Sweden regarding the perception of the extent of bureaucrat-driven reforms and whether they were contested by the unions and characterised by little public involvement. The only common reform trend across the five Nordic countries was transparency. Thus, it seems that reform features in the Nordic countries are related to contextual features, management style, and administrative tradition. This is in accordance with the assumption of reforms as complex, agile, and adaptive. Overall, the Nordic countries can be characterised as modernisers with balanced performance management systems, an orientation towards decentralised public service delivery, and an emphasis on whole-of-­ government co-ordination coupled with transparency initiatives. They can also be seen as modernisers when it comes to public management reform. Management-based reforms are adopted to a great extent, but more as a carefully considered performance management reform system, which also incorporates citizens’ perspectives. The result is a pragmatic performance management regime. Traditional values, such as social accountability, transparency, and openness, trust, Rechtstaat values, and professional standards are still strong, even though NPM reforms have increased marketisation and efficiency concerns. A public sector ethos seems to be strong and robust in the Nordic administrative systems.

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It is also important to take the point of departure into account. Agencification has a very long history in the Nordic countries. The same goes for transparency and openness, which were on the reform agenda long before NPM became a popular reform trend. Transparency seems to be a strong common reform trend in the Nordic countries. The same goes for the involvement of stakeholders in the reform process. Thus, our survey results indicate that the Nordic countries have adapted to changed circumstances without sacrificing their historical, institutionally induced paths of modernisation. It is necessary to consider formal structures, culture, and the environment when trying to assess constraints on central actors’ ability to conduct reforms. In this regard, a transformative perspective on public management reform may capture well what public sector reform in the Nordic countries is about (Christensen & Lægreid, 2007b). The experience of the Nordic countries indicates that history and administrative traditions seem to matter. However, it is also important to recognise their more deliberate reform attempts and the ability of the Nordic countries to build agile and adaptive public sectors by adapting to external changes and incorporating new reform trends.

Conclusion Our data show that the Nordic countries have been dynamic in incorporating new external reform elements into the public sector. What we see can be understood as incremental change processes producing discontinuity rather than a breakdown and replacement of previous arrangements (Streeck & Thelen, 2005). Reforms seem to have become a routine activity in which one set of reforms tends to generate a new one (Brunsson & Olsen, 1993). The administrative apparatus consists of composite institutional arrangements with partly competing views of how the public administration should be organised and structured. We face institutional syncretism and an agile and adaptive reform pattern (Ansell & Trondal, 2018). This tends to increase the need for continuous reforms that might lead to transformative changes over time. The reforms are not necessarily coherent, and there might be a loose coupling between big reform ideas and specific reform tools. Thus, administrative reforms should be analysed as part of the ecologies of nested and co-evolving reforms (Egeberg & Trondal, 2018; Olsen, 2010). ‘Meta-reform’ concepts, such as NPM, NPG, or NWS, can be informative but do not take us very far. They are often not mutually exclusive terms, and the links between smaller reform

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tools and the big reform trajectories might be rather loose. The idea of reform phases, where new reforms replace old ones sequentially, gets little support in our material. Rather, our analysis indicates that the reform trends are complementary and supplementary rather than alternative. Our analysis has further revealed a layered, complex, and hybrid Nordic administrative reform model in which new reform elements are added to existing ones. The reform impulses come from many directions and take different forms. The Nordic countries have been influenced by various governance ideas. They display a modern managerial and performance management perspective on public sector reform coupled with participation and consultation, increasing awareness of the necessity of co-­ ordination in networks and a continued emphasis on transparency. This is, to some extent, the NWS that Pollitt and Bouckaert (2017) discussed, with an emphasis on performance and the added nuance of transparency and co-ordination in a whole-of-government form (Christensen & Lægreid, 2007a). A mix of reform elements is used, although managerial tools are at the forefront. The overall reform narrative is one of modernisation with a combination of management, performance management, decentralisation, whole-of-government co-ordination in networks, and transparency. The Nordic model, thus, emerges as a mixed system (Olsen, 2010) combining professional governance, stakeholder engagement, legality, and the more traditional Weberian bureaucratic principles with a limited dose of market-based governance. The reforms are more system-­ maintaining than system-transforming, characterised by pragmatism and incrementalism. In sum, the Nordic countries have been active reformers, and the reform pattern stands out as complex. Both old and new institutional ideas and practices have been adopted on top of one another. As reforms continue, governance ideas and practices endure in an ensemble. The result is a rather mixed governance structure. The Nordic countries emerge as eager reformers, applying a wide repertoire of different reform means and measures. This leads us to conclude that the Nordic governments may also be characterised as truly agile and adaptive.

References Alford, J., & Hughes, O. (2008). Public value pragmatism as the next phase of public management. The American Review of Public Administration, 38(2), 130–148. https://doi.org/10.1177/0275074008314203

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Greve, C., & Ejersbo, N. (2016). Reform context and status. In C.  Greve, P. Lægreid, & L. H. Rykkja (Eds.), Nordic administrative reforms: Lessons for public management (pp. 37–56). Palgrave Macmillan. Greve, C., Lægreid, P., & Rykkja, L.  H. (2016). The Nordic model revisited: Active reformers and high performing public administration. In C.  Greve, P. Lægreid, & L. H. Rykkja (Eds.), Nordic administrative reforms: Lessons for public management (pp. 189–212). Palgrave Macmillan. Hall, P. (2015). The Swedish administrative model. In J. Pierre (Ed.), The Oxford handbook of Swedish politics (pp. 299–314). Oxford University Press. Hammerschmid, G., Van de Walle, S., Andrew, R., Bezes, P., & (Eds.). (2016). Public administration reforms in Europe: The view from the top. Edward Elgar. Jacobsson, B., Pierre, J., & Sundstrøm, G. (2015). Governing the embedded state. Oxford University Press. Janssen, M., & van der Voort, H. (2016). Adaptive governance: Towards a stable, accountable and responsive government. Government Information Quarterly, 33(1), 1–5. https://doi.org/10.1016/j.giq.2016.02.003 Kickert, W. J. M., & Van der Meer, F.-B. (2011). Small, slow, and gradual reform: What can historical institutionalism tell us? International Journal of Public Sector Administration, 34(8), 475–485. https://doi.org/10.1080/0190069 2.2011.583768 Knutsen, O. (Ed.). (2017). The Nordic models in political science. Fagbokforlaget. Lægreid, P. (2017). Nordic administrative traditions. In P. Nedergaard & A. Wivel (Eds.), The Routledge handbook on Scandinavian politics (pp.  80–91). Routledge. Lægreid, P., & Rykkja, L.  H. (2016). Administrative reform: Processes, trends, and content. In C. Greve, P. Lægreid, & L. H. Rykkja (Eds.), Nordic administrative reforms: Lessons for public management (pp.  105–128). Palgrave Macmillan. Lægreid, P., Sarapuu, K., Rykkja, L. H., & Randma-Liiv, T. (2015). New coordination challenges in the welfare state. Public Management Review, 17(7), 927–939. https://doi.org/10.1080/14719037.2015.1029344 Mahoney, J. M., & Thelen, K. (2010). Explaining institutional change. Cambridge University Press. Olsen, J.  P. (1988). Administrative reforms and theories of organizations. In C. Campbell & B. G. Peters (Eds.), Organizing governance & governing organizations (pp. 233–254). Pittsburgh University Press. Olsen, J. P. (1996). Norway: Slow learner or another triumph of the tortoise? In J. P. Olsen & B. G. Peters (Eds.), Lessons from experience: Experimental reforms in eight democracies (pp. 180–213). Scandinavian University Press. Olsen, J. P. (1997). Institutional design in democratic context. Journal of Political Philosophy, 5(3), 203–229. https://doi.org/10.1111/1467-­9760.00032

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Olsen, J. P. (2009). Change and continuity: An institutional approach to institutions of democratic governance. European Political Science Review, 1(1), 3–32. https://doi.org/10.1017/S1755773909000022 Olsen, J. P. (2010). Governing through institution building. Oxford University Press. Painter, M. (2011). Managerialism and models of management. In T. Christensen & P. Lægreid (Eds.), The Ashgate research companion to the new public management (pp. 237–250). Ashgate. Painter, M., & Peters, B.  G. (2010). Traditions and public administration. Palgrave Macmillan. Pollitt, C., & Bouckaert, G. (2017). Public management reform (4th ed.). Oxford University Press. Røvik, K. A. (2011). From fashion to virus: An alternative theory of organizations’ handling of management ideas. Organization Studies, 32(5), 631–653. https:// doi.org/10.1177/0170840611405426 Streeck, W., & Thelen, K. (2005). Beyond continuity. Oxford University Press. Torfing, J., Peters, B.  G., Pierre, J., & Sørensen, E. (2012). Interactive governance. Oxford University Press. Torfing, J., Andersen, L. B., Greve, C., & Klausen, K. K. (2020). Public governance paradigms. Competing and co-existing. Edward Elgar. Wegrich, K., & Stimac, V. (2014). Coordination capacity. In M.  Lodge & K. Wegrich (Eds.), The problem-solving capacity of the modern state (pp. 41–62). Oxford University Press. Wivel, A., & Nedregaard, P. (2018). Introduction: Scandinavian politics between myths and reality. In P. Nedregaard & A. Wivel (Eds.), The Routledge handbook of Scandinavian politics (pp. 1–10). Routledge.

PART II

Structures and Space: Governing Polity

CHAPTER 3

The Finnish Politico-Administrative System Jan-Erik Johanson, Emmi-Niina Kujala, Timo Moilanen, Elias Pekkola, and Onni Pekonen

Introduction This chapter sets the stage for our volume on Finnish public administration. The chapter begins by introducing the basic ideas and values of Finnish parliamentarianism that build the foundation for the Finnish legal and administrative system. After this, we briefly describe the politico-­ administrative system and the main phases of development from the 1980s onwards. Then we will turn to a description of the main institutions forming the division of power in Finland and their administration in Finland; that is, the parliament, the government and the courts of law. In addition, we will briefly discuss the civil service as an institution. We will mainly

J.-E. Johanson (*) • E.-N. Kujala • E. Pekkola Tampere University, Tampere, Finland e-mail: [email protected] T. Moilanen Ministry of Finance, Helsinki, Finland O. Pekonen Finnish Innovation Fund Sitra, Helsinki, Finland © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_3

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focus on the government, since its role as a political institution as well as an administrative apparatus is pivotal for the volume. The role and definition of the government have produced a lively discussion in Finland since the change in the political system from semi-presidential to more parliamentary in direction, emphasising the role of the prime minister. Thus, the role of the government is disputable from a number of perspectives. Consequently, we define the main trends and traditions as well as the associated risks for government reforms and administrative traditions. We deal with the government programme as the most important political document for setting up the mid-term development plans for the Finnish public administration. As a final item in this chapter, we examine the civil service, especially its ethics, as an important grassroots-level instrument for supporting the viability of the politico-administrative system.

The Politico-Administrative System Finland is a constitutional democracy, which is based on the delegation of powers between the legislature (parliament), the executive (government, president) and the judiciary (courts). The administration consists of the highest elected bodies, which are the parliament, the President of the Republic and the government, and of independent courts of law, the state administration and other public administrations. The Finnish political system has gradually changed from a semi-­ presidential system to a more parliamentary system since the 1980s. The change has been influenced by the collapse of the Soviet Union (1991), membership of the EU (1995) and the increased coalition capability of the parties. Most notably, the new constitution took force in 2000 (Paloheimo, 2003). It unified the diffuse structure of the previous constitutional legislation of 1919 that originated when Finland gained independence from Russia in 1917. Within the new Constitution, Finland has become a parliamentary democracy, losing many of its previous semi-presidential aspects (Nousiainen, 2001). Together with changes in parliamentary voting procedures in relaxing the rules for qualified minorities (Mattila, 1997), governments enjoying a majority in parliament have ample tools with which to execute their policies. Most importantly, the new Constitution defines the authority between the president, government and legislature more clearly. The role of the president has diminished, prerogatives of the cabinet of ministers have increased and the prime minister has become a de facto executive head of

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the country (Paloheimo, 2003). The elected president continues to hold a key position in the operation of foreign affairs, but the role of the president has diminished regarding internal affairs. According to the current Constitution, foreign policy is directed by the president in co-­operation with the government. EU affairs are excluded from foreign policy and are directed by the government and parliament (Paloheimo, 2003). Moreover, the prime minister is the representative of the country in EU affairs (Kulovesi, 2000). The Finnish parliamentary electoral system is based on proportional representation (the D’Hondt method) and preferential candidate selection, in which voters may choose any one of the candidates from the party’s list of candidates. The Finnish electoral system is very individually oriented. Finnish citizens are obliged to vote for a particular candidate, and they cannot give their vote only to the preferred party as in other Nordic countries. The country is divided into 13 electoral districts. Two hundred members of parliament are elected to the Finnish parliament for one four-year term of office at a time. The outcome of elections with parliamentary representation has resulted in, on average, the presence of five parties in the parliament since World War II, which makes the Finnish parliament one of the most fragmented legislatures among European countries (Raunio, 2005). After the parliamentary elections, the chair of parliament nominates the formateur of the government. The formateur is typically the chair of the biggest party and often becomes the prime minister. The formateur calls some of the parties forward for government negotiations (on the government’s programme and the composition of the government) and proposes the name of the prime minister, who is selected with a majority of parliament. The formateur of the government poses a few questions to the different parties on central themes for the possible future government’s composition and main objectives for the upcoming parliamentary term. Based on these answers, the leader of the negotiations decides which of the parties will continue with the actual negotiations relating to the government programme (Finnish Parliament, 2022). (See the government programme later in this chapter.) After the election of the prime minister, the government programme is submitted to parliament in the form of a statement and, after that, parliament debates the programme and holds a mandatory confidence vote for the programme to be accepted and come into effect (Raunio, 2004).

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The composition of the government does not follow strict block lines between the political left and right, as in neighbouring Nordic countries, such as Sweden and Norway (Paloheimo, 2003). Since the late 1970s, the country has been ruled by majority governments, and one or two out of the three main parties (the Social Democrats, the Centre Party and the National Coalition Party, that is, the Conservatives) have formed the backbone of the government in their various constellations (Raunio, 2005). These three parties are all consensus-prone (Paloheimo, 2003; Raunio, 2005). However, the situation changed in the 2011 election when the right-wing populist party (Kestilä, 2006), the Finns Party (formerly called the True Finns in English), had a massive victory in the elections, resulting in it gaining 19.1% of the vote (Arter, 2013). After the 2015 election, the Finns Party became a member of the government coalition and became part of the opposition after the 2019 elections. In 2022, the Finns Party was still a major player in Finnish politics, and it remains to be seen as to what role it will take on.

Parliamentarism Governmental powers are exercised by the President of the Republic and the government, whose members must have the confidence of parliament (Constitution of Finland, 1999). In other words, in accordance with the principles of parliamentarism, the government must enjoy the confidence of a majority of MPs. The Finnish parliament supervises the government both politically and juridically. It elects the prime minister and votes for the confidence of the new Government after the Government has presented its programme to parliament. Parliament enjoys extensive rights of access to information in terms of parliamentary control of the government. The parliament and the MPs have the right to receive the information they need when considering matters from the government and its subordinate authorities. The ministers must ensure that parliamentary committees and other parliamentary organs receive the necessary documents and other information without delay (Constitution of Finland, 1999). The government must submit annual reports on governmental activities and on the measures undertaken in response to parliamentary decisions, as well as annual reports on state finances and adherence to the budget to parliament (Constitution of Finland, 1999). The MPs can

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present their evaluations of the measures when the parliament considers, for example, government reports and statements and the prime minister’s announcements.

Political Accountability in Finnish Parliamentarianism The principles of parliamentarism require that parliamentary responsibility can be measured in a practical and sufficiently clear manner, if necessary. Parliament’s confidence in the government, or lack thereof, can only be decided with the opinion of the parliament, but the process can be started not only on the initiative of the parliament but also on the government’s initiative. The government can measure parliament’s confidence when a government statement is discussed in parliament. The discussion of a statement usually ends in a vote of confidence. The government can use statements to bring key political issues and solutions to the parliament for evaluation (Hidén, 2019). Parliament can call the government to account. A group of at least 20 MPs may address an interpellation with the government or with an individual minister. The government must reply to it in parliament’s plenary session within 15 days. A vote of confidence will be held if a motion for it is made and seconded during the debate on an interpellation (Constitution of Finland, 1999). If a motion of no confidence is passed based on a simple majority, the President of the Republic shall exempt the government or its minister. An interpellation is usually used to debate and gain publicity for an important issue for which the opposition believes the government’s measures are inadequate or misplaced. The annual number of interpellations varied from two to eight after the enactment of the current Constitution (Eduskunta, 2022). Although an interpellation is considered a heavy weapon of the opposition, interpellations rarely result in a vote of confidence, and interpellations have not resulted in any government resignations since 1958 (Hidén, 2019). Interpellations and government statements are the primary tools for measuring parliament’s confidence in the government. However, confidence, and especially its absence, can be flexibly investigated in the political interaction between the parliament and the government. The government can decide to ask for a vote of confidence on any proposal that the parliament will decide on, and thus, it uses the vote as an

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opportunity to find out if the government has the conditions for continuing its activities and political line (Hidén, 2019). Individual MPs can submit a written question to or ask an oral question of a minister on a matter falling within the minister’s mandate. After the Prime Minister’s Office has received the question, a ministry has 21 days to provide a written answer to the parliament. Parliamentary question time offers an opportunity for a livelier and more improvised debate. During question time, for an hour once a week, ministers answer MPs’ brief questions in a televised plenary session. The questions can be devoted to a specific theme decided by the Speaker’s Council, and ministers can use no more than a minute to answer a question.

Legal and Financial Accountability in Finnish Parliamentarisms The parliament’s Audit Committee is responsible for the parliamentary oversight of central government finances. The Committee examines matters and government reports and reports its findings to the parliament, which are then examined and discussed in a plenary session. Legal parliamentary oversight focuses on the activities of government members. Parliament can decide to bring charges if it believes that a minister has failed to comply with legislation. The parliament’s Constitutional Law Committee is responsible, among other things, for issuing statements on the constitutionality of legislative proposals, as well as their relation to international human rights (see Chap. 10 in this volume) treaties and the (un)lawfulness of the actions of a minister. The decision to bring a charge against a member of the government for unlawful conduct in office is made by the parliament after having obtained an opinion from the Constitutional Law Committee concerning the unlawfulness of the actions of the minister (Constitution of Finland, 1999). Furthermore, the Chancellor of Justice, appointed by the President of the Republic, oversees the legality of the activities of the government and the President of the Republic. He or she also supervises the authorities so that they comply with the law and fulfil their duties. The Chancellor of Justice resolves matters regarding the supervision of the government but also of principles and of far-reaching consequences. The Chancellor must provide the President, the government and ministries with information

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and opinions on legal issues upon request. The Chancellor can take the initiative in investigating a matter, but citizens can also file complaints with him or her if they suspect an authority’s activities are illegal (Chancellor of Justice, n.d.). The Parliamentary Ombudsman, appointed by parliament, works to ensure that public authorities comply with legislation, primarily by investigating the complaints received. The Ombudsman concentrates on promoting fundamental rights and human rights. The Ombudsman conducts oversight impartially and independently of parliament but submits reports to the parliament. Anyone can file a complaint to the Parliamentary Ombudsman. The Ombudsman can also take the initiative in investigating a specific matter (Parliamentary Ombudsman of Finland, n.d.). The Constitutional Law Committee considers the reports of the Chancellor of Justice, the Parliamentary Ombudsman and the government’s annual report. The committee may consult with the Chancellor of Justice and the Parliamentary Ombudsman. The requirement of parliamentary responsibility, and the awareness of it, characterises almost all the significant political activities of the parliament. The principle is shaping and steering the work and culture of the system every day, and it is in this sense perhaps more important than the rather rare occasions when confidence is explicitly measured in votes (Hidén, 2019). Although the different instruments and actors have an important role in holding the government responsible and accountable, in practice, Finnish governments have resigned in recent decades mainly because of prime ministers’ resignations, which have been a result of changes in party leadership or personal political scandals. In 2019, Sipilä’s government resigned because of its inability to pass the social and healthcare reforms but continued as a caretaker government. Individual ministers have resigned because of personal scandals or due to their appointment to a high office. Individual parties have left the government because of intra-­ governmental disputes, but on these occasions, the government has not lost its majority in parliament.

Parliament (Eduskunta) According to the Constitution of Finland, the powers of the state are vested in the people who are represented by a unicameral 200-member parliament. The legislative powers are exercised by the parliament, which

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also decides on state finances (Constitution of Finland, 1999). The main tasks of the parliament are to legislate and pass laws, to debate and approve the national budget and to oversee the government. Parliament’s most important task is to enact legislation. Parliament can enact legislation based on a government proposal, a member’s motion or a citizen’s initiative. Most legislation is based on government proposals, averaging around 250 per year. It generally takes two to four months to consider a proposal, but major legislative projects can take years (Parliament of Finland, 2022). The national budget, prepared by the government, is presented to parliament annually. The budget process in parliament is time-consuming and laborious. Although most of the autumn period is devoted to debating it, changes made to the budget in parliament tend to be marginal. The speaker, assisted by two deputy speakers, directs parliamentary work. Plenary sessions are chaired by one of the speakers. The office commission consists of the speakers and four MPs. The office commission decides on parliament’s own expenses and appoints civil servants to the offices of parliament (Parliament of Finland, 2022). The parties represented in parliament organise themselves into parliamentary groups that have their own organisation, rules and practices, and they are entitled to appropriation for their day-to-day expenses, such as employing clerical staff and drafting reports. The chairpersons of the parliamentary groups of parties in government oversee the discipline in voting, hold meetings on operational matters of government and solve disputes if the government party members in parliamentary committees cannot come to an agreement over policy issues (Venho, 2014; Wiberg, 2014). Parliament debates and makes decisions regarding the proposed draft bills in its plenary sessions. Most of the preparatory work on the draft bills takes place in parliamentary committees. The plenary of the parliament cannot decide on policy issues if they have not been prepared by a parliamentary committee (Mattila, 2014). There are 16 permanent committees and parliament can, if needed, establish additional ones. The Grand Committee co-ordinates and decides on EU matters and the Constitutional Committee provides ex ante statements of the constitutionality of the bills. Overall, the mandates of the committees emulate the areas of operation of the ministries, and civil servants in the parliamentary committees are typically recruited from sector ministries in the same policy fields. The membership of MPs on the committees mirrors the proportion of the party’s seats in parliament. Most of the committee work is performed

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behind closed doors and is not open to the public, which allows for confidential discussions among members. Committees are assisted by clerks in the secretariat, led by committee secretaries. Committees invite expert witnesses to provide knowledge and independent information on the issues at hand. Most often, experts represent ministries, private businesses, universities, interest groups and non-governmental organisations (Raunio, 2021). Similar to other Nordic parliaments, the Finnish Eduskunta has been labelled as a working parliament instead of a debating parliament (Raunio & Wiberg, 2014). The MPs focus their efforts more on the committee work and the expertise it provides rather than on the plenary sessions. The primary parliamentary work is seen as taking place behind closed doors in committees, which the MPs see as the place for real influence and free deliberative discussion (Pekonen, 2011). In the continuous period of majority governments stretching from the late 1970s, parliament’s work has largely focused on ratifying the government programme and scrutinising and modifying the details of legislative bills. In this sense, the role of parliament has been argued, in public discussions, to be reduced to a rubber stamp for the government.

The President The President of the Republic is elected by direct popular vote for a six-­ year term at a time and the terms are limited to a maximum of two. Under the Constitution of Finland, executive power is vested in the President of the Republic and the government. The Government must have the confidence of parliament. Finland’s foreign policy is led by the President of the Republic in co-operation with the government. The president decides Finland’s foreign policy outlines, initiatives and directives for Finland’s representatives abroad in matters of importance, such as the recognition of foreign states, diplomatic relations, membership in international organisations and assigning delegations to international negotiations. The president is the supreme commander of the Finnish defence forces and decides on all officer appointments and on the mobilisation of the defence forces. The president confirms the laws enacted by the parliament (and submitted by the government). If the president refuses to confirm an act, parliament may pass the law without confirmation. The president has a role in ordering premature parliamentary elections by the initiative of the Prime Minister, appointing and discharging

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ministers, adopting decrees and appointing some of the key public officials and judges. The president also has other statutory duties, such as Ålandrelated matters and emergency powers, besides those specified in the Constitution (Office of the President of the Republic of Finland, 2022). In most cases, the president makes decisions based on the preparation of the cabinet. If there is disagreement over the decisions, the president cannot use alternative preparatory functions or personnel to formulate a different course of action. This gives the upper hand to the cabinet in setting the tone for the agenda (Raunio, 2010). However, the role of President extends the scope of his or her formal powers. The president is important figurehead of the country and holds a position of value leadership which gives President informal influence in domestic policy matters.

The Government The government represents the other and increasingly central arm of the executive government. ‘Government’ has multiple translations in Finnish (hallitus, valtioneuvosto) and it has multiple definitions both in the legislation and in the daily political language. Due to these meanings, it is open to different interpretations and sometimes to political disputes. According to the Office of the President, the prime minister and as many ministers as is considered necessary form the government, formerly referred to as the Council of State, and commonly also called the cabinet (Office of the President of the Republic of Finland, 2022). According to the Prime Minister’s Office, government may refer narrowly to the government composed of the prime minister and the other ministers or broadly to the state apparatus, including all ministries. The government has primary responsibility for all other policy areas not reserved for the president. The prime minister is responsible for directing the work of the government and chairing the plenary sessions of the government, which is the main decision-making body of the executive branch. The changes in the daily operations and practices of the cabinet have strengthened the importance of the ministries. The number of decisions made by the government’s plenary collective session chaired by the prime minister has diminished considerably. In 1987, the cabinet decided on 2500 issues and in 2016 on 1000 issues (Virtanen et al., 2016). What this means is that an increasing number of matters are managed by the ministries themselves. Furthermore, the nature of the decision-making culture

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in the plenary sessions discourages intervention in matters of other ministries. The challenge related to the development of the decreasing decision-­ making activity has been ambidextrous. On the one hand, it has freed up the time of the government headed by the prime minister for strategic decision-making, while decreasing its use as a ‘rubber stamp’. On the other hand, this development has weakened the role of the cabinet as the collegial decision-making body steering the ministries, while many of the decisions are also formally made in the branch ministries. Thus, to balance such development, the strengthening of the cabinet has been sought by a number of reform projects via allocating a workforce, research funds and expert knowledge for the cabinet’s use. This has often led to managerial and administrative endeavours that have had a limited impact on the administrative culture. The strengthening of ministries has also resulted in the growing importance of ministers as political leaders within their policy area. Political state secretaries were introduced in 2005 to assist the minister in tasks relating to political guidance and the preparation of matters for presentation and decision-making. They serve, by dint of the personal confidence of a minister, for the duration of that minister’s term in office. Together with special advisers to the ministers, the political staff units within ministries have gained strength. In contrast, permanent secretaries hold prime civil servant positions in ministries. Permanent secretaries are immediate superiors to the heads of departments within ministries (Tiihonen, 2007). The permanent secretaries are selected for a fixed term, which is not typically synchronous with the government term. The nomination of permanent secretaries is not officially political. Basically, there are both political and administrative management teams headed by a minister and permanent secretary, respectively, but their operation and composition vary across ministries (Tiihonen, 2016). Although state secretaries do not have the right to intervene in the duties assigned to permanent secretaries, the way that state secretaries operate, in particular, has raised concerns that politics has too much influence on the work of civil servants. The increase in government stability has to do with the changing balance between politicians and civil servants. As most governments have preserved their governing coalition since the 1980s, politicians and their political advisers have had much more time to learn the habits of government, which gives them an informational advantage over their predecessors.

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Within the cabinet there are four (cross-sectorial) legislated preparatory meetings of the government for the preparation and political guidance of the work of the government chaired by the prime minister: . The Finance Committee (FM) of the Council of State 1 2. The Foreign and Security Policy Ministerial Committee (FSPC), (TP-UTVA), which, for the last few years, has met jointly with the President of the Republic (TP-UTVA) 3. The Committee of EU Ministers (EU-MINVA) 4. The Committee of Ministers for Economic Policy (TALPOL) The cabinet may also set up additional ministerial committees. The ministerial committees have no formal decision-making power, but the role of ministerial committees in the political decision-making system is strong, as they select policy lines and formulate positions for the government agenda. In addition, the cabinet may agree to set up a ministerial working group for co-operation and co-ordination on a specific issue or set of issues, such as major cross-governmental reforms in government. The ministerial working group, its tasks and members are decided in cabinet meetings. Like the statutory ministerial committees, the ministerial working groups serve as a collegial body for government preparation and policy co-ordination (Ministerin Käsikirja, 2019). The government also has a broader definition as an organisational entity consisting of the ministries and the government plenary session format. It may, at times, refer only to the plenary session or to the ministers collectively (Finnish Government, 2022). The number of ministers is defined as part of government negotiations. The current Finnish government comprises 12 ministries. Each ministry is responsible for the preparation of matters within its mandate and for the proper functioning of administration. Ministries are discussed in more depth in the following chapter.

The Government Programme The form of the government programme has changed over the years in Finland’s history. In the early years of independence and after the wars, the parliamentary terms of different governments were short and the governments typically ruled for only a year or two (Valtioneuvosto, 2022a). The first government programme was published in 1917 right after the

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declaration of independence. The first of the government programmes was not necessarily a strategic document but more a statement of the opinions of the prime minister and a declaration of the ideologies of different ministries. Over time, the government programmes developed into more formal documents and strategic tools. In the 1960s, the programmes began to have a more structural form and they began to cover different branches of the administration and different areas of politics instead of only focusing on covering the status of the state and the declaration of the opinions of different leaders (Valtioneuvosto, 2022b). In the 1980s, parliamentary terms began to last for the full four-year electoral term (Raunio, 2004), and it was, therefore, possible to include longer-term objectives and proper plans for the implementation of the different actions and goals in government programmes (Valtioneuvosto, 2022b). In the early 2000s, each of the different ministries began to prepare their own predictions and statements for the future of their own administrative branch and the Prime Minister’s Office began to include a summary of the implementation of the ruling government’s programme. These documents are taken into account when creating new government programmes and when renewing the strategic planning and steering of the government (Virtanen et al., 2016). Today, the government programme is the most important political steering document, having direct implications for administrative policy implementation, resource allocation and strategic decision-making in ministries and local and regional administrations. The government programme is the main instrument for the government’s strategic guidance and direction. It is an action plan approved by parties included in the government and it includes the most important plans and domains of the government (Ministry of Finance [MoF], 2022a, c, d; Valtioneuvosto, 2022d). After the reform of the constitutional law in the early 1990s, the government programme gained an official position within the parliamentary system in Finland. It is a binding document that is prepared in the negotiations between the government parties (Jyränki, 2000; Virtanen et  al., 2016). The government document has become more restrictive in the sense that new policies cannot usually be placed on the government agenda if they have not been included in the programme. Consequently, the government programme serves as an instrument to restrict the tendency to overspend common resources in multi-party governments. In this way, the government programme puts forward a strategic approach in orienting government action and resource distribution, but it suffers from an inability to

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adapt to unanticipated changes and makes it difficult to re-allocate resources between ministries during a government’s term. After the government programme has been accepted by the parliament, the government decides on the parliamentary term’s spending limits. The government negotiates on the ceiling for budget expenditure and the rules for governing the finances at the beginning of the parliamentary term (about government finances see Chap. 7). The agreement applies for the entire four-year parliamentary term (MoF, 2022b). After the completion of the programme and following the agreement on the finances, the government programme can be implemented. The Prime Minister’s Office, led by the prime minister, is responsible for overall strategic guidance and the implementation of the government programme (Valtioneuvosto, 2022c). An implementation plan for the government programme is created to set more specific action plans and objectives, key projects and responsibilities (MoF, 2022a). Each ministry is responsible for the projects and objectives in its branch. In addition, the Prime Minister’s Office has formulated procedures for the monthly monitoring of the implementation of the programme (Valtioneuvosto, 2022c; Virtanen et al., 2016). The supervision of the programme has also developed over the years. Prime Minister Lipponen’s first government (1995–1999) launched a programme portfolio to identify the most important actions in the late 1990s, which was later developed more by Prime Minister Vanhanen’s first government (2003–2007) to highlight a more strategic and horizontal method for steering (Virtanen et al., 2016). As Prime Minister Vanhanen’s second government (2007–2010) and Prime Minister Sipilä’s government (2015–2019) took office, the government programmes began to appear as more strategic tools and documents: the main goal for these improvements was to focus on broader concepts and issues rather than on numerous details, as, by then, government programmes had developed into documents including hundreds of different projects and action plans. Prime Minister Sipilä’s government programme also identified desirable trends and visions for the future and longer time spans for objectives (Valtioneuvosto, 2019; Virtanen et  al., 2016). Overall, the government programme has gained more significance as a strategic steering document to guide the workings of the government (Valtioneuvoston kanslia, 2011).

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Courts of Law Judicial powers are exercised by independent courts of law, with the Supreme Court and the Supreme Administrative Court as the highest instances (Constitution of Finland, 1999). All courts are independent in exercising their jurisdiction. General courts include district courts, courts of appeal and the Supreme Court as the final instance. The Courts dealing with aspects of public administration are the Administrative Courts and the Supreme Administrative Court as the final instance in administrative judicial procedural matters. Special courts include the Market Court, the Labour Court and the Insurance Court (Finnish Courts, 2022). In Finland, the constitutionality of laws is examined in advance by parliament in its Constitutional Law Committee (see Chaps. 9 and 10). No constitutional court exists in Finland (Finnish Courts, 2022). There has been some discussion on the independence of the judiciary (Tuori, 2005), which, in practice, resulted in examining the possibilities of establishing an agency for the court administration that would weaken the link between courts and the Ministry of Justice (MoJ), thereby strengthening the independence of courts and diminishing the influence of the performance management (see Chap. 8) and strategic steering by the government. Consequently, the National Courts Administration, an independent central agency that serves the entire court system within the administrative branch of the MoJ, was established in 2020. The Courts Administration is responsible for ensuring the quality, efficient organisation and appropriateness of courts in the exercise of their judicial powers.

The Civil Service The civil service’s ethics and culture are key to understanding and analysing the Finnish government. Regardless of performance-based steering and other NPM-related initiatives emphasising the role of public managers and the importance of organisation, the Finnish public administration still relies on the work, discretion and unshared responsibility of civil servants. The Finnish public service and administrative culture have long historical roots. In fact, the principles of good administration, the regulation of conflicts of interest and a merit-based civil service go back as far as to the period of Swedish rule and still constitute an integral part of Finland’s legal order and administrative tradition (Tiihonen & Ylikangas, 1992).

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Many key principles of civil service ethics are embedded in legislation. Finland does not have unified legislation to regulate matters relevant to civil service ethics. Legal norms, which are essential from the ethical perspective, can be found in numerous laws, including the Constitution, the Civil Servants’ Act (CSA), the Administrative Procedure Act, the Act on the Openness of Government Activities and the Criminal Code. For example, the acceptance of a secondary occupation, the acceptance of gifts and other benefits, and senior civil servant’s duty to disclose private interests are laid down in the CSA. Administrative ethics has traditionally been predominated by a compliance approach, which emphasises the importance of external controls on behaviour, favouring formal and detailed rules and procedures. Behaviour which is in line with the rules is considered correct, whereas the violation of the rules is considered unethical and is penalised. During the last few decades, activities in the field of civil service ethics have been deeply influenced by the emergence of the so-called integrity approach (Paine, 1994). According to this paradigm, it is neither possible nor reasonable to try to impose regulations on every imaginable situation. The integrity approach relies on a person’s own capacity to make the right moral choices, which is supported through codes of ethics, training, leadership and professional and fair human resource policies aiming to translate ethical standards into actual behaviour. These two approaches should not be considered mutually exclusive, and in practice they should be combined and considered complementary. In practice, civil servants and political decision-makers exercise discretion. In many cases, ethical deliberations begin where legal norms end. The key materials in fostering the integrity-based approach in Finland have been the government’s Decision in Principle on the State’s Personnel Policy and its definition of core values in the state administration, the recommendations made in the Values for Daily Life Project (MoF, 2004) and the Values in the Daily Job Handbook (MoF, 2005). Additionally, the Committee on Ethics of State Civil Servants stressed the importance of the integrity approach and considered it essential for increasing awareness of civil service ethics (MoF, 2014). Recent surveys on civil servants (Moilanen, 2017) and citizens (MoF, 2017) underline the importance of traditional administrative values. Expertise, impartiality and the rule of law are considered core values in central government, followed by openness, trust and service principles. Similar trends were also observed in previous surveys carried out in 1999

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(MoF, 2000) and 2007 (Peiponen, 2007). The public values and codes of ethics are empty litanies if they are not shared and discussed within a work community or more widely in public. According to civil servants, values are usually discussed during informal encounters, internal meetings and training events. Specific events focusing on values’ discussions, such as Ethics Day, are less frequent. It is alarming to note that many experts, especially those working in ministries, stated that discussions on values were completely lacking (26%). Civil servants held that the state of civil service ethics had either improved (48%) or remained unchanged (31%) over the previous ten years. On the other hand, a fifth of the respondents (20%) considered that civil service ethics had deteriorated (see Chap. 11). Most of them felt that the deterioration was due to worsening working conditions in central government. Reasons for this poor trend were deemed to be savings in central government finances, a decrease in personnel resources and the tightness of schedules for legal drafting. Experts, in particular, viewed deficient preparations as an ethical problem. In addition to the values-based ethics work, considerable attention has been paid to drafting various instructions and directives (secondary occupations, hospitality, gifts and benefits, trips offered by outsiders, waiting period contracts). In practice, ethics codes and instructions restate and elaborate the values and principles already embodied in legislation. This is useful since the relevant values and standards in many countries are scattered in numerous legal documents, which makes it difficult to locate the information and to understand the general idea of public service. Properly used, legislation and codes complement each other effectively. In addition, the introduction of a new independent body in 2015, the Advisory Board on Civil Service Ethics, is a remarkable step towards institutionalising professional ethics management. Along with the activities to strengthen the integrity of the civil service, several measures have been taken to prevent and combat corruption. Over the last few years, bribery legislation has become more comprehensive. More research has been conducted on corruption, and civil servants’ abilities to recognise various forms of corruption have improved. In 2021, the government adopted the National Anti-corruption Strategy and Action Plan (MoJ, 2021). The MoJ has appointed a broad-based Anti-corruption Cooperation Network, and government agencies have received new guidelines to combat corruption (MoF, 2021).

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Whistle-blower protection and the regulation of lobbying activities are increasingly under the public spotlight. The new law 1171/2022 to protect whistle-blowers who report breaches of EU law or certain national legislation through internal and external reporting channels came into force on 1 January 2023. It implements the EU’s Whistle-Blower Directive 2019/1937. Finland will become the first Nordic country to introduce lobbying regulations. The purpose of the new Transparency Register, operated by the National Audit Office of Finland, is to increase transparency in the decision-making process and hence enhance trust in government. The new law is expected to come into force in 2023, requiring lobbying organisations to inform the public about their lobbying activities.

From a Finnish to a European Public Administration? The Finnish politico-administrative system has been moving from a semi-­ presidential system to a parliamentarian system. The prime minister is the main executive officer in the Finnish system, represents Finland in the EU and has a de facto influence over foreign and security policies. The parliament has an exceptional role in EU matters in Finland since the Grand Committee co-ordinates and decides on EU matters. The role of the president has become more ceremonial and symbolic; however, the president is elected through a referendum by direct popular vote and he or she still directs the foreign and security policies in collaboration with the government. The role of prime minister has moved from an idea of primus inter pares towards a strong personalised leader, which has, on the one hand, strengthened the role and accountability of the prime minister, but on the other hand, it has challenged the collegiality of the cabinet of ministers and emphasised the role of government negotiations and the government programme that sets the framework for the political consensus. Meanwhile, the role of the cabinet of ministers has become more strategic and the number of decisions by the collegium as a whole has decreased. The Finnish system has been based on consensus and large coalition governments holding a majority in parliament for several decades. Somewhat paradoxically, this has decreased the decisive power of the Finnish parliament, despite the fact that parliament is a ‘working parliament’ with a real impact on the bills due to the work that goes on in the various committees. The parliament also holds the highest power to interpret the Constitution—a task which is trusted to constitutional courts in

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many other countries. The Constitutional Committee provides ex ante statements regarding the constitutionality of bills. The continuity of the Finnish public administration is based on the civil service and comparably independent public servants from the political realm. With few exceptions, even the most senior civil servant posts and supreme overseers of the law are formally selected based on their merit, although political allegiance plays a role in appointment of the highest officials within civil service. However, the administrative culture is changing from rule obedience towards a more holistic view on public values, ethics and integrity as part of the administrative culture. The management methods originated from the private enterprises following the market emulating reforms of the past decades add a nuance in ethical considerations. In addition, European anti-corruption measures, regulation on lobbyism and the whistle-blower tradition have landed in Finland.

References Arter, D. (2013). The ‘Hows’, not the ‘Whys’ or the ‘Wherefores’: The role of intra‐party competition in the 2011 breakthrough of the true Finns. Scandinavian Political Studies, 36(2), 99–120. Chancellor of Justice. (n.d.). What does the Chancellor of Justice do? https:// oikeuskansleri.fi/en/frontpage Constitution of Finland 11 June 1999 (731/1999). https://www.finlex.fi/en/ laki/kaannokset/1999/en19990731.pdf Eduskunta. (2022). Välikysymykset vuodesta 1907 alkaen [Interpellations since 1907]. https://www.eduskunta.fi/FI/naineduskuntatoimii/kirjasto/ tietopalvelulta-­k ysyttya/Documents/V%C3%A4likysymykset%20vuosittain%201907%20l%C3%A4htien.pdf Finnish Courts. (2022). https://oikeus.fi/tuomioistuimet/en/index.html Finnish Government. (2022). https://valtioneuvosto.fi/en/government Finnish Parliament. (2022). Eduskunta hallituksen muodostajana [Parliament in the formation of Government]. https://www.eduskunta.fi/FI/naineduskuntatoimii/kirjasto/aineistot/yhteiskunta/hallituksen-­m uodostaminen-­ suomessa/Sivut/eduskunta-­hallituksen-­muodostajana.aspx. Hidén, M. (2019). Juridiikkaa ja muotoja eduskuntatyössä [Forms of law in parliament]. Eduskunta. https://www.eduskunta.fi/FI/naineduskuntatoimii/ julkaisut/Documents/ekj_6+2019.pdf. Jyränki, A. (2000). Uusi perustuslakimme [Our new Constitution]. Iura nova. Kestilä, E. (2006). Is there demand for radical right populism in the Finnish electorate? Scandinavian Political Studies, 29(3), 169–191.

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Kulovesi, K. (2000). International relations in the new Constitution of Finland. Nordic Journal of International Law, 69(4), 513–522. Mattila, M. (1997). From qualified majority to simple majority: The effects of the 1992 change in the Finnish Constitution. Scandinavian Political Studies, 20(4), 331–346. Mattila, M. (2014). Valiokuntalaitos [Committee Structure]. In T.  Raunio & M. Wiberg (Eds.), Eduskunta: Kansanvaltaa puolueiden ja hallituksen ehdoilla [Democracy conditioned by parties and government] (pp.  119–131). Gaudeamus. Ministerin käsikirja. (2019). Tietoa valtioneuvoston toiminnasta [Information on the functioning of the Government]. Valtioneuvoston julkaisuja 2019:21. Ministry of Finance. (2000). Civil Service Ethics: A study of the ground of civil service ethics, its present state and areas of development (Working Group Memoranda No. 8:2000). Ministry of Finance. (2004). Values to be part of daily job: The experiences of pilot organisations and conclusions of the working group (MoF Working Paper No. 6b:2004). Ministry of Finance. (2005). Values in the daily job: Civil servant’s ethics. A handbook for the state administration. Ministry of Finance. (2014). Valtion virkamieseettisen toimikunnan raportti VM 3/2014 [Committee on the Ethics of State Civil Servants, MoF 3/2014, recommendations in English]. Ministry of Finance. (2017). The state of civil servants’ ethics and morals: Citizens’ survey results (Ministry of Finance Publication No. 2c/2017). Kantar Public was commissioned to conduct a new citizen survey in 2022, and its findings will be released in 2023. Ministry of Finance. (2021). Korruptiontorjuntaan liittyviä ohjeita valtion virastoille ja laitoksille [MoF 2021, Anti-corruption guidelines for government agencies]. Ministry of Finance. (2022a). Central government guidance and direction. https://vm.fi/en/systems-­for-­guidance-­and-­direction Ministry of Finance. (2022b). Central government spending limits. https://vm.fi/ en/central-­government-­spending-­limits2022a Ministry of Finance. (2022c). Valtion aluehallinnon virastorakenteen ja tehtävienjaon selvityshankkeen loppuraportti [Government report on the regional administration] (Ministry of Finance Publication No. 2022:36). Ministry of Finance. (2022d). Structures, guidance and direction of administration. https://vm.fi/en/structures-­guidance-­and-­direction-­of-­administration Ministry of Justice. (2021). Government resolution on the National Anti-Corruption Strategy and Action Plan 2021–2023 (Ministry of Justice of the Finnish Government Publication No. 2021:68).

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Moilanen, T. (2017). State of civil-­service ethics in Finland: A survey of the ethical values and principles of central government employees (Ministry of Finance Publication No. 30:2017). Nousiainen, J. (2001). From semi-presidentialism to parliamentary government: Political and constitutional developments in Finland. Scandinavian Political Studies, 24(2), 95–109. Office of the President of the Republic of Finland. (2022). https://www.presidentti.fi/en/ Paine, L.  S. (1994). Managing for organizational integrity. Harvard Business Review, 72(2), 106–117. Paloheimo, H. (2003). The rising power of the prime minister in Finland. Scandinavian Political Studies, 26(3), 219–243. Parliament of Finland. (2022). Parliament at work. https://www.eduskunta.fi/ EN/naineduskuntatoimii/eduskunnan_tehtavat/Pages/default.aspx Parliamentary Ombudsman of Finland. (n.d.). https://www.oikeusasiamies.fi/en/eoa Peiponen, M. (2007). Arvot virkamiehen arjessa [Values in the everyday work of the civil servant]. Ministry of Finance. Tutkimukset ja selvitykset, 4, 2007. Pekonen, K. (2011). Puhe eduskunnassa [Speech in Parliament]. Vastapaino. Raunio, T. (2004). The changing Finnish democracy: Stronger parliamentary accountability, coalescing political parties and weaker external constraints. Scandinavian Political Studies, 27, 133–152. https://doi. org/10.1111/j.1467-­9477.2004.00101.x Raunio, T. (2005). Finland: One hundred years of quietude. In M. Gallagher & P.  Mitchell (Eds.), The politics of electoral systems (pp.  471–493). Oxford University Press. Raunio, T. (2010). Kenen pitäisi johtaa ulkopolitiikkaa [Who should lead the foreign policy]. In M. Wiberg (Ed.), Perustuslakihaasteet (pp. 33–59). Edita. Raunio, T. (2021). Committees in the Finnish Eduskunta: Cross-party cooperation and legislative scrutiny behind closed doors. In S.  T. Siefken & H.  Rommetvedt (Eds.), Parliamentary committees in the policy process (pp. 79–97). Routledge. Raunio, T., & Wiberg, M. (2014). Johdanto: Eduskunta Suomen Poliittisessa Järjestelmässä [Parliament in the Finnish political system]. In T.  Raunio & M. Wiberg (Eds.), Eduskunta: Kansanvaltaa puolueiden ja hallituksen ehdoilla (pp. 7–38). Gaudeamus. Tiihonen, S. (2007). Ruhtinaan kesyttäminen eli tahto ministeriön johtamiseen [Domestication the Prince aka will to lead the Ministry]. Hallinnon tutkimus, 26(1), 3–21. Tiihonen, S. (2016). Kohti yhteistä valtioneuvostoa? [Toward unified Government]. Hallinnon Tutkimus, 35(3), 244–252.

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Tiihonen S., & Ylikangas H. (1992). Virka valta kulttuuri. Suomalaisen hallintokulttuurin kehitys [The Development of Finnish Administrative culture]. VAPK-kustannus. Tuori, K. (2005). Vallanjako: vaiettu oppi [Separation of powers. Silenced lessons]. Lakimies, 103(7–8), 1021–1049. Valtioneuvosto. (2019). Project on developing strategic leadership instruments in government: Recommendations (Finnish Government Publication No. 2019:20). Valtioneuvosto. (2022a). Hallituskausien pituudet [The lenght of Government terms]. https://valtioneuvosto.fi/tietoa/historiaa/hallitukset-­ja-­ministerit/ hallituskausien-­pituudet Valtioneuvosto. (2022b). Hallitusohjelmat vuodesta 2017 [Government programmes since 2017]. https://valtioneuvosto.fi/tietoa/historiaa/ hallitusohjelmat Valtioneuvosto. (2022c). Hallituksen toimintasuunnitelma [Government action plan]. https://valtioneuvosto.fi/marinin-­hallitus/hallitusohjelman-­seuranta/ toimintasuunnitelma Valtioneuvosto. (2022d). Valtioneuvoston termit [Concepts of Government]. https://valtioneuvosto.fi/tietoa/valtioneuvoston-­termit#hallitusohjelma Valtioneuvoston kanslia. (2011). Hallituspolitiikan johtaminen 2010-luvulla [The management of Government in the 2010’s]. (Prime Minister’s Office Publication No. 7:2011). Venho, T. (2014). Eduskuntaryhmät ja puoluerahoituksen julkisuus [Parliamentary groups and publicness of the party financing]. In T.  Raunio & M.  Wiberg (Eds.), Eduskunta: Kansanvaltaa puolueiden ja hallituksen ehdoilla (pp. 109–118). Gaudeamus. Virtanen, P., Uusikylä, P., Jalava, J., Tiihonen, S., Laitinen, L., & Noro, K. (2016). Valtioneuvoston yhtenäisyys – kansainvälinen vertaileva tutkimus [The unity of government. A Comparative study]. Valtioneuvoston selvitys ja tutkimustoiminnan julkaisusarja, 49, 2016. Wiberg, M. (2014). Puolueryhmät eduskunnassa [Parliamentary groups in parliament]. In T.  Raunio & M.  Wiberg (Eds.), Eduskunta: Kansanvaltaa puolueiden ja hallituksen ehdoilla (pp. 163–183). Gaudeamus.

CHAPTER 4

The Structures of the Finnish Public Administration Elias Pekkola, Jan-Erik Johanson, Emmi-Niina Kujala, and Mikko Mykkänen

Introduction This chapter discusses the structures of the Finnish public administration. It concentrates mainly on the level of state administration. However, other administrative levels are also briefly described to provide an overall picture for the reader. The chapter is structured as follows. First, we will discuss state administration. We start the discussion by presenting the essential agencies, namely, ministries. Then, we will briefly discuss the role of other state agencies. After that, we will turn to the state regional administration. Second, we will briefly discuss the self-governing local and regional administrations. Until recently, the Finnish politico-administrative system has been represented by two-tier government structure. Its main components have been a strong central government and an autonomous municipal level

E. Pekkola (*) • J.-E. Johanson • E.-N. Kujala • M. Mykkänen Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_4

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(Sjöblom, 2011). For decades, the government has been trying to implement a reform of welfare and social services and simultaneously increase the population base for public services. However, it has been difficult because it would not have been ideal for strong ministries, the top-­down administrative culture and particularly robust municipal autonomy. In 2023, the most significant reform of the administrative structure since independence took place. It transformed the Finnish governmental structure into a three-tier system by establishing 21 wellbeing services counties (WSCs) (Sjöblom, 2020). We will concentrate on public agencies, and consequently, the discussion on private and third-sector collaboration is limited. We will conclude the chapter by summarising the current structure of public administration and services in Finland.

State Administration The state administration consists of central, regional and local state administrations. The central state administration is usually referred to as the central government. It includes ministries together with the national government and public bodies, such as agencies that are subordinate to them. The regional state administration authorities include 6 Regional State Administrative Agencies and 15 Centres for Economic Development, Transport and the Environment. The local state administration authorities consist of 11 police departments and 15 employment and economic development offices that are currently organised on a regional basis (Police) (29.4.2022/311) or are intended to be organised (employment and economic development) by the municipalities in 2024. Overall, the number of public agencies has been decreasing, which denotes that both their size and the number of duties undertaken by a single agency have been increasing. The public agencies within Finnish central government can be defined according to a taxonomy based on finances and accounting, performance management and employer status. The implication of employing different taxonomies is that the number of agencies cannot be expressed exactly. First, accounting offices are established by the Ministry of Finance for the implementation of the budget, accounting and cash management. Second, performance-managed agencies are entities that are able to undertake performance contracts with their supervising ministries. These agencies are part of the accounting offices, and they are not strictly stipulated in legal terms. Third, employer agencies represent entities that are used for the

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purposes of human resource management and participation in collective labour market agreements, but all employer agencies are not independent administrative entities (Ministry of Finance, 2016). The state administration was divided into 14 branches of government in 2022. Each ministry (12) works in its own branch. In addition, the parliament and the office of the president form their own branch. The branches of government can be divided into 64 accounting offices, 104 performance management units and 184 employer offices. Overall, there were some 78,000 employees in the state administration in 2021, comprising 11% of public employees. Around 30,000 current employees are working in (internal and external) security-related organisations. The number of state employees has been decreasing. Universities were detached from the state budget structure in 2010, reducing the number of state employees by 28,000. Additionally, the overall tendency regarding state administration staffing has been for numbers to decrease, but this has recently stabilised (Fig. 4.1).

National level Elections

President

Elections

Parliament

Laws, state budget, and government policies

Government

Ministries and central agencies

Regional level

Elections Elections

Citizens

Elections

Wellbeing service The regional State’s regional Inter-municipal counties (excl. government of level authorities cooperation Helsinki) Åland

Local governments

Local level

Fig. 4.1  Simplified diagram of the current governmental structures in Finland (adapted from Anttiroiko & Valkama, 2017, p. 158)

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Central Administration Independent Ministries or an Administration of the Prime Minister The ministerial structure of the government has remained largely intact since gaining independence. The continuity in the structure of ministries is confirmed by the fact that there have been very few structural changes during independence. The establishment of the Ministry of the Environment in 1983 and the amalgamation of the Ministries of Industry and Trade and the Ministry of Employment into the Ministry of Employment and the Economy in 2007 signify the most important developments (Virtanen et al., 2016). The ministerial structure in 2022 can be seen in Table 4.1. Some of the structural features of central government originated from Russian rule (1809–1917) and the prior attachment to Swedish rule that resulted in a combination of the political command of ministries (Russian origin) with the existence of strong central agencies governed by civil servants (Swedish origin). One of the key duties of the central agencies was to supervise the finances and management of local government. Of course, the duality of structure complicated government decision-making and created tensions between politicians and agencies (Temmes, 1987). The dismantling of central agencies took place during the government reforms in the 1990s. Two main developments, in particular, were instrumental in the demise of the central agencies. First, the increased financial and operative freedom of municipalities decreased the need for detailed supervision. Second, many of the market-emulating reforms impacted the duties of the central agencies. Consequently, some of the central agencies faced privatisation, some of their duties were transferred to ministries and some of them were demoted to advisory positions to assist government decision-making (Pollitt & Summa, 1997). As a result, the ministries gained a more prominent position in overseeing their policy areas. New Role of the Prime Minister’s Office As discussed in a previous chapter, the role of the prime minister has gained in importance, and he/she has become the de facto head of state. This has further emphasised the role of the Prime Minister’s Office as a ministry and also the idea that, administratively, the Prime Minister’s Office would co-ordinate other ministries, thus forming a uniform government.

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Table 4.1  Ministries, employees in the branch of government, policy areas and selected (example) offices in Finland. Source: Compiled by authors from public sources Ministry

Employees in the branch of government (2019); [in the Ministry]

Main policy areas

Selected state employer offices under the auspices of the ministry

Ministry of the Interior

15,454[222]

Police departments, Finnish Border Guard, Finnish Immigration Service

Ministry of Defence Ministry of Finance

12,961[132]

Policing, rescue services and emergency response, border management, migration Defence

12,732[403]

Ministry of Justice

9192[230]

Ministry of Economic Affairs and Employment

8082[417]

National economics, budget, tax, governance policy, local and regional government, finance markets, ICT, state employer

The Finnish Defence Forces Regional Administrative Offices, Finnish Tax Administration, State Treasury, Customs, Statistics Finland, Digital and Population Data Services Agency, Government ICT Centre, Government Shared Services Centre for Finance and HR Courts, National Enforcement Authority, Prison and Probation Service of Finland

Rule of law and legal protection, development of law drafting, democracy and elections, crime and punishment, fundamental rights, daily life (consumer, family, community law) Economic affairs, Centres for Economic growth and innovation, Development, Transport employment, energy and the Environment, Business Finland, Energy Agency, Finnish Competition and Customer Authority, Finnish Safety and Chemicals Agency, Finnish Patent and Registration Office (continued)

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Table 4.1 (continued) Ministry

Employees in the branch of government (2019); [in the Ministry]

Main policy areas

Selected state employer offices under the auspices of the ministry

Ministry of Agriculture and Forestry

4150[256]

Food, agriculture, natural resources

Ministry of Social Affairs and Health

3966[466]

Healthcare, social welfare, insurance and social security, gender

Ministry of Education and Culture

2619[246]

Education, science, sport, culture and art

Ministry of Transport and Communications

2253[187]

Transport and communication

Ministry for Foreign Affairs

1458[832]

Natural Resources Institute Finland, Finnish Food Authority, National Land Survey Finland Radiation and Nuclear Safety Authority, The Finnish Institute for Health and Welfare, The National Supervisory Authority for Welfare and Health, Finnish Medicines Agency Academy of Finland, Board of Education, National Archives, The Finnish Heritage Agency Finnish Transportation and Communication Agency, Finnish Transport Infrastructure Agency, Finnish Meteorological Institute Embassies

Ministry of the Environment

940[268]

Prime Minister’s Office

718[591]

Foreign and security policy, development policy, foreign trade, country image Housing, land use and Finnish Environment built environment, Institute natural environment and conservation, environmental protection Government ownership steering, co-ordination of EU policy, co-ordination of cross-ministerial policy, centralised services

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The operation of and changes in the Swedish government have been carefully observed in Finland due to a shared origin and similarities in operational challenges. All ministries were merged into a single agency in Sweden in 1997. The purpose of the reform was to increase government coherence and reduce inter-departmental segregation. The Finnish Parliamentary Committee (VM 7/2015) scrutinising the role of the cabinet did not see the Swedish unified cabinet model or the increase in the powers of the prime minister as suitable for domestic purposes due to differences in the political environment (Tiihonen, 2021), nor would it be seen as solving the problems of fragmentation and the lack of strategic management capacity. Regardless of the development towards a ‘holistic government’, the main role of the Prime Minister’s Office is to work as the prime minister’s secretariat and assist the prime minister in leading the government (Savolainen, 2011). The tasks of the office include co-ordinating Finland’s EU policy, the state’s ownership policy and the corporate governance of state-owned companies within its guidance. Based on Finnish parliamentarianism, one of the most important tasks of the Prime Minister’s Office is supervising the implementation of the government programme. The monitoring process aims to ensure the coherence of government policy. The Strategy Unit of the Prime Minister’s Office leads the monitoring process. Ministries are responsible for providing information to the Prime Minister’s Office in their respective areas. Although the monitoring of the implementation of the government programme has been strengthened, the prime minister cannot intervene in matters that are within the legally mandated authority of the ministers (Virtanen et al., 2016). In addition, the Ministry of Finance continues to be responsible for the development of administrative policy and management reforms in Finland. Ministerial Steering and Co-ordination The main instruments of guidance and control for government are legislation, budgetary and performance management, and powers of appointment. The government appoints the senior management of public agencies. Each ministry controls and supervises the agencies within its remit. The performance management model is based on objectives set out in the government programme. The main instruments of performance management are the government’s annual budget and performance agreements between the ministries and public agencies. In the multi-annual

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performance agreements between the ministries and public agencies, they agree on the performance targets based on the government programme and on agency-specific targets for the budget year and the resources required for their implementation. The agencies report on the achievement of their performance targets in their annual reports and ministries report on their performance in the government’s annual report (Kettunen et al., 2016). Frame budgeting adopted in the 1990s defines the ceiling of the expenses for the ministries over the four-year government cycle and it is updated annually. In practice, the government prepares an annual fiscal plan for the next four years, which sets out the targets for general government finances and defines the tools for achieving them. In addition to central government finances, the plan covers other areas of general government, such as local government finances and social security funds. Central government spending limits are part of the fiscal plan. The spending limits provide a link between the annual budget planning and the multi-annual fiscal planning (National Audit Office of Finland, 2022). Frame budgeting and spending limits reduce the need for the detailed supervision of finances within ministries. The budget frames, together with key reform efforts and legislative changes, are incorporated in the government programme. Frame budgeting is an efficient tool to control costs in multi-party governments, but it has also become an important instrument in relation to complying with EU regulations on the level of public deficit and debt. During the Covid-19 pandemic, the government detached from its spending limits. The horizontal co-ordination between ministries is not well developed and there are few guiding rules to orient the co-operation between ministries. Basically, inter-ministerial co-operation is built on two basic mechanisms. On the one hand, the ministries co-operate with each other, acting as independent entities. On the other hand, the ministries work together as part of the government and the central government. According to the legislation, the ministries co-operate as necessary and, as a general rule, the ministry under whose authority it falls is responsible for organising such co-operation. In the event of a disagreement or uncertainty as to which ministry is concerned, the matter is settled by the plenary of the government following a proposal from the prime minister (Government Act 175/2003, § 10). In addition, the Conference of the Permanent Secretaries serves as horizontal support to the management of the government and the central administration (Stenvall et al., 2022).

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The Prime Minister’s Office is responsible for monitoring the progress of the implementation of the government programme, but this duty is not well co-ordinated in terms of the supervision of finances, performance management and the budgetary process orchestrated by the Ministry of Finance. Furthermore, performance management and budgeting are taken care of by different departments within the Ministry of Finance, which underlines the lack of linkage between these functions (Salminen et al., 2021). The Ministry of Finance has acquired the position of a superministry, not unlike in many other advanced industrialised countries. Not only is it in charge of the preparation of the government annual budget principles of performance management and financial forecasting, but it also supervises the allocation of grants to local government, oversees the operation of state regional government units and co-ordinates the preparation of the principles of reform for the governance policy. Tiihonen (2012) sees the position of the Ministry of Finance as an evolutionary process from the financial crisis management needed to survive wars and financial instability up to the 1960s to its role as the guardian of the coffers of the government and the allocator of funding to social programmes in times of expanding public services.

State Agencies Most of the public services, with the exception of the security services, are provided by municipalities and WSCs. Thus, the role of the ministries is mostly planning, steering and legislative in nature. Directly under the auspices of ministries, there are some central agencies (see Table  4.1) that have supervisory, steering, research and development and/or service provision functions. The status of these agencies varies from semi-­independent funding organisations (e.g. the Academy of Finland) to implementing agencies providing public services (e.g. the Prison and Probation Service of Finland). The number of state agencies has been diminishing. The number of agencies has decreased because of mergers of regional agencies into national agencies and mergers of different functional agencies into multi-­ purpose agencies.

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Shared Service Centres Governmental services in the fields of ICT, HR and finance are organised through two Governmental Shared Service Centres, which provide their services throughout different administrative branches and levels. The first of these is the Governmental ICT Centre Valtori, which, in addition to ICT services, provides information and data communications technology for its customers. The second is the Shared Service Centre for Finance and HR Palkeet, which provides support and expert services in the fields of finance and HR.

The Regional State Administration The regional administration in Finland is twofold, as it includes the regional-level government of the municipalities (see Chap. 5), that is, inter-municipal co-operation, and the regional state administration. The regional state administration includes the authorities through which the state ministries and central agencies operate at a regional level. These authorities are the Regional State Administrative Agency (in Finnish, Aluehallintovirasto, in short AVI) and the Centre for Economic Development, Transport and the Environment (Elinkeino-, liikenne- ja ympäristökeskus, in short ELY-keskus). The duties of these authorities can be characterised as multi-sectoral, as they intersect the sphere of responsibility of various ministries (see Figs. 4.1 and 4.2). Additionally, the region of Åland, an autonomous part of Finland, has its own authority, the State Department of Åland (Statens ämbetsverk på Åland), which provides answers for the regional state administration as a whole on the islands (Anttiroiko & Valkama, 2017; Ministry of Finance, 2022; Nyholm et al., 2016). Historically, the regional state administration in Finland has been organised through provinces (in Finnish, lääni, in Swedish, län. The etymology of the word comes from a German term meaning to ‘directly loan’, referring to the feudal system). This system of administration was established in 1634 when Finland was still the eastern part of Sweden, and hence, it was governed from Stockholm. The provincial system continued as such, with incremental changes all the way up until the administrative reform of 2009, when the provinces of Finland were axed and the Regional State Administrative Agency and the Centre for Economic Development, Transport and the Environment took over their responsibilities. In

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addition to the provinces, the new organisations were also annexed with other regional offices, for example, road districts, environmental centres and employment centres (Koskinen & Einonen, 2014; Nyholm et  al., 2016; Parkkinen et al., 2019). The Regional State Administrative Agency is tasked to carry out regional implementation, steering and enforcing of the relevant legislation. At an operative level, this mainly means supervision, carrying out permit and subsidy processes, and co-ordinating and supporting contingency planning. In continental Finland, the organisation is divided into six units (Ministry of Finance, 2022). The Regional State Administrative Agency is obliged by law to carry out tasks in the following fields: . Social welfare and healthcare 1 2. Environmental health services 3. Educational, child day-care, library, physical education and youth services 4. Promotion and fulfilment of basic rights 5. Environmental protection and water legislation permits 6. Fire and rescue services 7. Development and supervision of occupational health and safety 8. Consumer and competition administration However, the tasks are not limited to these ones and may include other designated tasks, for example, the assessment of the accessibility of basic services (Ministry of Finance, 2022). The steering system between the relevant ministries and the Regional State Administrative Agency can be seen in Fig. 4.2. The Centre for Economic Development, Transport and the Environment is primarily a development-oriented organisation, but it also has a dimension of implementation within its mission. On an operative level, this mainly means providing funding, carrying out permit and subsidy processes, providing expert services and information services, and supervising and contingency planning. As the name of the centre suggests, there are three different working dimensions within the organisation: (1) business and industry, the labour force, competence and skills, and cultural activities; (2) transport and infrastructure; and (3) the environment and natural resources. In continental Finland, the organisation is divided into 15 units. However, some of the units may have been assigned to work

Fig. 4.2  The Regional State Administrative Agency steering structure (adapted from Nyholm et al., 2016, p. 153)

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with only some of the three aforementioned dimensions. This means that the units that are named after their respective regional area of responsibility may have to work, to some extent, on a larger geographical scale if they have been designated with any special tasks (Ministry of Finance, 2022; Nyholm et al., 2016). In addition to its regional units, the Centre for Economic Development, Transport and the Environment has its own unit for development and administration purposes (in Finnish, KEHA-keskus). This unit is a part of the regional state administration, although it has a national mandate. The unit provides services to the regional units of the organisation within the administrative sphere, for example, finances, human resources and information services. Additionally, it also provides information services to the Regional State Administrative Agency (Ministry of Finance, 2022).

Other Public Administration Not all public administrations are under direct government control. The indirect public administration consists of independent bodies governed by public law (such as the Social Insurance Institution of Finland, the Bank of Finland, the Finnish Institute of Occupational Health, the Finnish Forest Centre and universities) and corporations, institutions, foundations and private individuals (such as fishing and animal welfare supervisors) performing a public function in accordance with provisions in law or with provisions or rules issued on its basis. The public administration also includes local government (municipalities), WSCs and church administrations, which are independent from the central government (Ministry of Finance, 2022).

Local and Regional Self-Governance Local governments enjoy considerable independence in Finland, similar to other Nordic countries. Local government has been responsible for supplying the services of the modern welfare state (see for developments in Chap. 17) in the form of social care, healthcare and primary and secondary education. Local governments consist of some 425,000 employees. The highly decentralised service system has been fragmented and has stretched the resources of small municipalities (Sjöblom, 2011). The newly approved legislation in 2021 introduced counties to taking on the responsibility of organising social services and healthcare (and rescue

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services). The new counties’ wellbeing services are led by political councils elected in the spring of 2022 and they were fully operational at the beginning of 2023 (Finnish Institute for Health and Welfare, 2021; Saltman & Teperi, 2016). The reform is one of the biggest administrative changes in Finnish history (for legal basis, see Chap. 9). This means the introduction of a new regional level of government in an inherently unitary state. It reduces local government budgets by two-thirds and strengthens the role of the central government, as counties, not having rights for taxation, are dependent upon central government grants for organising their services. Local and regional governance are discussed in more depth in Chaps. 5 and 6. Wellbeing Services Counties The largest reform of public administration and service production came into force at the beginning of 2023. The responsibility for organising health, social and emergency services was transferred from municipalities to WSCs. WSCs are newly established, regional democratic self-governing entities. In Finland, there are 21 WSCs and, in addition, the city of Helsinki is responsible for organising health, social and rescue services within its own area. The highest decision-making authority of the WSC is the elected WSC Council. The election is based on a public vote that will be held every four years in conjunction with municipal elections. More than 200,000 municipal employees (approximately 50% of the workforce in the municipal sector) were transferred to be employees of WSCs. At the beginning of 2023, funding for WSCs was based on government funding and service fees. Additionally, at the time of writing, it is too early to say more about the internal governance of the WSCs (see Chap. 15). Municipalities The number of municipalities has been decreasing over the years through mergers. Currently (2022), Finland has 309 municipalities that are regulated by a universal municipality act, regardless of their size. All municipalities have the right to levy taxes. Municipalities can call themselves a municipality (kunta) or a city (kaupunki). On average, the municipalities are small, as the median number of inhabitants was 5967 in 2021. The

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population of municipalities varies from less than a thousand to more than 600,000 in Helsinki (Kuntaliitto, 2023a). The highest decision-making authority in a municipality is the Municipal Council, which is selected for a four-year term. Each municipality forms its own single electoral area, and the elections are based on a partisan list. Municipal elections form a counterbalance for the national political composition of parliament. Traditionally, the Centre Party has been the strongest party in the (small rural) majority of Finnish municipalities. The highest officer in the Finnish municipality is typically a chief executive, who is a civil servant selected by the council for a permanent position or fixed term. However, since 2006, municipalities have had the possibility of selecting a mayor as their most senior person. The mayor is a political representative selected for the term of the council. Both the mayor and the chief executive officer work under a local executive board selected by the council (Kuntaliitto, 2023b). The municipalities have regulatory duties. After the 2023 reform, the main statutory duties of municipalities were: • Education and early childhood education and care • Cultural, youth, library and sports services • Urban planning and land use • Water and waste management • Environmental services (Ministry of Finance, 2023) In addition, municipalities may provide other services. Often, they are active in promoting local business and employment, tourism, housing and the economy at large. Joint Municipalities and Regional Councils Prior to the reform in 2023, a large part of social and healthcare services was provided by a joint municipalities’ official called a joint municipal board. The joint municipality board is a form of permanent collaboration between more than one municipality in some field of operation. A joint municipal board is set up under an agreement (charter) between the local authorities concerned that has been approved by their councils. Joint municipal boards are independent legal persons and are governed by the legislation on local government. The participating municipalities are responsible for the finances of the joint municipal board (Tilastokeskus,

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2021). After the reform of 2023, many municipalities still organised, for instance, their vocational education as part of a joint municipality. Regional councils, or simply regions, are statutory joint municipalities. Every municipality must be a member of a region. In Finland, there are 18 regions and the autonomous region of Åland. The regions are governed by a regional assembly (members are selected from among the members of municipal councils) and regional boards. Regions have regional offices that employ 650 persons in total. The statutory functions of regional councils are regional development and regional land-use planning. In addition, the regional councils are mainly responsible for the co-­ordination of EU structural funds in Finland (Kuntaliitto, 2023b).

Conclusion: Hollowing Out the State, Strengthening Regions, Weakening Local Democracy? Finnish public administration can be approached from several perspectives. Let us first summarise the overall development of the state administration. At the time of writing, the strong regional presence of the state administration is part of history, and current regional offices are more or less overseeing agencies that also have centralised national functions. The local state administration has all but disappeared and remains only as a legal remnant. The central administration is organised under the ministries, and the number of public agencies has decreased due to the amalgamation of regional agencies into national ones and mergers of function-specific agencies into multi-purpose and thematic agencies. Overall, the role of central government as a service provider and public employer has decreased. If we analyse the change in the public sector from the perspective of service provision, 2023 is a clear turning point and the end of an era of municipal dominance in public service provision. Post-2023, the division between public service provision and acquisition is quite clear: The state provides security services (police, defence, border control, customs) and services related to courts and the administration of justice. Social, healthcare and emergency services are provided by WSCs. Municipalities (and their joint authorities) are responsible for (primary and secondary) educational services, services related to land use and infrastructure, and other services connected to daily life. Service-related employment and economic

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development are still under reform, and the service might be transferred to the municipalities, which will then, in practice, end the local state administration. Tertiary education (universities and universities of applied sciences) is funded and steered by the Ministry of Education and Culture but provided for by institutions outside of the state budgetary structure. From the perspective of democracy, there are now three different layers of representative democracy: the national parliament (selected from voting districts), the municipal democracy and the regional democracy in wellbeing service districts. In addition, there are indirect representative structures of regions and joint municipalities. WSCs are not connected to municipal democracy or participation; nevertheless, they have their own participation structures mirroring those in municipalities. It remains to be seen what it means to be a ‘citizen’ of a WSC and how this citizenship will be related to an identity and the role of democracy for the citizenship within a municipality and nationally. The government is funding the WSCs, and thus the municipal economy is decreasing substantially. The relationship between WSCs and the municipalities is also unclear because WSCs do not produce services for the municipalities but provide them directly to the citizens. However, the municipalities can sell some services to WSCs; for instance, in some regions, WSCs are customers of municipal-owned occupational health companies. It remains to be seen whether the new structure will make regional and local democracy stronger or whether it will increase the state’s role in direct steering. The city of Helsinki, as the only exception to the rule, now has a different status than all the other municipalities and it also remains to be seen what implications this has for the capital.

References Anttiroiko, A. V., & Valkama, P. (2017). The role of localism in the development of regional structures in post-war Finland. Public Policy and Administration, 32(2), 152–172. Finnish Institute for Health and Welfare. (2021). Health and social services reform. https://soteuudistus.fi/en/health-­and-­social-­services-­reform Government Act 175/2003. Laki valtioneuvostosta. https://finlex.fi/fi/laki/ ajantasa/2003/20030175 Kettunen, P., Sandberg, S., & Fredriksson, C. (2016). Eurooppalaiset hallintojärjestelmät vertailussa [Comparison of European administrative systems]. Helsinki. Prime Minister’s Office, 37, 2016.

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Koskinen, U., & Einonen, P. (2014). Hallinnon sankarilliset yksilöt ja kasvoton koneisto [The individual heroes and faceless machinery of public administration]. In P. Karonen & A. Räihä (Eds.), Kansallisten instituutioiden muotoutuminen: Suomalainen historiakuva Oma Maa -kirjasarjassa 1900–1960 (pp.  115–145). Suomalaisen Kirjallisuuden Seura. Historiallisia tutkimuksia, 267. Kuntaliitto. (2023a). Numbers of cities and municipalities and population data. https://www.kuntaliitto.fi/kuntaliitto/tietotuotteet-­j a-­p alvelut/ kaupunkien-­ja-­kuntien-­lukumaarat-­ja-­vaestotiedot Kuntaliitto. (2023b). Municipalities and Regions. https://www.localfinland.fi/ finnish-­municipalities-­and-­regions Ministry of Finance. (2016). Keskushallinnon uudistushankkeen esiselvitys [The preliminary report on the central administration reform project] (Ministry of Finance Publication No. 37:2016). Ministry of Finance. (2022). Valtion aluehallinnon virastorakenteen ja tehtävienjaon selvityshankkeen loppuraportti [Final report of the project studying the agency structure and division of duties in regional state administration] (Ministry of Finance Publication No. 2022:36). Ministry of Finance. (2023). The roles and responsibilities of munchipaliteis. https://vm.fi/kuntien-­tehtavat-­ja-­toiminta National Audit Office of Finland. (2022). Good governance. https://www.vtv.fi/ en/good-­governance-­articles/the-­general-­government-­fiscal-­plan-­provides-­a-­ basis-­for-­long-­term-­decisions-­general-­government-­finances/ Nyholm, I., Stenvall, J., Airaksinen, J., Pekkola, E., Haveri, A., af Ursin, K., & Tiihonen, S. (2016). Julkinen hallinto Suomessa. [Public administration in Finland)] Art House. Parkkinen, J., Koivisto, J., & Kolehmainen J. (2019). Katse kohti tulevaa - Alue- ja paikallishallinnon muotoutumisen tulevaisuusskenaariot. KAITSE- ja KAITSE-­ EP-­hankepari, Väliraportti. [Avenues for the future – future scenarious for construction of regional and local administration. KAITSE- and KAITSE-EP-project pair, mid-term report]. Tampereen yliopisto. Pollitt, C., & Summa, H. (1997). Trajectories of reform: Public management change in four countries. Public Money and Management, 17(1), 7–18. Salminen, V., Halme, K., Järvelin, A-M., Kettinen, J., Uusikylä, P., Lintinen, U., Stenvall, J., Vakkuri, J., & Johanson, J.E. (2021). Valtionhallinnon tulosohjausmallin arviointi [Assessment of the performance management model]. Prime Minister’s Office. Saltman, R. B., & Teperi, J. (2016). Health reform in Finland: Current proposals and unresolved challenges. Health Economics, Policy and Law, 11(3), 303–319. Savolainen, R. (2011). Valtioneuvoston kanslia 200 vuotta: Kansliatoimituskunnasta pääministeriöksi. [Prime Minister’s office 200 years] Prime Minister’s Office.

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Sjöblom, S. (2011). Finland: The limits of the unitary decentralized model. In J. Loughlin, F. Hendriks, & A. Lidström (Eds.), The Oxford handbook of local and regional democracy in Europe (pp. 241–260). Oxford University Press. Sjöblom, S. (2020). Finnish regional governance structures in flux: Reform processes between European and domestic influences. Regional and Federal Studies, 30(2), 155–174. Stenvall, J., Leskelä, R. L., Rannisto, P. H., Tolkki, H., Cansel, A., Leponiemi, U., Johanson, JE, Pekkola, E. & Tupala, T. (2022). Koronajohtaminen Suomessa: Arvio covid-19-pandemian johtamisesta ja hallinnosta syksystä 2020 syksyyn 2021. [Management of the Covid-19 pandemic in Finland. Evaluation of the management of the Covid-19 pandemic from autumn 2020 to autumn 2021]. Prime Minister’s Office. Temmes, M. (1987). Hallintokoneiston autonomisuus. [Autonomy of Administration] Acta Universitatis Tamperensis Ser A vol 218. University of Tampere. Tiihonen, S. (2012) The Ministry of Finance: Two hundred years of state-building, Nation-Building and Crisis Management in Finland. Helsinki. Suomalaisen Kirjallisuuden Seura. Tiihonen, S. (2021). Pääministerin nousu kriisijohtajaksi. [Prime Minister as a New Crises-Leader]. Politiikka, 63(1), 82–93. Tilastokeskus. (2021). Munichipal association. https://www.stat.fi/meta/kas/ kuntayhtyma.html Virtanen, P., Uusikylä, P., Jalava, J., Tiihonen, S., Laitinen, L., & Noro, K. (2016). Valtioneuvoston yhtenäisyys – kansainvälinen vertaileva tutkimus. [The Unity of Government – An International Comparative Study] Prime Minister’s Office.

CHAPTER 5

City-Regionalisation, Local Democracy and Civic Participation Jouni Häkli, Kirsi Pauliina Kallio, and Olli Ruokolainen

Introduction City regions have grown into important sites of economic development and policy initiatives. Their overall importance in shaping and framing societies has grown remarkably since the 1970s, and increasingly so over the past three decades (Davoudi, 2003; Harrison, 2012; Jonas & Moisio, 2016; Parr, 2005; Rodríguez-Pose, 2008). As evolving new spaces for governing, policymaking and planning, city regions in Finland and other Nordic countries grow in between, within and beyond the territorial organisation of the state, through relational connections and disruptions, following largely economic logics but also involving sociocultural elements and political steering and often linking with aims towards

J. Häkli (*) • K. P. Kallio Tampere University, Tampere, Finland e-mail: [email protected] O. Ruokolainen Center for Cultural Policy Research, Helsinki, Finland © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_5

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sustainable urban development (Davoudi et  al., 2021; Haughton & Allmendinger, 2015; Metzger, 2013). A significant element in the rise of the city region is urban and land-use planning, where the focus has gradually shifted from individual cities and municipalities to agglomerate city regions. While the power relations between municipalities, the state and city regions involve notable geographical variation, this shift has generated some fundamental effects on democratic societies—the role of citizens in urban development being one of them (Soja, 2015; Tomàs, 2015). As they are institutionally malleable (see Chap. 9), city regions can be adapted to various spatial shapes and scopes in response to local drivers of city-regionalisation, such as traffic infrastructure development. While this makes them strategically ‘agile’ and capable of accommodating various informal, ad hoc and contract-­ based forms of governing and planning, important questions have arisen about democratic accountability (Kübler, 2018; Lidström & Schaap, 2018; Mattila & Heinilä, 2022). In the Nordic countries, Finland included, city regions have gained a foothold as contexts of governance that are actively promoted as part of state–governmental strategies to foster economic development and municipal co-operation within urban agglomerations. Complementing the traditional state-based public space, organised as a territorially layered system of municipalities, regions and the state, city regions are weakly institutionalised and thus lack both legislative guarantees and administrative routines and practices for the provision of participatory avenues and possibilities (Häkli et al., 2020). This chapter discusses city-regionalisation as a challenge for local democracy and participation in Finland and other Nordic countries. With an empirical focus on the case of Tampere’s city-regional tramway (aka light rail transit or LRT) project (see Chap. 17 for further developments), we discuss how citizen participation can be understood in a relational city-­ regional framework and why traditional participatory means are prone to failing to invite and involve people in city-regional planning processes. We begin by describing the context of city-regionalisation in Finland and then move on to discuss Tampere tramway as a traffic infrastructure project with a city-regional scope. Next, we consider the challenges that this project presents to civic participation and local democracy, paying particular attention to how strategic city-regional goals and decisions risk becoming

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detached from citizens’ democratic control. We conclude by probing into the challenge of redressing the democratic deficit of city-regionalisation in the context of weakly institutionalised city regions.

Civic Participation and City-Regionalisation in Finland The city region is a concept, the meaning of which varies depending on academic and practical contexts. According to Rodríguez-Pose (2008), a common way to identify a city region is through the core city being connected to its surroundings with functional ties, such as economic, housing market, travel-to-work and retail catchment factors. As continuous regionalisation processes with a changing shape and scope, city regions rarely match existing administrative boundaries (Metzger, 2013). However, in terms of concrete planning practices, they are commonly considered fixed areas (Davoudi, 2003; Healey, 2006), and research focusing on city regions can set out to compare them as measurable units (Lidström & Schaap, 2018). These interpretations reflect the popular use of the concept as referring to areal units consisting of specific municipalities and nested within a hierarchical scalar structure ‘above’ the city and ‘below’ the state. In contrast to this, Haughton and Allmendinger (2015, p.  860) propose that city regions are best understood ‘as bounded and porous, territorial and relational’, thus acknowledging the continuing relevance of territorial organisation but also paying attention to the processes and connectivities involved in regionalisation (Jonas & Moisio, 2016). Thus understood, city regions are not so much a new ‘layer’ in the state-based spatial system, but rather an emergent space of governance in between, within and beyond the territorial organisation of the state (Wu, 2016). When it comes to the democratic dimensions of city-regionalisation occurring in Nordic countries, it is pertinent to ask if civic participation can be included in city-regional planning. They are liberal democracies, with civil society in a central role in steering societal development. In Finland, citizens are entitled to participate in planning and decision-­ making that concerns them, either through representative or direct forms of participation, at all levels of government (Salminen, 2008). Citizen participation, hence, is a fundamental right that the members of political

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communities may practice and claim, if necessary (Bäcklund & Mäntysalo, 2010). The public provision for participatory possibilities is particularly strong in the case of planning for land use and major infrastructure projects. Rights to citizen participation are safeguarded by legal provisions, especially through the Finnish Land Use and Building Act (132/1999) that obligates municipalities to prepare for and organise possibilities for participation for all of those potentially affected by any particular local land-use planning process (Bäcklund et al., 2014). Individuals and groups can, therefore, express their views on planned changes in land use, housing and traffic that affect their living environments, and they are also entitled to civic participation in ways and forms that they find accessible and relevant, within the provisions of existing legislation (Nabatchi & Leighninger, 2015). In Finland and other Nordic countries, municipalities are particularly important providers for civic participation because they constitute a strong and relatively autonomous level of local government (with the right to levy taxes, for instance) (Giersig, 2008). As a Nordic welfare state with municipalities holding monopolies over local spatial planning, Finland is a relative newcomer to city-­regionalisation processes (Hytönen et al., 2016; Mattila & Heinilä, 2022). City-regional collaboration has increased in Finland only during the past two decades, mainly reflecting the need to co-ordinate land-use planning across municipalities or devise strategic planning on the supra-local scale. The state has increasingly conceived of the four largest city regions (surrounding the Helsinki metropolitan area, Tampere, Turku and Oulu) as major generators of growth and innovativeness, which, therefore, should be planned as supra-municipal functional regional entities (Luukkonen & Sirviö, 2019). The state’s city-regionalisation policies have been motivated by the fact that municipalities within a given city region have tended to find themselves competing for the same growth impulses and resources. Hence, it has been common for them to end up optimising land-use and planning goals from a municipal rather than a city-regional perspective. Simply put, the interests of an individual municipality have not easily aligned with the strategic goals set on the city-regional scale (Hytönen et al., 2016). Hence, to steer municipalities away from sub-optimising city-regional goals, the state has devised specific policies to encourage municipalities to engage in deeper and more strategic collaboration on the city-regional scale. Most of these initiatives align with international trends with development policies aimed at endogenous growth and neoliberal

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competitiveness (Davoudi & Brooks, 2021). In parallel, attention has begun to move away from nationally embedded regions to globally competitive city regions as the preferred scale of innovation and political-economic regulation. Scholars, such as Davoudi (2019) and Haughton and Allmendinger (2015), have depicted this transition in terms of new regionalism that leans on a particular imaginary of city regions as ‘engines’ of economic growth and the only competent and capable players in global competition for capital, innovativeness and growth (in the Finnish context, see Luukkonen & Sirviö, 2019). To improve the effectiveness of joint planning in city regions, the MAL agreement was introduced in 2011 as a tool to boost inter-municipal co-­ operation on land-use planning (M), housing (A) and transport (L) strategies. Since its launch, it has worked through a contractual arrangement between the state and municipalities by which the state agrees to part-fund major infrastructure projects, such as the Tampere tramway, but only if municipalities agree to create city-regional institutional frameworks and co-operation (Bäcklund et  al., 2018; Mäntysalo et  al., 2015; Mattila & Heinilä, 2022). Hence, with MAL agreements, the state has aimed to better co-ordinate municipalities’ strategic development from a city-regional land-use planning perspective. In this sense, they are non-statutory plans that document the goals and land-use outlines transgressing the borders of individual municipalities, through which the state seeks to achieve nationally set goals, such as the densification of the urban fabric or balanced social housing. The agreements aim to overcome individual municipalities’ sub-optimisation in their planning and development activities by committing municipalities to city-regional goals and projects. Importantly, the MAL agreements are predominantly expert-led forms of planning, with only an indirect connection to representative decision-making processes in the municipalities’ political bodies. Only the four largest city regions were first offered the opportunity to sign a MAL agreement, which paved the way to expanding the practice to other urban agglomerations in 2021 (Jyväskylä, Kuopio, Lahti). Of these, the Tampere city region is among the fastest growing, with an estimated population of 480,000  in 2040 (Tampereen kaupunkiseutu, 2014). By signing the MAL agreement, they secured funding for the construction of a city-regional tramway, which we now turn to as an example of the problems that this novel but weakly institutionalised and loosely regulated scale of governance has created for local democracy and citizen participation.

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City-Regionalisation in Action: The Case of the Tampere Tramway In many countries, Finland included, the institutionalisation of city regions remains weak. As progressing spaces of governance, policy and planning, city regions traverse and, to some extent, bypass the territorial organisation of the state, engaging with translocal and transnational networks through new kinds of connections. Directed mainly by economic logics, in connection with loose and non-transparent political steering, they adapt to changing spatial shapes and scopes in response to varying drivers of city-regionalisation. In our case, sustainable traffic infrastructure development can be identified as the most relevant driver. The somewhat elastic character of city regions makes them at once strategically agile—accommodating various informal, ad hoc and contract-based forms of governing and planning—and democratically vague. A case in point is the ongoing planning and construction of a tramway in Tampere, the largest inland city in Finland, with some 240,000 inhabitants in the core city and a further 157,000 inhabitants in the surrounding municipalities. Dubbed as the ‘Manchester of Finland’—referring to its previous role in Nordic industrialisation—Tampere is imagined as the engine of growth in the region, in the same way that Manchester assumes a pre-eminent position in the northwest of England (Haughton et  al., 2016). The city’s size and economic weight often manifests in its role in taking the lead in, and sometimes dominating, decision-making concerning the city region. The tramway is no exception. Its construction began in the core city of Tampere, even though the project was financially facilitated by the MAL contract between the state and the city region’s eight municipalities. Tampere city’s aspiration to build a tramway can be traced back to as far as the early 1900s; an urbanist idea revived in 2001 with a focus on the railroad network, ‘tramtrain’ (pikaratikka). In 2004, attention was turned to a modern tramway, and in 2007, the city carried out a comparative analysis of alternative public transport solutions. This was followed by an updated transport plan programme and the launch of the planning process for a light rail system in 2010 (Tampereen kaupunkiseutu, 2010). In December 2011, the final plan—at this stage—was approved by Tampere City Council (Tampereen kaupunki, 2011). However, the actual decision to build the tramway had not yet been made.

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In February 2013, the first MAL agreement was signed by eight Tampere city region municipalities, two government ministries, two state regional administrative offices and the Finnish Transport Agency. As part of this agreement, the construction of a city-regional tramway was proposed, of which 30% was to be funded by the national government (Tampereen kaupunkiseutu, 2013). Although the contract was between the state and the signatory municipalities, important decisions about the tramway have taken place in less formal and non-transparent arenas, of which the Tramway Alliance is the most influential. The Alliance was established in the summer of 2015 to carry out the planning and construction of the tramway. It is composed of a number of public and private sector actors, with the city of Tampere as the main client and three large commercial companies as the major service providers. The use of ‘public–private partnerships’ for the delivery of public services is widely seen as an indication of an emerging mode of governance (e.g. Goldstein & Mele, 2016; Haughton & McManus, 2012). Located in a corporate office building, the Alliance acts as the main negotiator and organiser of the tramway construction process. Importantly, apart from Tampere, none of the other signatory municipalities of the MAL agreement are represented in the Alliance. Their exclusion has been justified on the grounds that the first stages of the tramway construction are in Tampere. However, as we discuss below, plans for the second and third stages stretch beyond its territory, which raises critical questions about the composition of this key actor. In May 2016, the MAL agreement was updated, extending the signatories to a new ministry and confirming the state’s subsidy of 71 million euros (Tampereen kaupunkiseutu, 2017). On 7 November 2016, Tampere City Council made a decision on a majority vote to build a modern tramway system in two phases. The first phase would connect the city centre to the University Hospital area, as well as to the three Tampere University campuses in the centre, east and south of the city. The second phase would link these to an existing business area and to a new housing development in western Tampere (Raitiotieallianssi, 2017). As with many other railway-­ based urban development projects, both phases align with plans to concentrate new housing, retail and business development, and public services along tramway lines. In this regard, the project is promoted as a sound, sustainable urban development initiative justified on the basis of the need for carbon reduction, urban densification and improved mobility for a growing urban population (e.g. Tampereen kaupunkiseutu, 2014).

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The construction of the tramway, with a total estimated cost of 313 million euros, began in 2018 from the Tampere city centre towards the east and south (Raitiotieallianssi, 2017). In November 2018, Tampere City Council announced its plan for the westbound extension of the tram to be built immediately after the completion of the first phase, which was envisaged to be in 2021. In April 2019, the City Council announced another southbound extension of the tramway to include destinations in the three neighbouring municipalities of Pirkkala, Kangasala and Ylöjärvi (Tampereen kaupunki, 2019)—all signatories of the MAL agreement and involved in the Joint Authority of Tampere City Region (JATCR, Tampereen kaupunkiseudun kuntayhtymä), a co-operative arrangement with Tampere. The new extensions—all of which start from Tampere and move outwards—represent significant steps towards concrete city-regionalisation, with endorsement by the above-mentioned three municipalities, whereas other smaller and more remote municipalities of the Tampere city region are yet to be connected to the tramway planning scheme. Hence, what began as a Tampere city ‘tramtrain’ in 2001 became a city-regional development project when boosted by state funding linked to the MAL agreement. The project has pulled a few larger municipalities together through better and faster connections while leaving other areas (mostly rural municipalities) disconnected.

The Tramway Project as a Challenge to Local Democracy The Tampere tramway is an important step towards a more sustainable mode of transport in Finland. Yet, its construction makes visible certain gaps in democratic decision-making and citizen participation in a city-­ regional context, pertinent to many Nordic contexts. As municipalities in Finland are in charge of much of the local decision-making and the provision for citizen participation—included strongly in the formal landuse planning system—the transition of politico-administrative powers to the city-regional scale requires the removal of certain powers from them. Moreover, in the case of Tampere tramway, this upward rescaling has pulled some private actors (companies, consulting organisations) to centre stage at the cost of citizen participation and democratic steering (Hytönen & Ahlqvist, 2019). Three aspects are critical in understanding

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how this process has unfolded in the context of city-regionalisation in Tampere. First, the practices of contractual planning have rescaled decision-­making upward to largely unaccountable city-regional governance bodies and thereby away from the direct democratic control of locally elected municipalities and their residents (Beel et al., 2018). Decisions related to tramway planning and building are carried out by public–private partnerships, driven largely by sustainable growth and competitiveness goals, with little or no forms of representative or direct citizen participation (for city-regional citizen participation, see Häkli et al., 2020). This is evident, for instance, from decisions regarding the routeing of the tramway in the westbound areas of the project, where the route largely caters to undeveloped land and skirts existing built-up areas with a high population density (Koivuniemi, 2013). Citizens’ existing needs for sustainable transportation are clearly not at the heart of this development. The upward rescaling from municipal to city-regional governance is also consequential in terms of the public participation required by the Finnish Land Use and Building Act (132/1999) for major planning and infrastructure projects, such as the Tampere tramway and its related construction projects (Bäcklund et al., 2014). Whereas established procedures for public participation, with a clear system of rights and responsibilities, exist in municipal planning, these procedures are less evident in the planning machinery erected by weakly institutionalised city-regional governing institutions (Mattila & Heinilä, 2022). In this regard, the relationship between municipal and city-regional planning (see Chap. 17 on regional planning) is democratically unclear and potentially problematic (see also Bäcklund et al., 2018; Puustinen et al., 2017). Rescaling means that city-­ regional governance can set the agenda for municipal planning decisions without democratic scrutiny. In the case of the Tampere tramway, the opportunities to influence planning decisions have been reduced for citizens and increased for commercial service providers acting as significant players in the market-oriented and opaque functioning of the Tramway Alliance. Second, with the city of Tampere as the client of the Tramway Alliance, key steps in tramway planning and construction are being carried out under the control of Tampere, emphasising the power of the regional centre. For example, Tampere City Council oversaw the procurement of the preliminary planning (Tampereen kaupunki, 2011), held a central role in drafting the structural schemes for MAL agreements (Tampereen

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kaupunkiseutu, 2010, 2014, 2017) and acted as the driving force and leader in the general planning project group. While other municipalities of the city region participated in negotiating the structural schemes and MAL agreements, they have not had explicit roles in designing the general tramway plan, nor have they been included in the Alliance. At the early stages of this complicated inter-municipal process, it became clear that the premises of the project had been set and steered by the Tampere-led planning and building scheme. As a result, a number of fundamental decisions have been made by the city of Tampere alone, including not only the tramway routes but also many practical choices related to, for example, the realisation of the tracks, the supplier of the tramcars and the traffic operator. Such a fundamental reconfiguration of powers and responsibilities has occurred without wider public discussion and explicit democratic processes at various levels of governance. Third, as the tramway project has been Tampere-led and decision-­ making concerning its planning and implementation has centred on Tampere City Council, the provision for citizen participation has also been restricted to the residents of the core city only. In this regard, the city of Tampere has organised several participatory events and measures, such as workshops, ‘information afternoons’, questionnaires concerning detailed plans, ‘tramway cafes’, seminars and even a ‘tramway day’ where an actual tramcar was brought to the city square for citizens and stakeholders to explore (e.g. Tampereen kaupunki, 2018). These participatory practices gathered citizen feedback concerning the tramway routes in Tampere, backed by two open events where ‘municipal citizens’ had the opportunity to discuss matters related to the tramway system and its wider impacts with planning experts. While these participatory procedures seem to have enabled relatively open participation forums to (at least some) citizens in Tampere, it is noteworthy that, available to the citizens of Tampere only, they typically approached the tramway from a Tampere-centred perspective. While the citizens in the other municipalities of the Tampere city region may eventually have the opportunity to participate in the land-use planning stage of the tramway through municipal representative bodies, and perhaps also by means of direct participation, such opportunities may come only after the key strategic and practical decisions have been made in and by the city of Tampere (Häkli et al., 2020). This underlines the fact that the majority of citizens living in the region have no say in the state-led MAL process, which boosts and concretises city-regionalisation in the Tampere

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region. Even the elected council members of the eight municipalities were not consulted on the operative decisions regarding the tramway system. In terms of democratic legitimacy and accountability, this means that in deciding on the details of the tramway in individual jurisdictions, municipalities will find their hands have been tied by previously forged decisions, contracts and plans made prior to consultations with the public (see also Buser, 2014; Moulaert et al., 2007).

Conclusion: Whither City-Regional Participation? In Finland, citizen participation is firmly embedded in the formal land-use planning system regulated by the Finnish Land Use and Building Act (1999), which mandates participation as part of the planning procedures. The planning system has three tiers: the national land-use guidelines provide a general planning frame set by the Finnish government, the guidelines are concretised in regional land-use plans approved by regional councils and the most detailed planning takes the form of local master and detailed plans prepared and approved by municipalities (Ministry of the Environment, 2018). With the municipalities’ strong self-governance and planning monopoly over their jurisdictions, the local plans have a major role in shaping the actual urban environment (e.g. Bäcklund & Mäntysalo, 2010; Hytönen, 2016; Leino & Laine, 2011). However, alongside the formal planning system, new forms of strategically oriented and more informal and contract-based forms of land-use planning have emerged, especially in regions surrounding important urban centres (Bäcklund et  al., 2018). Among the most prominent new city-­ regional planning practices are the state-orchestrated MAL agreements on land use, housing and traffic. Two kinds of ambiguity result from the dualistic structure of the current planning system in Finland. First, it is not always clear how municipality-based land-use planning relates to city-­ regional planning that, while being less formal, creates guiding conditions for the former. Second, concerns have been raised about the transparency and legitimacy of city-regional planning that operates on a non-statutory basis and lacks clear procedures for citizen participation that the Finnish Land Use and Building Act (1999) guarantees. This institutional ambiguity allows citizens to be involved in city-regional planning in ways and to an extent that the practitioners deem suitable in each case. By discussing the case of planning and decision-making related to the construction of the Tampere tramway, we have sought to address some

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problematic issues in the democratic elements of strategic land-use planning in Finnish city regions that resonate with city-regional developments in other Nordic countries. In agreement with critical work on city-­ regionalisation, we deem it important to enhance regional citizen participation in these processes, as, in Finland and elsewhere, they are more or less detached from the formal planning system and thus not subject to democratic control on land-use planning and urban development (Bäcklund & Mäntysalo, 2010; Healey, 2009; Lidström & Schaap, 2018). As city regions have grown into significant sites of economic development, policymaking and for the everyday lives of people in the past 40 years or so, with their import still increasing, it is vital to draw attention to deficiencies in their democratic character and to their potential as arenas for citizen engagement (Davoudi, 2003; Harrison, 2012; Kübler, 2018; Mattila & Heinilä, 2022; Parr, 2005; Tomàs, 2015). With their strong democratic values and institutions, Nordic countries are well positioned to lead the way towards more democratic, sustainable city-regional development where the rights and participatory potential of the ‘regional citizen’ are better recognised.

References Bäcklund, P., & Mäntysalo, R. (2010). Agonism and institutional ambiguity: Ideas on democracy and the role of participation in the development of planning theory and practice. The case of Finland. Planning Theory, 9(4), 333–350. Bäcklund, P., Kallio, K. P., & Häkli, J. (2014). Residents, customers or citizens? Tracing the idea of youthful participation in the context of administrative reforms in Finnish public administration. Planning Theory and Practice, 15(3), 311–327. Bäcklund, P., Häikiö, L., Leino, H., & Kanninen, V. (2018). Bypassing publicity for getting things done: Between informal and formal planning practices in Finland. Planning Practice and Research, 33(3), 309–325. Beel, D., Jones, M., & Rees Jones, I. (2018). Elite city-deals for economic growth? Problematizing the complexities of devolution, city-region building, and the (re)positioning of civil society. Space and Polity, 22(3), 307–327. Buser, M. (2014). Democratic accountability and metropolitan governance: The case of south Hampshire, UK. Urban Studies, 51(11), 2336–2353. Davoudi, S. (2003). European briefing: Polycentricity in European spatial planning. From an analytical tool to a normative agenda. European Planning Studies, 11(8), 979–999.

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Davoudi, S. (2019). Imaginaries of a ‘Europe of the regions’. Transactions of the Association of European Schools of Planning, 3(2), 85–92. Davoudi, S., & Brooks, E. (2021). City-regional imaginaries and politics of scalar fixing. Regional Studies, 55(1), 52–62. Davoudi, S., Kallio, K. P., & Häkli, J. (2021). Performing a neoliberal city-regional imaginary: The case of Tampere tramway project. Space and Polity, 25(1), 112–131. https://doi.org/10.1080/13562576.2021.1885373 Finnish Land Use and Building Act. (1999). 132/1999. www.finlex.fi/en/laki/ kaannokset/1999/en19990132.pdf Giersig, N. (2008). Multilevel urban governance and the ‘European city’. Springer. Goldstein, B. T., & Mele, C. (2016). Governance within public–private partnerships and the politics of urban development. Space and Polity, 20(2), 194–211. Häkli, J., Kallio, K. P., & Ruokolainen, O. (2020). A missing citizen? Issue-based citizenship in city-regional planning. International Journal of Urban and Regional Research, 44(5), 876–893. https://doi.org/10.1111/1468-­2427.12841 Harrison, J. (2012). Life after regions? The evolution of city-regionalism in England. Regional Studies, 46(9), 1243–1259. Haughton, G., & Allmendinger, P. (2015). Fluid spatial imaginaries: Evolving estuarial city-regional spaces. International Journal of Urban and Regional Research, 39(5), 857–873. Haughton, G., & McManus, P. (2012). Neoliberal experiments with urban infrastructure: The cross-city tunnel, Sydney. International Journal of Urban and Regional Research, 36(1), 90–105. Haughton, G., Deas, I., Hincks, S., & Ward, S. (2016). Mythic Manchester: Devo Manc, the northern powerhouse and rebalancing the English economy. Cambridge Journal of Regions, Economy and Society, 9(2), 355–370. Healey, P. (2006). Urban complexity and spatial strategies: Towards a relational planning for our times. Routledge. Healey, P. (2009). City regions and place development. Regional Studies, 43(6), 831–843. Hytönen, J. (2016). The problematic relationship of communicative planning theory and the Finnish legal culture. Planning Theory, 15(3), 223–238. Hytönen, J., & Ahlqvist, T. (2019). Emerging vacuums of strategic planning: An exploration of reforms in Finnish spatial planning. European Planning Studies, 27(7), 1350–1368. Hytönen, J., Mäntysalo, R., Peltonen, L., Kanninen, V., Niemi, P., & Simanainen, M. (2016). Defensive routines in land use policy steering in Finnish urban regions. European Urban and Regional Studies, 23(1), 40–55. Jonas, A. E., & Moisio, S. (2016). City regionalism as geopolitical processes: A new framework for analysis. Progress in Human Geography, 42(3), 350–370.

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Koivuniemi, P. (2013, October 21). Tampereen raitiotien reitti sittenkin Paasikiventielle? [The Tampere tram route to Paasikiventie after all?]. YLE news. https://yle.fi/uutiset/3-­6893225 Kübler, D. (2018). Citizenship in the fragmented metropolis: An individual-level analysis from Switzerland. Journal of Urban Affairs, 40(1), 63–81. Leino, H., & Laine, M. (2011). Do matters of concern matter? Bringing issues back to participation. Planning Theory, 11(1), 89–103. Lidström, A., & Schaap, L. (2018). The citizen in city-regions: Patterns and variations. Journal of Urban Affairs, 40(1), 1–12. Luukkonen, J., & Sirviö, H. (2019). The politics of de-politicization and the constitution of city-regionalism as a dominant spatial imaginary in Finland. Political Geography, 73, 17–27. Mäntysalo, R., Kangasoja, J., & Kanninen, V. (2015). The paradox of strategic spatial planning: A theoretical outline with a view on Finland. Planning Theory and Practice, 16(2), 169–183. Mattila, H., & Heinilä, A. (2022). Soft spaces, soft planning, soft law: Examining the institutionalisation of city-regional planning in Finland. Land Use Policy, 119, e106156. Metzger, J. (2013). Raising the regional Leviathan: A relational-materialist conceptualization of regions-in-becoming as publics-in-stabilization. International Journal of Urban and Regional Research, 37(4), 1368–1395. Ministry of the Environment. (2018). Steering of land use planning: Seeking a healthy and vital regional structure. www.ym.fi/en-­US/Land_use_and_building/Steering_of_land_use_planning Moulaert, F., Martinelli, F., Gonzalez, S., & Swyngedouw, E. (2007). Introduction: Social innovation and governance in European cities  – urban development between path dependency and radical innovation. European Urban and Regional Studies, 14(3), 195–209. Nabatchi, T., & Leighninger, M. (2015). Public participation for 21st century democracy. Wiley. Parr, J. (2005). Perspectives on the city-region. Regional Studies, 39(5), 555–566. Puustinen, S., Mäntysalo, R., Hytönen, J., & Jarenko, K. (2017). The ‘deliberative bureaucrat’: Deliberative democracy and institutional trust in the jurisdiction of the Finnish planner. Planning Theory & Practice, 18(1), 71–88. Raitiotieallianssi. (2017). Tampere tramway. https://raitiotieallianssi.fi/ in-­english/ Rodríguez-Pose, A. (2008). The rise of the “city-region” concept and its development policy implications. European Planning Studies, 16(8), 1025–1046. Salminen, A. (2008). Evaluating the new governance of the welfare state in Finland. International Journal of Public Administration, 31(10–11), 1242–1258.

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Soja, E. (2015). Accentuate the regional. International Journal of Urban and Regional Research, 39(2), 372–381. Tampereen kaupunki. (2011). Tampere’s modern tramway. Outline of Hervanta-­ Center-­Lentävänniemi general plan. [Tampereen moderni kaupunkiraitiotie. Hervanta-Keskusta-Lentävänniemi alustava yleissuunnitelma.] Tampereen kaupunki, EMCH + Berger. https://www.tampere.fi/liitteet/t/62BSY5E2O/ tampereen_moderni_kaupunkiraitiotie_raportti_20111003_15_34.pdf Tampereen kaupunki. (2018). Minutes of city board meeting 5.11.2018. [Kaupunginhallituksen kokouksen 5.11.2018 pöytäkirja.] http://tampere. cloudnc.fi/fi-­F I/Toimielimet/Kaupunginhallitus/Kokous_5112018/ Raitiotiehankkeen_osan_2_kehitysvaihe Tampereen kaupunki. (2019). Minutes of city board meeting 23.4.2019. [Kaupunginhallituksen kokouksen 23.4.2019 pöytäkirja.] https://tampere. cloudnc.fi/fi-­F I/Toimielimet/Kaupunginhallitus/Kokous_2342019/ Raitiotien_suunnittelu_Hatanpaan_valtati Tampereen kaupunkiseutu. (2010). TASE 2025. Kehittämisohjelma. Tampereen kaupunkiseutu. (2013). Letter of intent between Tampere city region and the state on matters related to land use, housing and traffic 2013–2015. [Tampereen kaupunkiseudun ja valtion välinen maankäytön, asumisen ja liikenteen aiesopimus 2013–2015.] https://www.tampereenseutu.fi/site/assets/ files/4336/mal-­aiesopimus_2013-­2015.pdf Tampereen kaupunkiseutu. (2014). Structural plan 2040. [Rakennesuunnitelma 2040.] https://www.tampereenseutu.fi/site/assets/files/4337/rakennesuunnitelma_sh_17_12_2014.pdf Tampereen kaupunkiseutu. (2017). Structural plan 2040. [Rakennesuunnitelma 2040.] https://www.tampereenseutu.fi/seututyoryhmat/maankaytto-­ja-­ asuminen/rakennesuunnitelma-­2040/ Tomàs, M. (2015). If urban regions are the answer, what is the question? Thoughts on the European experience. International Journal of Urban and Regional Research, 39(2), 382–389. Wu, F. (2016). China’s emergent city-region governance: A new form of state spatial selectivity through state-orchestrated rescaling. International Journal of Urban and Regional Research, 40(6), 1134–1151.

CHAPTER 6

Local Government: Contours of the Past, Present and Future Kaisu Sahamies, Arto Haveri, and Ari-Veikko Anttiroiko

Local Self-Government in Focus Finland is a country in which the realisation of collective solidarity has long been characterised by consensus politics and good government. The functioning of such a system relies heavily on the multi-level administrative machinery, in which the role of local government has been decisive. The Finnish local government model reflects the Nordic tradition, which is, by global comparison, characterised as a transparent, democratic and consensus-oriented system in which local and regional authorities have their separate functions. The essence of this system is, in many respects, different from other basic models of local government that are rooted in French, German and British administrative traditions (e.g. Kuhlmann et al., 2021). The backbone of Finnish public administration is local government, which relies on the principle of local self-government or autonomy

K. Sahamies (*) • A. Haveri • A.-V. Anttiroiko Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_6

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protected by the Constitution. Even if regionalisation tendencies have changed the local–regional governance scene since the 1990s, local governments are still key players in managing local public affairs. Over the centuries, local governments have gradually democratised. The peak of state control was seen in the heyday of the welfare society model during the post-war decades. Today, the Finnish local government system is built on self-governing local authorities with fairly smooth relationships with the state. They manage local public affairs democratically, with major political power vested in elected local councils and other organs of the local political system, assisted by formal organisations of local authorities and local public companies. Local governments work with various actors, ranging from local inhabitants, associations and companies to international organisations. Finland has a long research tradition on the political, administrative, managerial, legal and economic aspects of local government. However, there is only limited internationally distributed literature on the Finnish system of local government and local autonomy, which will be addressed in this chapter (see Haveri, 2009; Sjöblom, 2011; Vakkala et al., 2021). In this chapter, we describe the development of this system, with a focus on major changes in the post-war decades, and on that basis, we provide a brief introduction to the current structure, main functions and inter-­ governmental relations of local government. This chapter will also shed light on the contextual changes reshaping local governance as well as their consequences, which highlights the increasing importance of digitalisation, the growing differentiation between municipalities and the emergence of novel approaches to local public governance. Lastly, we will explore the future development of Finnish local government by anchoring the discussion on the emerging platform model, which aims at the smart utilisation of local potential for the benefit of all members of the local community.

Development of Local Self-Government From Its Early Origins to a Service Municipality In Finland, like in the other Nordic countries, the idea of local self-­ government is rooted in the ancient Nordic and German conceptions of the right and duty of free men to assemble to decide on collective affairs. This tradition of local autonomy has been deeply embedded in Finnish

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public governance and it was also an important background factor in the creation of municipal self-government by means of the Municipal Decree in 1865 and the Municipal Decree for Towns in 1873. Until the 1930s, Finnish municipalities were rather independent from the state. Then, an important turning point came when the state began assigning tasks to municipalities. By present-day standards, the tasks were initially modest, but in the 1960s came the epoch-making chance when the welfare state period started and municipalities were given responsibilities for producing many different welfare services. They began acting as an extension of the state administrative apparatus (Haveri, 2009). The expansion of the welfare state in the 1960s and 1970s reflected the deep impact of social democratic sentiment on society in all Nordic countries. Local governments became the administrative machinery that performed delegated administrative functions and welfare policies determined by the state. This development was accelerated by the rise of collective solidarity and the impact of the working-class movement that swept through Europe in the twentieth century. This period of the service municipality, which was connected to the creation and strengthening of the welfare state, reached its peak in the late 1980s. As a result of growing central government regulation, the state authorities in ministries and at the provincial level directed the operations of municipalities with the aid of thousands of individual regulations (on services see Chap. 11). This regulation, together with a complicated, poorly co-ordinated input-based funding system, led to the expansion of a bureaucratic and siloed local welfare service machine with meagre municipal autonomy. It became necessary to reform the complexity, red tape and heavy costs of the service system and strengthen the autonomy of municipalities (Haveri, 2009). From the 1990s Onwards: Ambiguity, Reforms and Increasing Differentiation The last three decades of local government have been marked by ambiguity, reforms and the increasing differentiation of municipalities. By ambiguity, we refer to the situation in which the big narrative of the service municipality, which was closely connected with institutionalism and bureaucracy theory, started to crumble when it was challenged first by New Public Management (NPM) doctrine, then New Public Governance (NPG) ideas and finally by structural reforms based on neo-Weberian

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thinking. Nowadays, municipal managers increasingly act within multi-­ level, complicated, continuously evolving and case-sensitive governance relations, including both the intra- and inter-organisational dimensions (Haveri et al., 2018). The first wave of local government reform was implemented at the beginning of the 1990s, with the free municipality experiment as its spearhead. This wave consisted of reforms typical of the NPM movement, such as the decentralisation, deregulation and lightening of bureaucracy, the empowerment of the market mechanism and a shift from input budgeting to a stronger focus on results (Sjöblom, 2011). Indeed, Finland in the 1990s was the most consistent and resolute implementer of NPM in the Nordic countries (Baldersheim, 2003). The first reform wave increased the autonomy of municipalities, resulting in many other positive effects on local government management. However, this did not resolve the conflict between service overload and inadequate financing. Moreover, the period of strengthening self-­ government remained short, and already at the turn of the millennium, the state again started to delegate new tasks and responsibilities to municipalities and accelerate regulation (Haveri, 2015). In the 1990s, local government reforms still formed a more or less coherent and mutually reinforcing whole, as the visionary goal was to strengthen local self-government. In the 2000s, the reforms were not as straightforward; rather, they included many different and even conflicting elements. In addition to NPM-oriented management reforms, governments have aimed to implement structural reforms and introduce regional structures, promote inter-municipal co-operation and public–private networks, improve the co-ordination of policies and strengthen political steering. At the turn of the millennium, attempts were made to combat the fragmentation and co-ordination problems of governmental activities, which were heightened by NPM reforms. This included many measures to strengthen networks and co-operation between municipalities and to use various soft steering mechanisms (Sjöblom, 2011). As the financial situation of municipalities deteriorated and future scenarios began to look worse with the ageing population, attention was increasingly focused on structural questions. From the mid-2000s onwards, the Finnish government started to introduce structural reforms, mostly in order to increase the size of municipalities and to create a broader basis for the organisation of social and healthcare services. This policy was

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quite effective in the beginning. Between 2005 and 2013, the number of municipalities decreased from 432 to 320, but later, this development congealed, and the number of municipalities stabilised at just over 300. Between 2014 and 2018, the Finnish government presented several plans to remove social and healthcare services from municipalities and transfer them to autonomous regions. Finally, in 2019, the giant reform that shifted social and healthcare services to established welfare areas was accepted, and at the beginning of 2023, the new Wellbeing Services Counties (WSCs) started their work. Taking into account that the welfare service functions covered more than 50% of local government budgets, this meant a totally new situation for municipalities and actually implied a systemic change in the entire public administration (see Chaps. 9 and 15).

Structure and Functions of Local Government Basic Structure of Local Government At the beginning of 2023, there were 309 municipalities in Finland. In general, Finnish municipalities tend to be geographically large, but small in terms of population. However, there is a growing differentiation among municipalities in terms of population and demographic factors. Although the median size of municipalities in 2021 was under 6000 inhabitants, over 40% of the Finnish population lived in the nine cities with more than 100,000 inhabitants. The largest of them is the capital city Helsinki, with approximately 658,500 inhabitants, followed by Espoo, with ca. 297,100 and Tampere, with ca. 244,200 inhabitants (Statistics Finland, 2022). Despite their vast differences, all municipalities have similarities in their organisational structure and a wide range of statutory activities. Since many of these activities are labour intensive, municipalities currently employ almost 10% of the employed workforce. Although the health and social services reform halved the tasks and expenditures of municipalities, local government is still estimated to be responsible for almost a third of the total expenditure of the Finnish public sector after the reform (Association of Finnish Local and Regional Authorities, 2022). The implementation of self-government and the arrangement of the administration, tasks and financial foundations of municipalities are regulated in the Local Government Act (410/2015). It sets a relatively loose framework for organising the administration and management of municipalities, leaving room for administrative structures that consider the

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diversity and local characteristics of municipalities. Each municipality must have a local council, local executive and local authority audit committee (Local Government Act 410/2015) as well as election boards, but beyond this, the local council decides independently on establishing other decision-­ making organs. Municipalities are steered by political decision-making, the highest decision-making body being the local council. The local council decides on the municipality’s activities and finances, including the municipal strategy, the approval of the budget and financial statements, the ownership policy principles and the approval of master plans, among other things. It also elects members of the local executive, known as the municipal board. The local executive drafts and implements the decisions of the council and is responsible for the administration and co-ordination of the financial management of the municipality. The local council also elects the chief executive officer, who has a public-service employment relationship with the municipality, or, alternatively, a mayor, who also serves as chairperson of the local executive. In addition to the mandatory decision-making bodies, most Finnish municipalities have local authority committees operating under the local executive, typically overseeing the provision of public services and drafting decisions. The number and activities of these committees vary, but in most municipalities, there are, for instance, a municipal planning committee and an education committee (Digital and Population Data Services Agency, 2019). The local council may also establish other decision-­making bodies, such as management boards for municipal enterprises. Tasks of Municipalities: Democratic, Service and Development Functions In addition to their role as the local public authority, municipalities have an important function in local democracy, service provision and community development. The democracy function in essence means the ways in which municipalities realise citizens’ self-government and ability to participate in local decision-making. Municipal democracy in Finland has been defined as a consensus democracy, characterised by proportional representation and the distribution of power, which provides space for different opinions and groups in decision-making (Sjöblom, 2011). Despite the strong role of local self-government in legislation, interest in municipal elections has

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traditionally been low in comparison to parliamentary and presidential elections and has gradually declined since the 1980s (Statistics Finland, 2021). In addition to the representative system, municipalities have introduced various channels for direct participation. According to the Local Government Act (410/2015, Chapter 5, Section 22), local councils must ensure that residents and service users have diverse and effective opportunities for participation and influencing the activities of the municipality. These include, among other things, planning and developing services together with service users, finding out residents’ opinions before making decisions and the representation of specific interest groups. However, according to a survey by the Association of Finnish Local and Regional Authorities (2021), only 20% of citizens think that their opinions are considered in the decision-making process. As described earlier, the role of the municipality as a service provider has been accentuated since the 1960s. Although the responsibility for organising public healthcare, social welfare and rescue services has now been transferred to the new WSCs, municipalities still have many statutory duties defined in special laws. These include basic education (on primary and secondary education see Chap. 14); early childhood education and care; cultural, youth, library and sports services; planning, land-use policy and zoning; the construction of roads and other infrastructure (on land use and planning see Chap. 5); and other technical services, such as building supervision, environmental protection and water and waste management. Although legislation defines the purpose, objectives and outcomes of the statutory activities of municipalities, the local self-government principle ensures that municipalities have discretionary power to decide how they organise such services. Municipal councils can, for example, outsource the provision of certain services to businesses, corporatise their operations or set up joint municipal authorities. In addition to mandatory duties, the municipalities can choose to carry out other tasks as well. Some of them, such as providing upper secondary schools and vocational training, are regulated by the state government, whereas others are non-statutory. The right to assume non-statutory tasks is central to the principle of self-government for Finnish municipalities. Many of the municipalities’ non-statutory tasks typically concern the economy, employment and housing (Ministry of Finance, n.d.) and are thus often linked to local development. As developers of their

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communities, municipalities respond to the national and global competition for talent, investment, businesses and other resources. In this role, they aim to secure employment and business conditions in their area. Nurturing conditions for economic vitality and successfully linking together key actors to promote innovation and public value creation require governance in networks and ecosystems, generally associated with the NPG doctrine. Tasks related to the development function can also be statutory. The number of these tasks will increase considerably in 2025 when the responsibility for employment services will be transferred to municipalities. Collaboration and Inter-governmental Relations As Finland’s regional government structure has historically been weak, inter-municipal collaboration has been an essential part of municipalities’ activities for decades (Anttiroiko & Valkama, 2017). Municipalities often seek economies of scale by establishing inter-municipal utility companies and joint municipal authorities to provide services ranging from water management and public transport to education and—before the establishment of the WSCs—healthcare. Moreover, each municipality must be a member of a Regional Council, which is a joint municipal authority responsible for regional development and regional land-use planning. Municipalities also have a statutory duty to co-operate with WSCs to promote the wellbeing of their residents. It is worth pointing out, however, that WSCs are self-governing units with directly elected councils. Therefore, they are not based upon inter-municipal co-operation. The division of duties between the state and municipalities in Finland derives from the idea of fiscal federalism. According to the principles of fiscal federalism, the stabilisation policy and income distribution policies should be centralised, whereas much of the responsibility for allocation and financing operations is on local and regional governments. The principle of adequate financial resources ensures that whenever new obligatory tasks are assigned to municipalities, the state must provide adequate funding to meet those duties (Vakkala et al., 2021). Local Government Finance The main source of income for municipalities is tax revenue, which, according to the 2022 estimates, covers about 45% of the municipalities’

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total income after the health and social services reform. This is followed by operational income, charges from service fees (estimated at 29%), central government transfers for operational costs (estimated at 13%) and other income items (Association of Finnish Local and Regional Authorities, 2022). The tax revenue consists mainly of municipal tax, but municipalities also receive tax revenue from real estate tax and a share of the corporate tax revenue. Central government transfers are usually block grants to cover the operating costs of statutory public services, leaving municipalities to exercise policy discretion within their own jurisdictions (Vakkala et al., 2021). With the health and social services reform, the pressure of increasing costs related to health and social services was removed from local governments, which reduced the emphasis on the service function associated with strong central government steering. At the same time, however, the means for balancing the local financial situation can be more limited than previously (on government finances, see Chap. 7).

Trends Reshaping Local Government Demographic Shifts There are three particular demographic shifts that have left their mark on local government. First, urbanisation is increasing regional disparities and dividing the country into growing urban areas and a declining countryside. It has been estimated that, in the long run, the population will concentrate around three major urban centres, those of the Helsinki region, Tampere region and Turku region, which implies that local governments will face different challenges in different parts of the country. Second, ageing is an alarming trend. According to a population projection, the share of the population aged 65 and over will be about one-­ quarter by 2030. Rapid ageing will increase local public expenditures due to the expected rise in the demand for care services (Valkama & Oulasvirta, 2021). This development will be a real test of the service capability of both local authorities and the newly created regionally organised health districts, officially known as WSCs. Third, while immigration in its current extent is a relatively new phenomenon in Finland, in recent decades, it has become an important factor in addressing the decreasing age dependency ratio and labour shortages in certain  fields. However, it also puts additional pressure on local service machinery, particularly in the capital region, where approximately half of

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Finland’s foreign-born population is concentrated. Moreover, growing immigration has been linked to an increase in segregation tendencies within society. In response, municipalities play a vital role in facilitating the integration of immigrants, promoting inclusion, and enhancing employment opportunities. Digitalisation Finland is a tech-savvy society, which implies that digitalisation has a pervasive impact on society, including local government. Finland has persistently been at the top of major global e-government rankings (e.g. European Commission, 2022; United Nations, 2022). A dramatic turn took place around the Great Internet Explosion in the first half of the 1990s. Digital public interactive and transaction services have increased since then, while more recently, the focus has gradually shifted towards social media, on the one hand, and smart city applications and artificial intelligence, on the other. Among the most recent trends is the facilitation of citizen and stakeholder engagement with the help of smart solutions and platforms, which increases agility and dynamism in local governance, such as in OuluHealth Labs, the Make with Espoo innovation platform, the DigiOne schooling ecosystem in Vantaa and smart mobility applications in Helsinki (Haveri & Anttiroiko, 2021; Kinder et al., 2020; Sahamies et al., 2022). In addition, all major cities have incorporated digitalisation into a wider policy framework geared around smart city, innovation and development ecosystems (Anttiroiko & Sahamies, 2022; Randall & Berlina, 2019). The European Union and Globalisation Another exogenous factor that has dramatically shaped the orientation in local government, especially since the 1990s, was Europeanisation and, as its concrete expression, Finland’s membership in the EU in 1995. It is estimated that some 50% to 60% of the matters decided in local government are to some degree conditioned by EU policies and regulations. In addition, collaboration with other European localities has increased due to collaborative projects financed by the European Regional Development Fund and other EU programmes (Kuhlmann et al., 2021.) A contextual development that goes beyond the European scene is the increase in international collaboration and cross-boundary interaction as a

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part of globalisation. It has left its mark on local governments through the global economy, the internationalisation of politics and global cultural trends (Cohen et al., 1996; Kresl & Fry, 2005). It generated wealth as well as inequality, which posed an obvious challenge to localities in every open economy, Finland included. This emphasises the role of local capacity building and smart adjustment strategies, which are associated with trends such as the Metropolitan Revolution and the New Localism (Katz & Bradley, 2013; Katz & Nowak, 2017). Finnish local governments have networked through international organisations and, more importantly, they have become globally oriented actors on the scene of global and multi-level governance. As a primus inter pares, Helsinki, the capital of Finland, is the most internationalised and globally recognised city in the country, with a notable reputation as an innovation and technology hub. Local Responses to Contextual Changes The above-mentioned trends have conditioned the development of local government in many respects. The differences between municipalities have widened during the last 20  years, particularly as a result of demographic changes. In order to adapt to this situation, cities should be able to invest in and build new services for their growing populations, whereas rural communities should be able to adapt intelligently to rapidly ageing populations and declining vitality. The other obvious change has been the need to merge small municipalities and seek economies of scale through administrative reforms. One of the expressions of this trend is regionalisation, which, since the 1990s, has increased the role of regions. The Finnish welfare system was primarily a two-tier system, while today it is a three-tier system in which regions play a significant role (Anttiroiko & Valkama, 2017; Haveri et al., 2015). At the regional level, Regional Councils (18 on the mainland plus one for the Åland Islands) channel national and EU funding to regional development projects, while newly created WSCs are responsible for healthcare, social and rescue services. There are 21 such counties in Finland, supplemented by one special arrangement designed for Helsinki, which, as the capital and largest city of Finland, organises its own healthcare, social and rescue services. Lastly, local governments have responded to exogenous pressures through increased managerialism, as seen in agencification, marketisation, contracting out, networking and partnerships. In addition, local governments have become increasingly open, inclusive and experimental, thus

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increasing their innovativeness, agility and ability to cope with the conditions of the global economy (cf. Sturzaker & Nurse, 2021). Digitalisation is an inherent part of such adjustment processes. In sum, over several decades, Finnish local government has become an innovative and development-oriented multi-purpose institution of an open techno-savvy welfare society with a vital role in local infrastructure, education and economic development policy.

The Future of Local Government At the beginning of 2023, the service tasks of municipalities were reduced by almost half with the health and social services reform when these tasks were transferred to 21 self-governing WSCs. It was the biggest administrative reform in the history of independent Finland. In this reform, Finland partially followed the example of other Nordic countries, where the principle of economies of scale plays an important role in the organisation of healthcare services. In Sweden, the regional level has been responsible for healthcare for decades. In Norway, hospitals were organised into five regions and nationalised in 2002, and Denmark implemented large-­ scale local government reform in 2007 (Magnussen et al., 2010). Thus far, the effects of the reform are only partially visible. On the one hand, it is possible to reason that municipalities have lost about half of their importance and power with budget cuts and a diminishing influence over people’s health and wellbeing. On the other hand, financing difficulties, particularly for smaller municipalities, are expected to decrease, and municipalities can now pay attention to economic and community vitality. In European comparison, Finnish municipalities still have quite a wide range of different tasks, ranging from education and culture to infrastructure and local economic development. However, the justification for the municipality’s existence is not based so much on the municipality’s service function, but rather on the municipality’s ability to act in many different areas of life to promote the wellbeing of its citizens. Various tasks related to economic, ecological and social sustainability clearly increase their importance as well as municipalities’ role in local economic development. Inter-municipal co-operation in various policy areas continues to play an important role in the management of municipalities. For example, Regional Councils have retained their position as important partners in local and regional development. However, the most crucial collaboration interface is now between municipalities and the newly established

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WSCs. As we wrote earlier in this chapter, Finnish municipalities exploit digital technologies, making them among the most advanced local e-­governments globally. This development is likely to continue and will have a great impact on the local governance model. Alongside and instead of networks, platformisation will be increasingly visible in local development and innovation, citizen participation and the provision of local public services, especially in larger cities. Platform governance is accelerated by municipalities’ heightened need to address various sustainability challenges. In these activities, municipalities have to co-operate more and more with other public and private organisations and civil society actors. Even more than now, municipalities will need to shift their attention from the municipal organisation to the community and partnerships. One of the major institutional interfaces will be that between municipalities and WSCs. The governance model of the future municipality can be summed up as a networked platform for the activities of municipal residents, associations and companies. In platform governance, local government adopts a facilitative and enabling role and seeks to create value by utilising the skills, knowledge and resources of local communities in different kinds of co-creation processes (Sahamies et al., 2022). The task of the city government is not so much to provide certain services, but rather to guide the local community to utilise its unique development opportunities. However, it should be noted that municipalities’ resources differ from each other, as do their opportunities to utilise innovative solutions. Larger cities and municipalities are in a better position in the development of platform governance than smaller ones.

References Anttiroiko, A.-V., & Sahamies, K. (2022). Designing city service ecosystems: The case of the city of Espoo in the capital region of Finland. In N. A. Streitz & S. Konomi (Eds.), Distributed, ambient and pervasive interactions: Smart environments, ecosystems, and cities (HCII 2022. Lecture Notes in Computer Science) (Vol. 13325, pp.  139–157). Springer. https://doi. org/10.1007/978-­3-­031-­05463-­1_10 Anttiroiko, A.-V., & Valkama, P. (2017). The role of localism in the development of regional structures in post-war Finland. Public Policy and Administration, 32(2), 152–172. https://doi.org/10.1177/0952076716658797 Association of Finnish Local and Regional Authorities. (2021). Kuntalaistutkimus 2020: Kuntalaisten luottamus kunnan päätöksentekoon ja päättäjiin. [Municipal

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Survey 2020: Local residents’ confidence in municipal decision-making and decision-makers.] https://www.kuntaliitto.fi/sites/default/files/media/file/ Liitediat%2014.4.2021%20tiedotteeseen_Luottamus%20p%C3%A4% C3%A4t%C3%B6ksentekoon.pdf Association of Finnish Local and Regional Authorities. (2022). Isot reformit ja kuntatalous: Sote lähtee ja työllisyyden hoito tulee – Mitä kunnassa tulee tietää uudistusten kynnyksellä? [Large-scale reforms and local government finances: Social and healthcare services are leaving and employment services are coming  – What should the municipality know about on the eve of reforms?] https://www.kuntaliitto.fi/julkaisut/2022/2141-­isot-­reformit-­ja-­kuntatalous Baldersheim, H. (2003). Local government reforms in the Nordic countries: Bringing politics back in? In N. Kersting & A. Vetter (Eds.), Reforming local government in Europe: Closing the gap between efficiency and democracy (pp.  29–38). VS Verlag für Sozialwissenschaften. https://doi. org/10.1007/978-­3-­663-­11258-­7_2 Cohen, M.  A., Ruble, B.  A., Tulchin, J.  S., Garland, A.  M., & (Eds.). (1996). Preparing for the urban future: Global pressures and local forces. Woodrow Wilson Centre Press; Johns Hopkins University Press. Digital and Population Data Services Agency. (2019, September 23). Municipalities and local government. Suomi.fi. Retrieved May 27, 2022, from https://www.suomi.fi/citizen/rights-­and-­ obligations/fundamental-­ rights-­and-­civic-­activity/guide/how-­finlands-­public-­administration-­ works/ municipalities-­and-­local-­government European Commission. (2022). The Digital Economy and Society Index (DESI): Shaping Europe’s digital future. https://digital-­strategy.ec.europa.eu/en/ policies/desi Haveri, A. (2009). Finnish local autonomy: A foundation for democracy and efficiency. In J.  Mylly (Ed.), Challenges for Finland and democracy (pp. 122–149). Edita. Haveri, A. (2015). Nordic local government: A success story, but will it last? International Journal of Public Sector Management, 28(2), 136–149. Haveri, A., & Anttiroiko, A.-V. (2021). Urban platforms as a mode of governance. International Review of Administrative Sciences. https://doi.org/10. 1177/00208523211005855 Haveri, A., Airaksinen, J., & Jäntti, A. (2015). The Kainuu regional experiment: Deliberate and unintended effects of scaling local government tasks to the regional level. Scandinavian Journal of Public Administration, 19(4), 29–47. Haveri, A., Paananen, H., & Airaksinen, J. (2018). Narratives on complexity: Interpretations on local government leadership change. Administrative Culture, 19(1), 37–53.

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Katz, B., & Bradley, J. (2013). The Metropolitan Revolution: How cities and metros are fixing our broken politics and fragile economy. Brookings Institution Press. Katz, B., & Nowak, J. (2017). The new localism: How cities can thrive in the age of populism. Brookings Institution Press. Kinder, T., Six, F., Stenvall, J., & Memon, A. (2020). Governance-as-legitimacy: Are ecosystems replacing networks? Public Management Review. https://doi. org/10.1080/14719037.2020.1786149 Kresl, P.  K., & Fry, E.  H. (2005). The urban response to internationalization. Edward Elgar. Kuhlmann, S., Wayenberg, E., Bergström, T., & Franzke, J. (2021). The essence and transformation of local self-government in Western Europe. In T. Bergström, J. Franzke, S. Kuhlmann, & E. Wayenberg (Eds.), The future of local self-government (pp.  1–14). Palgrave Macmillan. https://doi. org/10.1007/978-­3-­030-­56059-­1_1 Local Government Act 410/2015. Retrieved September 18, 2022, from https:// www.finlex.fi/fi/laki/kaannokset/2015/en20150410.pdf Magnussen, J., Vrangbaek, K., & Saltman, R. B. (2010). Nordic health care systems: Recent reforms and current policy challenges. Open University Press. Ministry of Finance. (n.d.). Local government’s duties and activities. https:// vm.fi/en/local-­government-­s-­duties-­and-­activities Randall, L., & Berlina, A. (2019). Governing the digital transition in Nordic regions: The human element (Nordregio Report No. 2019:4). Nordregio. http://norden.diva-­portal.org/smash/get/diva2:1295022/FULLTEXT01.pdf Sahamies, K., Haveri, A., & Anttiroiko, A.-V. (2022). Local governance platforms: Roles and relations of city governments, citizens, and businesses. Administration and Society, 54(9), 1710–1735. https://doi.org/10.1177/ 00953997211072531 Sjöblom, S. (2011). Finland: The limits of the unitary decentralized model. In J. Loughlin, F. Hendriks, & A. Lidström (Eds.), The Oxford handbook of local and regional democracy in Europe (pp.  241–260). Oxford University Press. https://doi.org/10.1093/oxfordhb/9780199562978.003.0011 Statistics Finland. (2021, June 19). Municipal elections 2021, result of the control calculation. https://www.stat.fi/til/kvaa/2021/03/kvaa_2021_03_2021-­ 06-­22_tie_001_en.html Statistics Finland. (2022). Statistics from PX-Web Statfin database. https:// pxweb2.stat.fi/PxWeb/pxweb/fi/StatFin/ Sturzaker, J., & Nurse, A. (2021). Rescaling urban governance: Planning, localism and institutional change. Policy Press. United Nations. (2022). Country data [UN e-government knowledgebase]. https://publicadministration.un.org/egovkb/Data-­Center

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Vakkala, H., Sinervo, L.-M., & Jäntti, A. (2021). Local self-government in Finland. In B.  Brezovnik, I.  Hoffman, & J.  Kostrubiec (Eds.), Local self-­ government in Europe (pp.  173–205). Institute for Local Self-Government Maribor. https://doi.org/10.4335/978-­961-­7124-­00-­2 Valkama, P., & Oulasvirta, L. (2021). How Finland copes with an ageing population: Adjusting structures and equalising the financial capabilities of local governments. Local Government Studies, 47(3), 429–452. https://doi.org/1 0.1080/03003930.2021.1877664

PART III

Steering Mechanisms

CHAPTER 7

Public Financial Management: Budgeting, Accountability and Auditing Lasse Oulasvirta and Jaakko Rönkkö

Introduction Budgeting and accountability of the usage of trusted tax money are traditional core areas of financial management in the public sector. The duty to be publicly accountable is more significant in government than in business financial reporting. The principles of publicity and transparency are important in budgetary and financial reporting. These include the lawful and accountable behaviour of budget entities, in other words their compliance with the approved budget and responsibility to provide as much value as possible with the entrusted budget resources. In terms of the shared goals of the Finnish public governance strategy, open government reinforces dialogue in society and promotes people’s right to understand and be understood. Transparent public budgeting, reporting and reliable audit practices are key elements in achieving these strategic goals, as they create opportunities for citizens to participate.

L. Oulasvirta (*) • J. Rönkkö Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_7

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The financial accounting principles that have been embraced and their practical consequences in local and central government accounting define the ways in which we understand the flow of resources. In the Finnish case, budgets were transformed from traditional cameral budgets to performance-­based budgets in both the local government sector and central government in the 1990s. The cameral budgets were, by nature, expenditure and financial budgets, while the performance-based budgets also made budget entities accountable for their activity outputs and outcomes. Thus, the Finnish public sector already has 30  years of experience in performance-based budgeting. This means that the money process has already been tried out in terms of connecting, as well as possible, to the real process of providing services and bringing about outcomes with good value. Performance-based budgeting became legally obligatory in both local and central governments in the 1990s. However, this now-­established budgeting idea is confronted by practical measurement and other implementation problems both internationally and in the Finnish public sector. Generally speaking, if the government entity managers lack operational decision-making power and the entity lacks reliable and sufficient data on outputs and outcomes, performance-based budgeting is not, in practice, a realistic budget model (Oulasvirta, 2019). The budgetary (budget-linked) accounting approach emerges from the agreed-upon budget in the public sector. Bookkeeping must follow the logic and structure of the budget regarding the allocation of income and expenditure to the correct budget codes. Another important feature is that this type of budgetary accounting has been accomplished via financial accrual accounting, drawing from for-profit business accrual accounting. With accrual accounting, we mean that accounting events, such as revenues and expenses, are registered when the transactions occur, not when a payment is received or made. In the Finnish local government, the budget structure was synchronised with external financial statement structures in the accounting reform of 1997. The budget structure includes an income statement and a cash flow part, in addition to the traditional current budget and investment budget parts. In the Finnish central government, budget-linked accounting was preserved, and accrual financial accounting was introduced to the budget-linked accounting system as a parallel and dual accounting system. However, what is important is that the allocation of expenditures and incomes to the budget is based on accrual-based allocation principles and,

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furthermore, on the principle of linking budget appropriations to the output and outcome goals (Oulasvirta, 2015). The structure of this chapter is organised as follows. In the second section, we present the basic features and developments of public budgeting and accounting in the Finnish local and central governments. The main features of performance-based and accrual-based budgeting are explained in the third section. The fourth section is dedicated to auditing institutions in Finnish central and local governments. Finally, the fifth section concludes this chapter.

Basic Features and Development of Public Budgeting and Accounting in Finland The transition to accrual accounting took place in the Finnish local government sector in 1997 and in central government in 1998. In the Finnish central government, the transition from a cameral accounting system to accrual accounting was concretised in the State Budget Decree (1243/1992), which stipulates in Section 5a ‘the principle for entering an expense deriving from the acquisition of production factors shall be the reception of the said production factor.’ Furthermore, the State Budget Decree Section 5a states that ‘revenue from the sale of a product or service shall be recorded when the product is delivered or the service rendered (accrual basis principle).’ Thus, the accrual basis in commercial accounting was introduced rather straightforwardly in the decree. However, in Finnish state budget accounting, the on-budget expenditure and revenues can also be recorded at the time of payment, with tax revenues being the major example of recording at the time of payment. Thus, the Finnish central government accounting system can be described as a mixture of accrual accounting and cash basis accounting. The Local Government Act (410/2015) stipulates that ‘in addition to the provisions of this Act, the accounting obligations, accounting and financial statements of municipalities are subject to the provisions of the Accounting Act.’ Thus, the link between the Local Government Act and the Accounting Act (1336/1997) is direct. However, the Local Government Act also stipulates that ‘the local government sub-committee of the Finnish Accounting Board issues instructions and opinions on the application of the Accounting Act.’ Therefore, there are some differences

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between private sector organisations and municipalities in the way they dispense the Accounting Act (on local government, see Chap. 6). Published budgets, budget out-turn reports and the associated audit reports are key elements of public sector accountability. Budgets, budget out-turn statements and audit reports on budget compliance and performance should be easily accessible to any addressee via up-to-date web pages. In the Finnish central government, as well as in local government, budget and budget out-turn statements must be inserted into publicly available internet platforms by law. In the central government, the Budget Decree (14 §, 25472004) stipulates that the financial and activity plan with the performance goals (on performance management, see Chap. 8) and the annual report must be published on a publicly available internet platform. In addition, local governments must, according to the Local Government Act (410/2015) Section 109, ensure that essential information about the services arranged by a municipality and about the municipality’s activities, and at least the following information, is published on a public information platform: • Municipal strategy • Administrative regulations • Budget and financial plan • Financial statements • Local authority audit committee’s assessment report • Auditors’ report • Agreements on co-operation between municipalities • Corporate governance principles applying to the local authority corporation • Declarations of private interests of elected officials and local government officers • Principles applying to fees and compensation of elected officials • Payments charged for services The Local Government Act (410/2015) stipulates that ‘by the end of each year, local councils must approve a budget for the municipality for the next calendar year, taking into account the financial responsibilities and obligations of the local authority corporation. In connection with budget approval, local councils must also approve a financial plan for three or more years (planning period). The budget year shall be the first year of the financial plan.’ Furthermore, the Local Government Act requires that

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‘the budget must be adhered to in the municipality’s activities and financial management.’ In addition, one method of enhanced budget accountability and responsiveness to people living in the jurisdiction is to create public involvement in the budgetary process through participatory budgeting practices. The recommendation of the Association of Local Authorities recommends this (Korento & Ylitalo, 2022). The Local Government Act requires this of all Finnish local governments as its Section 22—opportunities to participate and exert influence stipulates that: 1. A municipality’s residents and service users have the right to participate in and influence the activities of the municipality. Local councils must ensure that there are diverse and effective opportunities for participation. 2. Participation and exerting influence can be furthered, especially by: • Arranging opportunities for discussion and for views to be presented, and setting up local resident panels; • Finding out residents’ opinions before taking decisions; • Electing representatives of service users to municipal decision-­ making bodies; • Arranging opportunities to participate in the planning of the municipality’s finances; • Planning and developing services together with service users; and • Supporting independent planning and preparation of matters by residents, organisations and other corporate entities. It should be noted that governments have established professional and independent public audit institutions. This is obligatory in Finland. Manes Rossi et  al. (2021) have classified European local government external audit systems into private, mixed and public systems. Drawing from this classification, the Finnish system belongs to the group of private audit systems. Furthermore, Johnsen et  al. (2004) characterised the Finnish municipal auditing system as ‘plural forms,’ because the Finnish system of municipal auditing is a combination of professional auditing executed by private audit firms and performance auditing executed by politically elected municipal audit committees. In the local governments, the Local Government Act (2015) stipulates that ‘for the audit of administration and finances, the local council shall

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appoint a firm of authorised public accountants, which must be a firm approved by the Board of Chartered Public Finance Auditing (CPFA corporation).’ In the central government, financial and budget statements are audited by the State Audit Office of Finland. In addition to publicity and transparency, extra budgetary funds that are not included in the approved budget should be avoided or explained in the year-end statements. The use of ‘off-budget’ fiscal mechanisms and public–private partnership (PPP) arrangements should be transparently explained in the reporting. This is in line with the OECD’s recommendation (2015) stating that ‘governments should include and explain public programs that are funded through non-­ traditional means—e.g. PPPs—in the context of the budget documentation, even where (for accounting reasons) they may not directly affect the public finances within the time frame of the budget document.’ Finnish public sector budget and accounting laws require off-budget liabilities, as well as contingent liabilities, and risk matters to be published in both local government and central government annual reports. For instance, the Local Government Act (2015) stipulates that in the annual report, rental liabilities and derivatives must be explained in the notes. In rental liabilities, for instance, all leasing arrangements the local government has contracted to outside parties must be included. According to Section 67a (254/2004) of the State Budget Decree, the State Final Annual Accounts must include an itemisation of government guarantees and warranties and other contingent liabilities granted by the government that are in effect at the end of the budget year. The reasonable balance principle in budgeting means that budgets should not lead to unsustainable indebtedness. Public sector entities must plan budgets so that expenditures can be paid from incomes—loan income included. In the local government sector, the balance principle is bound to the current economic balance illustrated in the income statement and balance sheet. If a municipality has accrued a deficit, it must be covered during the planning period of four years after the year of publishing a financial statement containing an accrued deficit, as the Local Government Act stipulates that ‘the financial plan must be in balance or in surplus.’ A deficit in the municipality’s balance sheet must be covered within no more than four years from the start of the year following adoption of the financial statements. In its financial plan, the municipality must decide on the specific measures for covering the deficit during the stated period. Strategy-linked budgets are drawn up so that the annual budget functions as a tool to implement longer-term strategic goals. In the local

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government, the Local Government Act requires that ‘the budget and financial plan must be drawn up so as to put the municipal strategy into effect and to secure the preconditions for performance of the municipality’s functions.’ The operating and financial targets of the municipality and the local authority corporation shall be approved in the budget and financial plan. In the central government, the balance principle is regulated by the European Commission, as Finland is a member of the EU. The EU stability and growth pact (1466/97 and 1467/97) and the rules for public sector deficit (3% of GDP) and public debt (60% of GDP) have been accomplished with the domestic Budgetary Framework for four years for each term of government. The budget law requires that this frame budget covers four years. A new budget strand is issue-based budgeting, in which the budget decision-makers allocate earmarked resources in the budget allocation, for instance, for carbon neutrality actions mitigating climate change or actions enhancing gender equality or the position of children. This has been introduced both to the state budget and to local government budgeting (Korento & Ylitalo, 2022; Ministry of Finance, 2019). Both local governments and the central government must explain their policies regarding sustainability and environmental liabilities in their annual reports. Furthermore, anti-bribery and corruption issues have become a key element in financial reporting at all levels of public governance (Ministry of Economic Affairs and Employment of Finland, 2018; State Annual Report, 2021).

Performance-Based and Accrual-Based Budgeting in Finland Accrual-Based Budgeting New public financial management (NPFM) generally favours and promotes accrual-based budgeting, which has traditionally been the basis for budgeting in private sector entities. As NPFM started to promote private sector financial management approaches and techniques to the public sector, accrual-based budgeting gradually began to gain momentum in public sector entities. In practice, modified accrual-based budgeting is more realistic and popular than full accrual-based budgets. One reason for this

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Fig. 7.1  A full accrual-based budget with separate partial budget plans (modified from Oulasvirta, 2019, Fig. 4.1)

is that full accrual-based budgeting requires a high level of maturity in a country’s accounting resources, information systems and accounting skills. In many countries, not all the preconditions of the fully fledged accrual basis are met or available in practice. According to Schick (2007), accrual budgeting is not ready for widespread application as a budget decision rule because of its complexity. However, it suffices more as an analytical tool than as a decision rule in budgeting. Without appropriate discretion, managers are likely to regard accruals as technical entries that have no bearing on the resources available for expenditures. In a fully fledged accrual budget, the depreciation costs of fixed assets are included as appropriations. In addition, changes in inventory and other accruals must be recognised in the budget according to the rules of business accounting. The Finnish local government budgets follow the model illustrated in Fig. 7.1. In the central government, the annual budget of the state follows a structure that is not merged with the external financial statement structure (Oulasvirta, 2015). The annual budget’s main titles of expenditure and income follow a structure for each administrative branch of each ministry regarding both incomes and expenditures. The dual accounting system parallelly accounts for, in addition to budget out-turn statements, external financial statements, which contain an income statement, funds flow statement and a balance sheet with notes and appendices. Performance-Based Budgeting The so-called Planning–Programming–Budgeting System (PPBS) was invented in the 1960s based on an ideal rational planning and

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decision-making model that flows from overall goals to programmes and annual budgets, all in perfect congruence with each other. This model is closely related to the idea of strategy-linked budgeting. Later, the emphasis was laid on budgeting for results and for outcomes—or performance-­ based budgeting. Input-based budgets have been transformed more or less into output- and outcome-based budgets (OBBs) or performance-­ based budgets (PBBs). In Finland, the output goals decided by the council are binding budget rules as much as they are binding financial budget rules. Section 110 § (4) of the Local Government Act (410/2015) stipulates: ‘The budget shall include the appropriations and revenue estimates required to fulfil the duties and meet the operating targets, and an indication of how the financing requirement will be covered. The appropriations and revenue estimates may be stated in gross or net terms. Budgets and financial plans shall have a section covering operational finances and an income statement, and a section on investment and financing.’ Generally, it is more difficult to calculate from qualitative outcome goals to costs than from quantitative output (product) goals to costs. Cost-effectiveness is, in principle, the ultimate key ratio in public sector activities, meaning that the budget money should be allocated and used in the best possible manner in providing outputs with desirable outcomes related to citizen needs and agreed activity goals. Economy alone is not a comprehensive yardstick because it measures costs related to output—for instance, economy as euros/patient care operation—but not effectiveness as euros/cured patient (outcome). In practice, it is many times easier to measure and report the cost per output figure than the cost-effectiveness figures containing quality and impact assessments. Budget reforms often go hand-in-hand with lump-sum budgeting, which means that budget authorisations do not go into detailed single-line items but rather contain total revenues, total expenses and investments, or even only a total result figure. Budget entity managers have greater freedom as long as they do not exceed the gross amounts and reach their performance targets. These reform features mean that budget entity managers should have more flexibility and power to operate, for instance, regarding personnel policies, recruiting, outsourcing, etc. On the other hand, responsibilities regarding activity performance have increased in terms of outputs and outcomes with budget resources (Oulasvirta, 2019).

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Fig. 7.2  Government planning and reporting system in Finland (adapted from Oulasvirta, 2019, Fig. 4.2)

Other Planning and Reporting Modes It is important to align operative budget plans with government strategic plans. That is why governments also make and publish separate strategic plans, multi-year budgets, medium-term spending frameworks and long-­ term fiscal sustainability reports. It is important to connect these different reports to each other systematically in order to avoid confusion (Schick, 2007). The idea of purposive strategy-linked budgeting is to try to reduce this risk. From the budget decision-maker’s point of view, it would be ideal for them to be supplied not only with consistent information on yearly costs but also with the total life-cycle costs of long-term liabilities caused by contracts, commitments and investments to which the government is planning to bind itself. If this information is not directly in the budget figures, it could be in the budget overview text or in budget supplements. Furthermore, life-cycle calculations of significant investments or complicated PPP arrangements may be included and transparently explained in other plans and documents. In this case, the budget documents should make reference to these other sources of information (Oulasvirta, 2019). Both the local government and the central government follow the same planning and reporting system in Finland (Fig. 7.2).

Auditing Institutions in Finnish Central and Local Government It is necessary for governments to have reliable auditing institutions. Here, we may refer to Schick’s (Schick, 2007, p. 120) conclusions: ‘For performance budgeting and accrual budgeting to take root, it is essential that

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governments have formal procedures for reviewing reported results, including accepted standards for measuring outputs and outcomes and for reporting costs and liabilities.’ Auditing is efficiently and independently organised in both the local government and the central government in Finland. Professional public sector audit institutions have a vital role in ensuring transparent and reliable financial reporting for all levels of Finnish public sector governance. In the local governments, external financial auditing is assigned to professional certified auditors, while performance evaluation belongs to the audit committees. The Local Government Act (410/2015) stipulates that the auditors of municipalities must be audit firms authorised by the Board of Chartered Public Finance Auditing (BCPFA). The CPFA corporation must appoint a chartered public finance auditor (CPFA auditor) as the responsible auditor. The Local Government Act states that CPFAs must comply with good auditing practices in public administration, as approved by the Chartered Public Finance Auditor Association (Chartered Public Finance Auditor Association, 2006). The fundamentals of these guidelines are drawn from the International Standards on Auditing (ISA) issued by the International Federation of Accountants (IFAC). The main audit areas in Finnish municipal statutory audits are the administration, accounting and financial statements of a municipality (Paananen et al., 2021). Auditors shall, in their duties, be subject to liability for acts in office (Local Government Act 410/2015). Furthermore, the act stipulates that the auditors must audit the administration, accounting and financial statements for the respective accounting period. In addition, auditors are required to examine whether the information provided about the basis for central government transfers to local government is correct. Finally, the auditors must audit whether the internal control and risk management of the municipality and oversight of the local authority corporation have been properly arranged. Moreover, the auditor must state whether the members of the decision-making bodies and the senior local government officers for the relevant areas of responsibility of the decision-making bodies (parties liable to render accounts) can be discharged from liability (Local Government Act 410/2015). The Local Government Act also stipulates that municipalities must have an audit committee to arrange audits and assessments of administration and finances. The committee’s chairperson and deputy chairperson must be local councillors.

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Section 121 states the duties of the audit committee. They have a duty to assess the extent to which the operating and financial targets set by the local council have been achieved in the municipality and the local authority corporation and whether or not the activities are arranged in a cost-­ effective and appropriate manner. This fundamental performance-evaluation task is accomplished with a duty to assess the extent to which the finances were balanced in the accounting period and the adequacy of the current financial plan if the municipality’s balance sheet has an uncovered deficit. In addition, the Local Government Act (Section 121) stipulates that ‘the local authority audit committee shall draw up an assessment plan and submit to the local council an assessment report on each year, in which the assessment results shall be presented.’ These procedures complement the audit executed by professional audit firms and create a comprehensive audit system that includes both independent professional financial statement auditing and politically affected performance auditing. In the central government, the National Audit Office of Finland (NAOF) audits central government finances, monitors fiscal policy and oversees political party and election campaign funding. The roles and duties of the NAOF are laid down in the Constitution of Finland (731/1999). The NAOF audits the legality and productivity of government finances and compliance with the budget in accordance with Section 90 of the Finnish Constitution. It also audits the reliability of information provided to parliament about central government finances and the management thereof, as well as compliance with fiscal policy rules (NAOF, 2022). The NAOF performs its duties that are laid down in the Constitution through financial audits, compliance audits, performance audits and fiscal policy audits. The audit work covers the following: • The government and ministries • Government agencies • Off-budget funds • State enterprises and state-owned companies • Central government transfers and subsidies paid to municipalities, companies and other entities • Transfers of funds between Finland and the European communities

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The NAOF does not audit: • The finances of parliament • Funds under the responsibility of parliament • The Bank of Finland or the Financial Supervisory Authority • The Social Insurance Institution In its audits, the NAOF applies its internal audit guidelines, which are based on the International Standards of Supreme Audit Institutions (ISSAI) issued by the International Organisation of Supreme Audit Institutions (INTOSAI). The ISSAI auditing standards are based on the ISA. These are supplemented by separate manuals for compliance audits, performance audits and fiscal policy audits. The NAOF monitors fiscal policy, aiming to secure stable and sustainable public finances and transparent and clear fiscal policy rules. Pursuant to the Fiscal Policy Act (869/2012), the NAOF supervises the setting of and compliance with the rules that steer fiscal policy. Another task of the NAOF is to oversee election campaign and political party funding and receive and publish documents specified in the Act on Political Parties (10/1969) and the Act on a Candidate’s Election Funding (273/2009). The NAOF also checks that disclosers, such as registered political parties and their district and women’s organisations, as well as all candidates elected or appointed as alternate members, disclose the funding they have received according to the law (NAOF, 2022). Both in  local government and in central government, external audit institutions are accomplished at internal auditing. In practice, mainly bigger central government agencies have established an internal audit function. Local governments, mainly municipalities with over 10,000 inhabitants, have established an internal audit function by hiring internal auditors or by purchasing internal audit services from private audit firms (Rönkkö, 2019). The professional audit institutions explained above, together with transparent government reporting systems, mean that citizens and their representatives in political bodies are able to efficiently keep the administration accountable for their usage of budget money and performance. For a summary of the aspects of financial management, see Table 7.1.

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Table 7.1  Summarisation of the linkages between budget types, budget appropriations and accounting in the Finnish public sector (both local governments and the central government) Budget-type dimensions Timing basis Accrual-based Fixing of budget items (input– output dimension) Strategy-based obligatory

Issue-based in an evolving phase (subcategory of a strategy-based budget) Performance-based (output-based) obligatory Transparency

Auditing

Budgets

Type of budget-linked accounting

Modified accrual-based

Modified accrual accounting

Appropriations must be itemised to means in a way that the strategic goals can be achieved with the budget Appropriations must be itemised across sectors to meet the claims, for instance, of combating climate change and proceeding towards carbon neutrality Appropriations must be dimensioned in the budget so that the output targets can be achieved Budgets and annual reports must be published and available on the internet

Chart of accounts and cost centres organised in a way that enables appropriate follow up Chart of accounts and cost centres organised in a way that enables appropriate follow up

Chart of accounts and cost centres organised in a way that enables appropriate follow up Financial statements (in the local government sector, also consolidated financial statements) and budget statements must be published and available on the internet Professional and independent auditing, also performance auditing: all audit reports must be published and available on the internet

Conclusions and Summary It is crucial to note that public sector performance is only partly captured by financial figures and financial performance. That is why non-financial activity performance, accounting for outputs and outcomes, is important for public accountability. These matters are planned and reported using performance-based budget systems. Both the Finnish local governments

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and the central government have, since the 1990s, prepared performance-­ based budgets and budget out-turn statements that include reporting of the achieved fulfilment of the output and outcome goals. In the public sector, approved and authoritative budgets are the core area of public sector accounting and accountability (Budding et  al., 2015). The budget-­ based approach emerges from the authoritative budget and its execution, management and control. The budget needs budgetary-linked accounting. This accounting must follow the logic of the budget, especially regarding the allocation of incomes and expenditures to the budget (budget codes). This systematic policy is followed in Finnish public sector accounting. Both performance-based budgeting and accrual budgeting require good data quality (Khan, 2013; Schick, 2007). The Finnish public sector has constantly tried to develop performance statistics and data to fulfil the needs of performance-based budgeting. The following table illustrates the different aspects of budgeting and accounting that have been followed in Finland. When it comes to the overall similarities between the local and central government financial accounting approaches, they are very similar, as they are both based on accrual accounting instead of cash-based accounting. Both make use of the idea of performance-based budgeting. The differences between them emanate from the fact that local governments follow the Finnish general accounting law (Accounting Act), which exposes them to international accounting harmonisation, while the central government follows the accounting rules in the Budget Act and Budget Decree that are less exposed to the continuous developments in international accounting standards.

References Accounting Act (1336/1997). Act on Political Parties (10/1969). Act on a Candidate’s Election Funding (273/2009). Budding, T., Grossi, G., & Tagesson, T. (2015). Public sector accounting. Routledge. Chartered Public Finance Auditor Association. (2006). Good auditing practices in public administration. Edita Prima Oy. Fiscal Policy Act (869/2012). Johnsen, Å., Meklin, P., Oulasvirta, L., & Vakkuri, L. (2004). Governance structures and contracting out municipal auditing in Finland and Norway. Financial Accountability and Management, 20(4), 445–477.

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Khan, A. (2013). Accrual budgeting: Opportunities and challenges. In M. Canciano, T. Curristine, & M. Lazare (Eds.), Public financial management and its emerging architecture (pp. 339–359). International Monetary Fund. Korento, S., & Ylitalo, M-L. (2022). Kunnan ja Kuntayhtymän talousarvio- ja suunnitelma. [Budget and financial plan of a municipality and joint municipal authority]. Association of Finnish Municipalities. Local Government Act (410/2015). Manes Rossi, F., Brusca, I., & Condor, V. (2021). In the pursuit of harmonization: Comparing the audit systems of European local governments. Public Money and Management, 41(8), 604–614. Ministry of Economic Affairs and Employment of Finland. (2018). Yleisohje ympäristöasioiden kirjaamisesta ja esittämisestä kunnan ja kuntayhtymän tilinpäätöksessä. [Guidance on accounting and financial statement presentation of environmental issues in municipalities and joint municipal authorities]. Municipality Department of The Accounting Board. Ministry of Finance. (2019). Working group determining viewpoints on phenomenon-­ based budgeting (Ministry of Finance Publication No. 2019:9). National Audit Office of Finland. (2022). Subject areas in auditing. https://www. vtv.fi/en/audit-­and-­monitoring/. OECD. (2015). Recommendation of the Council on Budgetary Governance. https://www.oecd.org/gov/budgeting/Recommendation-­of-­the-­Council-­ on-­Budgetary-­Governance.pdf Oulasvirta, L. (2015). Public sector accounting and auditing in Finland. In I.  Brusca, E.  Caperchione, S.  Cohen, & F.  M. Rossi (Eds.), Public sector accounting and auditing in Europe: The challenge of harmonization (pp. 60–74). Palgrave Macmillan. Oulasvirta, L. (2019). Budgets and budgetary accounting. In P.  C. Lorson, S. Jorge, & E. Haustein (Eds.), European public sector accounting (pp. 95–116). Coimbra University Press. Paananen, M., Rönkkö, J., Zerni, M., & Hay, D. (2021). Determinants of audit report modifications in Finnish municipalities. Journal of Accounting and Public Policy, 40(3), e106777. Rönkkö, J. (2019). Sisäinen tarkastus: Tuloksellinen lisäarvon tuottaja vai paikkaansa hakeva tukitoiminto? [Internal audit: Effective added value producing unit or a supporting activity searching for its place?] (Publication No. 83). [Doctoral dissertation]. Tampere University. Schick, A. (2007). Performance budgeting and accrual budgeting: Decision rules or analytic tools? OECD Journal on Budgeting, 7(2), 109–138. State Annual Report 2021. http://urn.fi/URN:ISBN:978-­952-­383-­875-­8. State Budget Decree (1243/1992). The Constitution of Finland (731/1999).

CHAPTER 8

Performance Management in the Finnish Government: Reflections and Future Directions from the Perspectives of Hybridity and Sustainability Jarmo Vakkuri, Eija Vinnari, and Elina Vikstedt

Introduction What are the mechanisms and instruments through which limited economic and intellectual resources can be adjusted to the evolving, often seemingly unlimited, needs and expectations of society? How can public service logic and ethos be linked with business and civil society logics in delivering services for citizens? How can we combine and balance the financial, social and ecological aspects of sustainability in governing and managing public finances? In Finland, as in other countries, such questions are profoundly instrumental in understanding the role of performance management in the government. If the problems are not solved, there is a high risk of ecological destruction, societal unrest, service J. Vakkuri (*) • E. Vinnari • E. Vikstedt Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_8

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delivery and policy failures, negative impacts on the Finnish and Nordic welfare system model, as well as the deterioration of the public finance system in the long run. The solutions, as limited or only satisficing as they may be, contribute to the long-term survival of Finnish society and its public administration systems (cf. Vakkuri, 2022). In line with developments in other OECD countries, variants of economic rationalism have transformed public financial management systems in Finland since the mid-1980s (Hood & Dixon, 2015). There has been a long sequence of performance management reforms, including performance-­ based budgeting, performance measurement, financial accounting, cost-accounting, accountability and auditing reforms (Meklin, 2009). Furthermore, several reforms have attempted to re-organise the relationships between government, market mechanisms and civic activities to contribute to the performance of public service delivery systems. These reforms include contracting out, voucher systems, purchaser–provider models and other forms of quasi-market arrangements that have created hybrid forms of governance and organisations and introduced new mixes of value creation for public service delivery. However, such hybridisation has also created new problems with measurements, accountabilities and governance (Johanson & Vakkuri, 2017; Vakkuri & Johanson, 2020). This chapter deals with performance management in public sector activities. Our aim is to introduce the basic elements of performance management systems in Finnish public administration and discuss their fundamental assumptions and limitations. Although our focus is on Finnish public administration, our illustrative case connects performance management problems in the Finnish context with influences and pressures from global institutions such as the United Nations (UN). More particularly, we demonstrate the problematics related to hybridity and the governance of sustainability by scrutinising the implementation of the 2030 Agenda for Sustainable Development (Agenda 2030) and the Sustainable Development Goals (SDGs) in Finland.

Public-Sector Performance Management Systems in Finland Performance management systems can be conceptualised in several ways. In the Finnish context, they are largely understood as an instrument for improving the economy, efficiency and effectiveness (equity) of public

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policies, programmes, organisations and services. Performance management is assumed to contribute to the rationality of decision-making (Nielsen & Ejler, 2008), not only through measurement instruments and monitoring devices but also by including the provision of abundant performance information to the relevant administrative and political bodies that may utilise the information for performance improvements (Poister, 2003; van Helden et al., 2012). The question of how to manage performance is relevant in Finnish central, regional and local governments. In terms of public service provision, the Finnish system has long been a two-tier system with central and local governments as important and influential levels of action and actors. As a consequence of the recent comprehensive reform, major parts of the social and healthcare systems have been organised, effective as of the beginning of 2023, into a new level of regional government that will be responsible for social and healthcare and rescue services. In terms of public finances, this will in fact significantly increase the role of central government, as the new regions (wellbeing services counties, hyvinvointialue in Finnish) will be financed by allocations from the central government (Government proposal 241/2020; Act 611/2021). Accordingly, this will have an important impact on the system of performance reporting, inter-­ sectoral accountabilities and, ultimately, on the entire performance management system (on public financial management, see Chap. 7). In Finland, the central government has an important role in regulating service provision through legislation and grant systems, but has a more limited role in providing public services. The core functions of the central government include the police force, national defence, national policy sectors, such as macro-economic policy, society-wide technology and innovation policies, as well as the co-ordination and national regulation of sustainable development policies. On the other hand, the Finnish public administration system grants an extensive degree of autonomy to local government. The municipalities have an important role in public service delivery through their own local tax systems, service fees and lump-sum grants from the central government. Municipalities are responsible for providing, for instance, educational services, day-care services for children, important parts of the public infrastructure and local municipal and urban development. The governance of performance management systems is based on the traditional, practice-driven idea of performance management or public financial management as a cycle (Johnsen et al., 2012; Jones & Pendlebury,

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2010). The cycle, also referred to as ‘plan–implementation–control’, starts from the process of budgeting for public sector activities, the objective of which is to define and prioritise resource allocations between distinct ideologies and values in an open, democratic society. Budgeting serves several important purposes in achieving political, fiscal, economic, re-distributive, managerial and accountability goals (Argento et al., 2020). Performance management reforms of recent decades have introduced different schemes of performance-based budgeting (PBB), emphasising budgeting for ‘outputs’ and ‘results’ instead of ‘inputs’ and ‘resources’ (cf. Grossi et  al., 2018). The second stage is ‘implementation’, which manifests in the various financial accounting and book-keeping systems of central and local governments. Again, performance management reforms have introduced, for instance, accrual accounting, consolidation and other important schemes for financial monitoring. The final stage is ‘control’, where different audit and evaluation systems aim to provide an account of what has happened and to what extent and how the original objectives were achieved during the service delivery process. New audit and evaluation systems have been developed in the Finnish public administration to better demonstrate multiple accountabilities and to connect audit and evaluation with performance through performance audits and policy evaluations of different types (Johnsen et al., 2019). As a result of the need to make government agencies accountable through measurements and evaluations, the number of performance measurement systems, audit systems and programme evaluation practices has increased exponentially. Numerous attempts have been made to standardise performance conceptualisations and the respective systems of performance measurement (Meklin, 2009; Ministry of Finance, 2006). For such a system to work, performance management includes an assumption of ‘performance’ itself. One such standardisation attempt that is also widely acknowledged in other OECD countries is the three E’s model (Bouckaert & Halligan, 2008). In that framework, ‘economy’ refers to financial parsimony and the cost-efficiency of public service delivery with the well-known phrase ‘doing more with less’. ‘Efficiency’ implies the optimality of input–output relationships in service organisations that may be found with respect to given standards, other organisations, peers or benchmarks. Finally, ‘effectiveness’ indicates the value of the public service in terms of the extent to which public agencies and policies have achieved their objectives, or the extent to which policies have resulted in expected and unexpected, intended and unintended, consequences.

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Performance Management and Society-Wide Policy Problems: The Perspectives of Hybridity and Sustainability While it is important to recognise that the intelligible design and use of performance management systems have always been important for public administration, it is also the case that recent decades of public sector reforms have increased the relevance of performance management (Johanson & Vakkuri, 2017). Therefore, performance management is about both timeless choices for making the government’s ends meet and a complicated assemblage of reforms and reform talks designed to improve public sector performance (Brunsson, 2006). One important critical point concerning the Finnish public sector system has addressed the fundamental purpose of performance management systems. In the late 1980s, the important impetus for performance management was to economise government activities from within by emphasising internal chains of accountability between ministries and agencies, as well as between municipal councils and municipal management. In fact, in this respect, performance management has become more strategic in its orientation and more attuned to designing systems that, at least in principle, enable performance improvements (Salminen et al., 2021). However, performance management should be able to cope with balancing vertical and lateral information flows and accountabilities (Hopwood, 1996). This is because complex policy problems do not follow sectoral or organisational mandates within government, individual government agencies or in wider society in which individual concerns are linked to specific policy problems and where the respective accountabilities are easily demonstrated through the performance of the individual policies (Mazzucato, 2021). For instance, combating climate crises and biodiversity loss, alleviating social exclusion or developing liveable and democratic cities are highly collaborative exercises between public policies and agencies, private businesses, economic institutions and civic society. Accordingly, performance management systems face cross-sectoral and multi-lateral problems in two forms: (1) how to organise performance management systems to facilitate better co-ordination within government (between ministries, between central, regional and local government); and (2) how to develop performance management to better acknowledge the interaction and interfaces between government and other parts of society

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(public, private and civil society; the hybridity problem) (Thacher & Rein, 2004). The hybridity problem in public administration has been addressed in the recent literature by conceptualising it as institutional interplay and interactions among public, private and civil society via distinct modes of ownership, parallel but often competing and even conflictual institutional logics, diverse funding bases and various forms of social and institutional control (e.g. Grossi et  al., 2021; Vakkuri et  al., 2021). With respect to hybridity, Vakkuri et al. (2021) observed two limitations in current performance management systems (cf. Battilana & Lee, 2014). First, current performance management systems are not sophisticated enough to trace performances that are emblematic of distinct (as regards sustainability, often contrasting and conflictual) value-creation logics simultaneously (Vakkuri & Johanson, 2020). Furthermore, while the generation of societal impacts requires interventions by government organisations at the micro level, the realisation of those outcomes at the societal macro level is highly contingent upon the contributions and impacts of private business firms as well as civic initiatives and activities. Accordingly, the measurement of effectiveness remains difficult with insufficient understanding of the interactions among public, private and civic society in contributing to societal outcomes. Sustainability presents another set of challenges for performance management. First, the concept can be defined from two fundamentally different viewpoints (Fig. 8.1). The ‘common view’ of sustainable development is often visually depicted as the three distinct circles of society, economy

Fig. 8.1  Weak sustainability (left) and strong sustainability (right) (adapted from Giddings et al., 2002, pp. 189, 192)

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and the environment (Giddings et al., 2002; see left side of Fig. 8.1). This depiction is called ‘weak’ sustainability, as it is founded on an anthropocentric worldview that over-emphasises the significance of society and the economy at the expense of the environment (Lozano, 2008; Mebratu, 1998). In contrast, the ‘strong’ view of sustainability, which is underpinned by an eco-centric worldview, emphasises that the economy is merely a subsystem of society and that both systems are embedded in, and dependent on, the surrounding natural systems (Giddings et al., 2002; see right-hand side of Fig. 8.1). Each view strives towards a different vision of the future, with different methods, and this is difficult to accommodate within performance management systems that try to steer actors towards a shared goal. A related complication is that sustainability is a dynamic notion associated with the values of a particular collective at a particular point in time (Meadowcroft, 2007). Such views and values differ between government ministries, between national, regional and local governments, as well as between public, private and third-sector actors, thus demonstrating the problems of multi-laterality and cross-sectorality (see also Chap. 17). A challenge that applies to both hybridity and sustainability is that performance management models include a special assumption concerning the accounting entity that is fairly constrained in tracing the cross-sectoral and multi-lateral impacts and performances in current and future policy systems (Hines, 1988; Hopwood, 1996; Johnsen et al., 2012). They are based on the primacy of organisational reasoning in which the activities of those being measured are assessed by the assumption that the rationality of a system may be examined by summing ‘local’ rationalities (i.e. those of individual public agencies) within a larger whole (Ministry of Finance, 2006). This assumption reflects a sequential and linear process of evaluating complicated societal activities with interactions between different actors within government and within the wider society (Vakkuri & Johanson, 2020). Performance measurement focuses on the mechanisms through which organisation-level outputs are aggregated into national-­ level outputs. Such an assumption is inapt at both addressing a plethora of actor interdependencies and understanding the mechanisms of hybridity and sustainability in society-level policymaking (Hodges, 2012).

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Governing the Performance of Sustainability Policies: The Case of Agenda 2030 The most common view of sustainable development is probably the one offered by the Brundtland Commission, which, in its report Our Common Future, defined it as development that ‘meets the needs of the present generation without compromising the ability of future generations to fulfill their own needs’ (World Commission on Environment and Development, 1987, section 3 § 27). The publication of the report has been followed by worldwide commitments co-ordinated by the UN to foster sustainable development. The UN’s Millennium Development Goals were a set of eight main targets to be met by 2015, but when the sought-after development was not achieved, the UN member states committed to a new programme, Agenda 2030, which aims to ‘promote prosperity while protecting the planet’ (United Nations General Assembly, 2015). The global programme includes 17 goals and 169 more specific sub-targets for these goals (see UN, 2023). The progress of Agenda 2030 is monitored at the international level by the UN, but nation-states have the primary responsibility for implementing Agenda 2030 and governing and monitoring their own progress towards sustainable development. Globally, Finland has been one of the frontrunners in the implementation of Agenda 2030. In the UN Sustainable Development Solutions Network’s rankings, Finland has been placed among the top three for several years and was the first country in the world to conduct a comprehensive evaluation of the national implementation of Agenda 2030. The government has the primary responsibility for implementing Agenda 2030 in Finland through its regular management system, and the parliament oversees the implementation. Finland has established the General Secretariat on Sustainable Development in the Finnish Prime Minister’s Office, which supports the government’s work towards Agenda 2030 and chairs the National Monitoring Network focused on monitoring and assessing the state of the implementation of Agenda 2030. The Finnish National Commission on Sustainable Development, chaired by the prime minister, oversees and accelerates the implementation of Agenda 2030 in Finland. Although the government has the primary responsibility for its implementation, as a policy programme, Agenda 2030 is multi-lateral and cross-sectoral. Sustainable development has been a cross-cutting theme in Prime Minister Sanna Marin’s Government Programme (Government of Finland,

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2019). The programme is supported by the ‘Government Report on the Implementation of Agenda 2030: Towards a Carbon-Neutral Welfare Society’. In addition, the Finnish National Commission on Sustainable Development has drafted the strategy ‘Society’s Commitment to Sustainable Development: The Finland We Want by 2050’ and published the 2030 Agenda Roadmap, which has further defined six strategic focus areas in the implementation of Agenda 2030. The government branches have integrated national targets into their own sectoral strategies. The performance management of the programme has a primarily strategic and developmental focus. In addition to international UN indicators, progress is monitored with national-level indicators based on the Finnish National Commission on Sustainable Development and the government’s strategy. Ministries and public sector organisations measure their own progress according to the strategic targets they have set. Since 2019, performance has been reported through the Voluntary National Review compiled by the General Secretariat on Sustainable Development to the UN once during every four-year electoral term. In addition, progress is reported annually in ‘State of Sustainable Development’ reports by the National Monitoring Network, which tracks progress through national strategic indicator baskets. Due to the strong linkage with the government programme, progress is also reported as part of the Government Annual Report and the monitoring of the government programme. In addition, the state treasury recommends that all public sector organisations compile sustainability reports annually in line with Agenda 2030 and the SDGs. The following reflections are based on an applied research project on the implementation of Agenda 2030 in Finland, in which the authors were involved (Haila et  al., 2023). The first performance management challenge we outline through the case of Agenda 2030 is the challenge of organising performance management systems that would facilitate co-­ ordination within the government. The OECD has published recommendations regarding policy coherence for sustainable development. Implementing SDGs in an integrated and consistent manner by taking economic, social and ecological goals into account in a balanced way is one of the biggest challenges for the implementation of Agenda 2030. In multi-lateral programmes such as Agenda 2030, performance management in different branches of government should be founded on the common policies and principles of the government. Although attempts at multi-lateral and systemic approaches to performance management have been made, the rationality of the system is still

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mainly examined as the sum of local rationales through the budgets, accounts and reports of sectoral ministries and the organisations they govern. Each government branch has relatively autonomously chosen the focus points in the programme based on their responsibilities and prioritised the goals according to their sectoral rationales. The views of different actors may present different ends on the continuum, from the weak to the strong view of sustainability. This leads to diverging interpretations of Agenda 2030 as a performance object within government, where the underlying worldviews and visions of the future may vary. Entity-based performance management, where heterogenous organisational-level outputs are aggregated into national-level outputs, leaves the hybridity of the goals and the interactions between different actors largely hidden, and thus the comprehensive effectiveness of Finnish sustainability policies fairly ambiguous. Disconnections and unaddressed trade-offs may exist between the performance goals of different government branches and levels, as well as in between the different stages of the performance cycle within the government branches in the form of disconnections between strategic planning, performance measurement and budgeting practices. The second challenge we outline through the case of Agenda 2030 is how to develop performance management to better acknowledge the interaction and interfaces between government and other parts of society in the implementation of Agenda 2030. Relevant performance goals are only met if society, including citizens and non-governmental organisations, the private sector, scientific research and public administration, all take part in the work towards achieving the SDGs. This should be noted in all parts of the performance cycle, from planning and budgeting to measurement and reporting. Most performance measures used within government are based on input, output and process measures focused on actions taken by the government bodies, while societal outcome and impact measures remain scarce. Development and evaluation of the effectiveness and societal impacts of individual government branches may therefore be challenging. Multi-lateral strategies and national-level monitoring baskets by the Finnish National Commission on Sustainable Development, with thematic areas such as ‘resource-wise economy and carbon-neutral society’ or ‘social inequality’, seek to cross organisational and sectoral barriers and engage different actors in common performance goals, focusing on the state of sustainable development at the national level. The contributions of the government to these strategic goals are difficult to measure because performance metrics, such as the total carbon

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emissions of Finland, dead wood in forests and high nature value farmland, or life satisfaction among young Finnish adults, are a sum of the actions of various societal actors within and outside of the government.

Conclusions The objective of this chapter was to discuss the assumptions and limitations of performance management systems in the Finnish government. We have introduced an empirical account of the institutional structures, processes and levels of performance management. Furthermore, we have provided theoretical insights into the most relevant problems of performance management from the perspectives of hybridity and sustainability. To that end, the chapter has provided an illustrative example concerning cross-­ lateral and multi-sectoral problems of performance management in the context of the implementation of Agenda 2030 in Finland. Perceiving the performance of the system as a sum of its parts, for instance, through the performance of organisational units, can be misleading because the societal and organisational levels remain disconnected. On the one hand, we have macro-scale measures, such as Finland’s total carbon emissions, from which the public sector’s impact is difficult to clearly untangle. On the other hand, organisational-level measures based on convenient, traditional and often heterogeneous metrics, when aggregated into the system level, do not allow for an analysis of the interrelations and trade-offs between different interventions, leaving the value of public actions partially hidden. Performance management concerns timeless choices for making the government’s ends meet and for making sense of the evolving politico-­ administrative environment. Moreover, public sector performance management is a product of a complicated assemblage of reforms designed to improve public sector value, not only in Finland but also in the wider context of OECD countries. As in any procedure relating to government system design, the functionality and ‘performance’ of performance management systems are contingent upon the basic purpose of the system, which may vary over time. While in the late 1980s the important purpose of Finnish performance management systems was to economise government activities from within, the performance systems of today (and the future) face more profound cross-sectoral and multi-lateral problems of valuing, measuring and controlling public sector performance. We have discussed two versions of this problem: (1) how to organise performance management systems to facilitate better co-ordination within government

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and (2) how to develop performance management to better acknowledge the interaction and interfaces between government and other parts of society; that is, the hybridity problem. Our illustrative case, the implementation of the Agenda 2030 policy, is an interesting manifestation of these problems. The views, values and calculative practices associated with the implementation of sustainability policies differ among government ministries, between central, regional and local governments, as well as between public, private and third-sector actors. Our chapter has explored the problems of the multi-laterality and cross-sectorality of performance management within both government and wider society.

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Meadowcroft, J. (2007). Who is in charge here? Governance for sustainable development in a complex world. In J.  Newig, J.  P. Voss, & J.  Monstadt (Eds.), Governance for sustainable development (pp. 107–122). Routledge. Mebratu, D. (1998). Sustainability and sustainable development: Historical and conceptual review. Environmental Impact Assessment Review, 18(6), 493–520. https://doi.org/10.1016/S0195-­9255(98)00019-­5 Meklin, P. (2009). Muuttuuko mikään? Tuloksellisuuden käsitteen monitulkintaisuus julkishallinnossa [Will anything change? The ambiguity of the concept of performance in public administration]. In J. Vakkuri (Ed.), Paras mahdollinen julkishallinto? Tehokkuuden monet tulkinnat (pp.  31–50). Gaudeamus/ Helsinki University Press. Ministry of Finance. (2006). Handbook on performance management: Governance and accountability. Edita. Nielsen, S. B., & Ejler, N. (2008). Improving performance? Exploring the complementarities between evaluation and performance management. Evaluation, 14(2), 171–192. https://doi.org/10.1177/13563890070875 Poister, T. (2003). Measuring performance in public and nonprofit organizations. Jossey-Bass. Salminen V., Halme K., Järvelin, A-M., Kettinen, J., Uusikylä, P., Lintinen, U., Stenvall, J., Vakkuri, J., & Johanson, J-E. (2021). sValtionhallinnon tulosohjausmallin arviointi [Comprehensive evaluation of the performance management system of the Finnish state government] (Prime Minister’s Office Publication Series of the Government’s Analysis, Assessment and Research Activities No. 2021:33). Thacher, D., & Rein, M. (2004). Managing value conflict in public policy. Governance, 17(4), 457–486. https://doi.org/10.1111/j.0952-­1895. 2004.00254.x United Nations General Assembly. (2015). Transforming our world: The 2030 Agenda for Sustainable Development. Retrieved January 26, 2023, from https://sdgs.un.org/2030agenda United Nations. (2023). Sustainable development goals. Retrieved January 26, 2023, from https://sdgs.un.org/goals Vakkuri, J. (2022). PMM and beyond: Reflections on the paper ‘New developments in institutional research on performance measurement and management in the public sector.’ Journal of Public Budgeting, Accounting & Financial Management. https://www.emerald.com/insight/content/doi/10.1108/ JPBAFM-­12-­2021-­0168/full/html Vakkuri, J., & Johanson, J.-E. (Eds.). (2020). Hybrid governance, organisations and society: Value creation perspectives. Routledge. Vakkuri, J., Johanson, J.-E., & Rajala, T. (2021). A shotgun marriage? Performance management in the hybridized government. In M. Holzer & A. Ballard (Eds.), The public productivity and performance handbook (3rd ed., pp.  202–225). Routledge.

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CHAPTER 9

The Finnish Constitutional Doctrine on Regional Self-Government Anu Mutanen

Introduction Finland has just implemented a long-prepared comprehensive reform of its national healthcare and social welfare system after a decade-long legislative process. This reform can be considered the most significant modification of the Finnish administrative system. This meant the organisation of a novel regional administrative level with a constitutionally safeguarded right to self-governance. The preparation for the reform took a long time, especially because the necessary legislation was found unconstitutional on several occasions in the Constitutional Law Committee of the Finnish parliament. During the process, a variety of administrative models for organising healthcare and social welfare services were presented. The chapter at hand examines the development of regional self-­ government in Finland from the perspective of the constitutional legal

A. Mutanen (*) Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_9

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doctrine. The focus is on what the changes to the healthcare and social welfare reform meant to Finnish regional self-governance. The study looks at the background, interpretation and need for amendment of the constitutional regulation on regional self-government. On this basis, the study aims to pinpoint the key elements of the Finnish constitutional doctrine on regional self-government. The chosen topic is tackled with the help of the following research questions (RQs): • How is regional self-government regulated and interpreted in the Finnish Constitution? • Which constitutional problems were connected to the different administrative models of organising healthcare and social welfare services in Finland? • What is the content of the constitutional doctrine on Finnish regional self-government and is there a need for adjustments to the constitutional protection of regional self-government? These questions are answered with a doctrinal study of law; that is, the systematisation of the applicable legal sources on regional self-governance. The study includes an analysis of constitutional regulation and its background reasoning, complemented by interpretations provided in connection to developing Finnish regional self-governance. Additional perspectives on the meaning and significance of regional self-governance are found in the relevant literature on jurisprudence and studies on public administration. The Finnish perspective is contextualised with some comparative aspects, focusing on the constitutional protection of regional self-­ government in other European, especially Nordic, countries.

The Constitutional Regulation of Regional Self-­Government in Finland The Context and Development of Constitutional Provisions on Self-Governance The manifestations of self-government have varied over time and from state to state. Self-governing units are created when states distribute their powers and responsibilities to regions, local entities or organisations. The

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concept of self-government can refer, for example, to the independent status of a region from another territory. However, self-governance is not necessarily territorial. For example, a cultural or religious community can have self-governing status (Suksi, 2011). The foundations of self-governing systems are typically laid down at the level of national constitutions. The constitutions can stipulate the procedures for forming autonomous units, their powers, institutions and finances, as well as their relationship with the state. In addition, there may be relevant provisions in other legislation. Among others, the Constitutions of Belgium, Spain, Italy and Portugal have basic provisions on self-­ governing units. Among the Nordic countries, only in the Swedish Instrument of Government (Regeringsform, 1974:152, 2011:109) do counties fall under the constitutional protection of local self-government (Article 1(1) and Chapter 14). Overall, the models and rules of self-­ government vary significantly among European countries. No general model for the constitutional protection of self-government exists (see Loughlin et al., 2011; Mäkinen, 2017; Niemivuo, 2022). In Finland, there are currently three levels of governance: central, regional and local. At the local level, municipalities have strong self-­ governing status (see Chap. 6), which dates to the 1860s’ legislation. The need for the self-governance of areas larger than a municipality arose after the municipal laws of 1865 and 1873 were enacted. However, before the healthcare and social welfare reform of 2023, the only autonomous regional entity was the Åland Islands, which has enjoyed self-governing powers since 1921. In Finland, the foundations for administrative structures and self-­ government are laid down in the Constitution. This constitutional basis is further regulated with ordinary legislation. The Constitution of Finland (Suomen perustuslaki, 731/1999, also the ‘Constitution’ or ‘Constitution of 2000’ in the following) includes five self-governance frameworks: the self-governance of municipalities (Section 121(1–3)), administrative areas larger than a municipality (Section 121(4)), universities (Section 123), and the Åland Islands (Section 120) and the cultural self-governance of the Sami (Section 121(4)). The current constitutional provisions on self-government were adopted from the previous Constitution (Suomen Hallitusmuoto, the Constitution Act of Finland, 94/1919, also the ‘Constitution of 1919’ or ‘Constitution Act’ in the following). Regarding regional self-governance, its Section 51(1) stated that the administration of a province was to be headed by a

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governor. In addition, Section 51(2) specified that the manner and extent of the application of citizens’ self-government to administrative districts larger than the municipalities was to be prescribed by law. This provision was taken from the constitutional proposal of 1906. Influences were also sought from Germany and England. In addition, the Constitution Act was affected by different political theories and trends, which, on the one hand, defended a state-centred administration and, on the other hand, supported a decentralised system based on citizens’ self-governance. This amounted to conflicting constitutional provisions for the intermediate-­ level administration (Tiihonen, 1986; see Sjöblom, 2011). Regional Self-Government in the Constitution of 2000 When adopting the current Constitution, a new concept of self-­ government, regional self-government, was brought to the level of the Constitution, which is referred to in the title of Section 121 of the Constitution (Municipal and other regional self-government). Therefore, regional self-government protected by the Constitution can be seen to cover municipal self-government, self-government in administrative areas larger than a municipality and self-government of the Sami. Nevertheless, the organisation of the regional administration in the Constitution is primarily related to Section 121(4), according to which provisions on self-­ government in administrative areas larger than a municipality are laid down by an act. The preparatory works of the new Constitution determine that the provision provides the opportunity to organise administrative areas larger than a municipality in accordance with the principles of self-government (Government proposal 1/1998). However, what is meant by this kind of self-governance remains undefined. Overall, Section 121(4) of the Constitution is very general in nature and lacks a well-established line of interpretation. In fact, the control of the constitutionality of the legislation regarding the healthcare and social welfare reform signified a novel interpretation of the provision. Other forms of self-government, such as municipal self-governance, are regulated more precisely in the Constitution and have solid constitutional content. Another notable aspect is that the constitutional language speaks of the self-governance of areas larger than a municipality. This reflects the strong connection between regional self-governance and the autonomy of municipalities.

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The Development of the Constitutional Doctrine of Regional Self-Governance in Connection to Finnish Administrative Reforms The Doctrine of Regional Self-Governance Under the Constitution Act Before the 1990s, Finnish jurisprudence relied on the idea of narrow self-­ government in accordance with a strong state-centred administrative system. The relevant research usually dealt only with municipal self-government, and its characteristics were not differentiated from higher-level self-government (see Tiihonen, 1986). Finnish municipalities and the joint authorities have also been of special importance in terms of regional activity due to the lack of directly elected representative bodies at the regional level (Sjöblom, 2011). As a legal concept, self-government, according to Section 51(2) of the Constitution Act, meant the independent and democratic self-government of citizens separate from the state administration. However, the requirement for independence from the state administration was a problematic concept. Regarding democracy, it was essential that the members of the self-governing unit appoint the decision-making bodies and that the administration was based on the dominant position of trustees. Other hallmarks of self-government were that the entity in question had its own tasks, institutions and finances, including taxation powers (Tiihonen, 1986). Section 51(2) of the Constitution Act limited self-government to administrative matters, leaving out legislative and judicial powers. However, municipalities were given the power to issue lower-level norms without the support of a specific constitutional provision. Thus, it can be speculated that a similar rule-making power could have belonged to higher-level self-government as well (Tiihonen, 1986). Despite the possibilities of arranging far-reaching regional self-governance provided by the Constitution, only a single-level system of self-government formed by the municipalities was developed under the Constitution Act. The only exception was the self-governance of the Åland Islands, where both provincial and municipal levels of self-government operated. The development of the regional administration in Finland has been linked to municipal structure and co-operation. When there have not been any higher-level self-governing organisations, it has been necessary to develop co-operation between municipalities to handle regional

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administrative tasks. This kind of co-operation had already developed from the 1920s onwards. In the Municipal Act (maalaiskuntain kunnallislaki, 108/1917, as amended with Act 152/1932), the voluntary co-­ operation between municipalities was seen to correspond better to the ideal of self-governance than to provincial administration. In the 1960s and 1970s, the discussion revolved around the size of the municipality capable of providing adequate services. Municipal structure became topical again in the late 1980s, but reforms were not implemented. Arrangements that relieve the burdens of municipalities have also been central to the subsequent regionalisation. In Finland, municipalities have traditionally been responsible for tasks that elsewhere have been the responsibility of provinces, for example (see Swedish Government Official Reports, 1999:116). Until recently, Finnish regionalisation has not meant the development of regional self-government, but rather a strengthening of the state’s regional administration. For example, in reforming the state’s regional administration legislation in 1997, a new regional authority, the Employment and Economic Development Centre (työvoima- ja elinkeinokeskus), was established. This reform did not include any problems in terms of Sections 50 and 51 of the Constitution Act (Statement of the Constitutional Law Committee 37/1996). Moreover, regional development was partly strengthened by Finland’s membership in the EU in 1995. It resulted in arranging novel regional development authorities, regional councils (maakunnan liitto), which gained increasing importance during the 1990s (Niemivuo, 2022; Ryynänen, 2004). The reform of the municipal structure and the regional developments that started in the late 1990s were, in part, reflections of market-­emulating reforms brought about by the ideas of new public management (see Niemelä, 2008). Overall, there was a shift from ‘administration’ to ‘governance’, which describes novel methods of co-ordination that are utilised in various co-operative relationships (Bourgon, 2007). Elsewhere in Europe, the crises of the nation state and growing interest in participatory democracy in the 1970s and 1980s had already catalysed reforms towards decentralised governance (see Loughlin et al., 2011). The Doctrine of Regional Self-Governance Under the Constitution of 2000 In the era of the new Constitution, strong local self-governance has still been raised as a central feature of Finnish administration in international

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comparisons. While in Finland, the government levels have traditionally been the state and the municipalities, in several other countries, some level of regional autonomy has existed between them (see Loughlin et al., 2011). Under the Constitution of 2000, the development of the regional administration continued, especially in the form of various regional experiments. In a regional project from 2002 to 2012, the goal was to gain experience on how regional co-operation could secure public services and develop the regional community structure. The Constitutional Law Committee considered that the relatively open possibility of transferring the tasks and decision-making power of municipalities to a regional institution was, as such, problematic in terms of municipal democracy and self-government protected by the Constitution. Nevertheless, it was deemed constitutionally unproblematic in this case because of the nature of the arrangement as an experiment and not as a permanent solution. The government’s power to define new experimental areas was deemed too broad and had to be adjusted. Section 121(4) of the Constitution was not brought up in the evaluation (Statement of the Constitutional Law Committee 11/2002 and 11a/2002). Instead, a direct application of regional self-government referred to in Section 121(4) was the Kainuu experiment carried out between 2005 and 2012. In it, several tasks of municipalities were transferred to the regional level. The Constitutional Law Committee considered that the scope of tasks transferred from the municipalities to the Kainuu region was remarkably broad. It found that such a transfer significantly affected the administration of the municipalities in the area and narrowed the decision-making power of democratic institutions. Thus, the experiment was deemed problematic from the perspective of municipal self-government. On the other hand, the Committee considered that the experiment had strong grounds in the fundamental rights system. It brought up the exceptionally difficult economic and social situation of the Kainuu region and the effort to offer its residents equal opportunities to access services. The Committee emphasised that it was important that the region’s decision-making power be exercised by a decision-making body elected by its residents in direct elections (Statement of the Constitutional Law Committee 65/2002). The Kainuu experiment brought with it the first practical observations on regional self-governance referred to in Section 121(4) of the Constitution. In the parliamentary documents, the confrontation between the municipalities and the region was emphasised. The views in the legal literature were conflicting: while some considered that the experiment

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tested the limits of municipal democracy (Harjula & Prättälä, 2015), others considered that the self-governance of municipalities remained intact (Ryynänen, 2004). Within studies of public administration, the experiment was evaluated somewhat more positively from the perspective of local democracy (see Jäntti et al., 2010). At the beginning of 2010, a comprehensive national regional administration reform came into effect. The state’s regional administration was assembled into two new authorities: the Regional State Administrative Agencies (aluehallintovirasto) and Centres for Economic Development, Transport and the Environment (elinkeino-, liikenne- ja ympäristökeskus). They took over the duties of the former counties (lääni) and constituted the regional level of deconcentrated state administration. The Constitutional Law Committee considered that the government’s decision-­making power to oblige municipalities to start negotiations on co-operation was not in conflict with municipal self-government. It also brought up the need to protect fundamental rights and saw that the regional division that best fulfilled linguistic fundamental rights had to be chosen (Statement of the Constitutional Law Committee 21/2009). Within the Finnish legal literature, it has been stated that administrative areas larger than a municipality meant by Section 121(4) of the Constitution could be almost anything: counties, self-governing areas, co-operative areas, regional government bodies or, for example, administrative areas performing a specific task (Mäenpää, 2012b). However, it has been viewed that the provision was transferred from the old to the new Constitution without a plan for enacting legislation on the matter (Ryynänen, 2004). Moreover, there have been conflicting views on the level of protection the Constitution provides for regional self-governance and whether it could be regulated by law in a manner similar to that for municipal government (Saraviita, 2011; Suksi, 2002). Overall, despite the opportunities provided by the Constitution and the development of the regional administration, the twenty-first century did not witness a full and permanent application of Section 121(4) of the Constitution before the healthcare and social welfare reform.

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The Construction of Regional Self-Government within the Healthcare and Social Welfare Reform Models Based on the Co-Operation of Municipalities The most significant step in the development of Finnish regional self-­ governance is connected to the healthcare and social welfare reform. The core of this reform has been the transfer of healthcare and social welfare tasks from municipalities to the regional level. The reform is very extensive in nature and includes the building of a new level of regional self-­ government. It is a long-prepared reform that included many stages with different administrative models for organising public services. The preparation for the reform started in 2012 based on the government programme of 2011. A government proposal was issued in 2014, according to which the healthcare and social welfare services would be organised on a two-level model of joint municipal authority (kuntayhtymä). It was suggested that Finland would be divided into five healthcare and social welfare regions (sote-alue), where the joint municipal authority would have responsibility for organising the healthcare and social welfare services of each region. Public services could have been supplemented with private services, and the region should not have had its own service production. The municipalities would have financed the operation of the regions with a payment based on the number of inhabitants. This signified pressure to increase the municipal tax rate (Government proposal 324/2014). The Constitutional Law Committee assessed that the proposed legislation did not adequately implement the democratic rule in accordance with Sections 2, 14 and 121 of the Constitution. The joint municipal authority would have become exceptionally large, and most municipalities and their residents would have had very little influence. In addition, the transfer of a significant part of the municipal budget to the decision-making power of the joint municipal authority, as well as the pressure to increase municipal taxes, were deemed problematic from the point of view of municipal self-­ governance. Moreover, the effects on municipalities’ right to tax conflicted with the fundamental right to equality stipulated in Section 6(1) of the Constitution. Overall, the bills in question could not have been processed in the ordinary legislative order without significant material changes (Statement of the Constitutional Law Committee 67/2014).

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The Constitutional Law Committee suggested that a one-level joint municipal authority model would be a constitutionally preferable way of organising the services in question. Another alternative would be a total transfer of healthcare and social welfare tasks from the municipalities to the level of regional self-governance based on Section 121(4) of the Constitution (Statement of the Constitutional Law Committee 67/2014). On this basis, the Social Affairs and Health Committee of Parliament proposed a one-level joint municipal authority model. Nevertheless, the Constitutional Law Committee still saw problems with the financial aspects of the model and with the lack of an institution elected through direct elections (Statement of the Constitutional Law Committee 75/2014). Finally, the matter lapsed in the spring of 2015 due to parliamentary elections. Early on, critical evaluations by scholars of the models based on the co-­ operation of municipalities were present. Within the public administration scholarship, there have been calls for a stronger emphasis on institutional change within the reform. This points towards a slow reform process, where the starting point was in old structures and in the similar organisation of the services across the country without any recognition of regional differences (Luukkonen, 2018). In the field of jurisprudence, it has been pointed out that the requirements of municipal democracy would have formed a substantial restriction on building the healthcare and social welfare regions. The expansion of mandatory co-operation would lead to a deepening of the democratic deficit, a weakening of local democracy and, presumably, an increase in bureaucracy (Mäenpää, 2012a; see Suksi, 2014). The construction of regional self-governance has been viewed as a preferable option that would not lead to a new, complex administrative model (Pihlajaniemi, 2012). Overall, it has been noted that regional self-governance does not need to be like the governance of municipalities in the constitutional respect (Niemivuo, 2022; Ryynänen, 2004). Models Based on Regional Self-Governance In the 2015–2019 election period, the preparation for the healthcare and social welfare reform continued. There was a switch to models that included a regional administrative level in accordance with Section 121(4) of the Constitution. In 2017, a model with 18 regions (maakunta) was introduced. These state-funded regions would have had self-government

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and a democratically elected regional council. Healthcare and social welfare tasks were proposed to be transferred to private service providers on a large scale. This model included several government proposals (e.g. 15/2017), which, however, showed constitutional problems related to corporatisation, freedom of choice and financing, among other things (see, e.g., Statements of the Constitutional Law Committee 26/2017 and 65/2018). Again, the reform lapsed as Finland faced parliamentary elections in the spring of 2019. In 2020, a new proposal based on regional self-government finally formed a successful basis for the reform. It signified a transfer of the tasks of healthcare and social welfare and the rescue services to a new administrative level: 21 WSCs (hyvinvointialue). In Uusimaa, however, the city of Helsinki, with four WSCs and the joint authority of Helsinki University Hospital, is responsible for organising the services. In this model, a WSC is an entity under public law with self-government and a regional council elected by direct elections. The services are mainly produced as public services, and the WSC can have its own service production (Government proposal 241/2020). In the 2020 model, the funding comes mainly from the state and partly from customer fees. The model includes a temporary reduction in the municipal tax rate. Taxation rights were not proposed for WSCs. After the Constitutional Law Committee’s express statement requiring the right to tax in 2014, the Committee has since outlined that the independent right to tax is not an absolute requirement of regional self-government in terms of Section 121(4) of the Constitution (Statement of the Constitutional Law Committee 26/2017). The county tax is prepared separately. The Constitutional Law Committee indicated that there were relatively few problems with the proposal. Importantly, the provisions on the state’s guidance for the city of Helsinki had to be specified and the guidance limited only to statutory tasks due to the constitutional protection of municipal self-government. Additional criteria for securing municipalities’ financial self-governance had to be included in the Implementation Act (Statement of the Constitutional Law Committee 17/2021). In the memorandum of the Social Affairs and Health Committee (16/2021), these aspects were considered, and the reform finally entered into force at the beginning of 2023. In the legal literature, the final stages of the healthcare and social welfare reform have been dealt with mostly from the perspective of outsourcing, taxation and state aid (see, e.g., Nykänen, 2020). It has been noted

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that the constitutional guarantees of Finnish regional self-governance are not strong (Mutanen, 2017; Niemivuo, 2022). Overall, it is evident that constitutional considerations received too little attention in the preparation for the reform. For example, the regional division and the status of Helsinki may need to be adjusted in the future. Thus, a need exists for constant monitoring of the WSCs’ operation to eliminate emerging problems (see Niemivuo, 2022; Valli-Lintu, 2017).

Conclusions on the Finnish Constitutional Doctrine of Regional Administration This chapter has studied the development of Finnish regional self-­ governance and the constitutional doctrine thereof. The core of the doctrine is formed by the concept of ‘self-government in administrative areas larger than a municipality’, which is the reference for regional self-­ governance in the text of the Finnish Constitution. This concept has not been opened up in the text of the Constitution. The preparatory works of the provision only refer to the concept of ‘region’ (maakunta) and to the fact that such self-government should be organised according to the principles of self-government. However, it remains open as to what these principles of self-governance are. Within the constitutional interpretation, the starting point has been that regional self-government is a form of self-government recognised by the Constitution that can be organised by ordinary legislation. According to the Constitutional Law Committee, it is important to consider the size of the areas, the totality of transferred tasks and powers and financial arrangements, as well as the decision-making system in the implementation of regional self-governance. In Finland, the goal of developing the regional administration has been, above all, to secure the availability and quality of public services. Until now, healthcare and social welfare have been the responsibility of municipalities, which has led to inequalities in access to these services. Therefore, it has been considered necessary to transfer these tasks to the co-operation of municipalities or to the level of regional government. A key aim of the reform was to promote everyone’s right to adequate healthcare and social welfare services (Section 19(3) of the Constitution). As a result, the Constitutional Law Committee has had to balance the protection of municipal self-government and fundamental rights.

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This regional administrative development has often been problematic in terms of the constitutional protection of municipal self-government. It has been stated that the development of regional self-government cannot eliminate the self-government of municipalities. Moreover, the constitutional characteristics of regional self-government have been sought from the characteristics of municipal self-government. The realisation of democracy has been a central criterion of self-­ governance in Finland. The nature of the regional administrative system as democratic and self-governing has been found to mitigate the problems facing municipalities’ self-governance. Even a significant reduction in the tasks of the municipalities is possible when the tasks are organised by a directly elected democratic self-governing unit. The above-mentioned key features of regional self-governance have been brought up within the literature of jurisprudence and studies of public administration as well. The scholarly doctrine views the self-­government of administrative areas larger than a municipality, as meant by the Constitution, as different from state administration. It is seen as a democratic administration in which the members of the self-government unit appoint the decision-making bodies, and the administration is based on the dominant position of the trustees. A self-governing unit is a legal entity of its own kind under public law, with its own tasks, institutions and finances. In addition, it has been considered important that, in organising self-governing regions, the self-governance of municipalities cannot be limited. On the other hand, Section 121(4) of the Constitution enables regional self-government to deviate, at least to some extent, from the features of municipal self-government. In the healthcare and social welfare reform, the regional decision-making power regarding the organisation of administration and service production has been significantly limited compared to the restrictions permitted by the constitutional protection of local government. Also, the implementation of democracy in the organisation of the healthcare and social welfare services is significantly weaker than in municipalities. In addition, a key difference is that a self-governing region does not have a general field of operation or a right to tax, which the municipalities do have. Regarding the right to tax, the Constitutional Law Committee’s position changed during the reform process, and in the end, the Constitution was not deemed to require self-governing regions to have their own right to tax. At least in this respect, the constitutional

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interpretation has proven to be flexible enough to facilitate the conflict between necessary administrative reform and the Constitution. Overall, Section 121(4) of the Finnish Constitution leaves the legislator with a lot of discretion regarding what regional self-government can be and must be. Clarification of the constitutional principles of regional self-­ government may become relevant when changes are made to WSCs in the future. The meaning of the new regional self-government is still being shaped as experiences are gained on its functionality. The lack of adequate funding has already become apparent. One can thus speculate on the need for a constitutional principle of providing sufficient funding for the regional level in the same way that this is included in the constitutional protection of municipal self-government. Overall, the variety between the constitutional regulation and interpretation of different forms of self-government appears extraordinary, especially since the new level of self-government is very significant not only in respect to the Finnish administrative system, but also in terms of the realisation of people’s fundamental rights (on human rights, see Chap. 10). On these bases, the constitutional provision on regional self-governance should be similar in content and precision to the section on municipal self-­ governance. Thus, it seems that the need for a constitutional amendment has become evident during the construction of regional self-governance in Finland.

References Literature Bourgon, J. (2007). Responsive, responsible and respected government. International Review of Administrative Sciences, 73(1), 7–26. Harjula, H., & Prättälä, K. (2015). Kuntalaki: Tausta ja tulkinnat [Municipal Act: background and interpretations]. Talentum. Jäntti, A., Airaksinen, J., & Haveri, A. (2010). Siniset ajatukset – vapaasta pudotuksesta hallittuun sopeuttamiseen [Blue thoughts  – from free fall to controlled adaptation]. Valtiovarainministeriö. Loughlin, J., Hendriks, F., & Lidström, A. (2011). Introduction. Subnational democracy in Europe. In J. Loughlin, F. Hendriks, & A. Lidström (Eds.), The Oxford handbook of local and regional democracy in Europe (pp. 1–24). Oxford University Press. Luukkonen, J. (2018). Matkalla maakunnallisiin sosiaali- ja terveyspalveluihin [On the way to regional social and health services]. Tampere University Press.

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Mutanen, A. (2017). Itsehallinto valtiosääntöoikeudellisena käsitteenä julkishallinnon uudistuksissa [Self-government as a constitutional concept in public administration reforms]. Edilex 2017/23. Mäenpää, O. (2012a). Julkinen organisaatio valinkauhassa – valettavana kunnallishallinto [Public organization in the bucket – municipal administration to be moulded]. In J.-E. Helenelund, I. Luoto, N. Mäntylä, & K. Siikavirta (Eds.), Julkista – yksityistä; millaisissa rakenteissa? (pp. 264–281). Vaasan yliopisto. Mäenpää, O. (2012b). Rakenneuudistajilla on ällistyttävän vähän mielikuvitusta [The reformers of public structures have surprisingly little imagination]. In A.  Mölsä (Ed.), Kuntarakennekirja (pp.  53–61). Kunnallisalan kehittämissäätiö. Mäkinen, E. (2017). Kuntien ja maakuntien valvonta Pohjoismaissa [Supervision of municipalities and regions in the Nordic countries]. Lakimies, 115(1), 3–24. Niemelä, M. (2008). Julkisen sektorin reformin pitkä kaari Valtava-uudistuksesta Paras-hankkeeseen [The long arc of public sector reform, from the Valtava reform to the Paras project]. Kelan tutkimusosasto. Niemivuo, M. (2022). Uusi aluehallinto – Hyvinvointialueista maakuntaitsehallintoon? [New regional administration – from WSCs to regional self-­government?] Kauppakamari. Nykänen, E. (2020). Yksityiset palveluntuottajat julkisten sosiaali- ja terveyspalvelujen tuottajina [Private service providers as providers of public healthcare and social welfare services]. Lakimies, 118(3–4), 431–457. Pihlajaniemi, T. (2012). Mihin unohtui perustuslain tarjoama optio – itsehallinnollinen maakunta? [Why was the option offered by the Constitution – a self-­ governing regions  – forgotten?]. In A.  Mölsä (Ed.), Kuntarakennekirja (pp. 63–68). Kunnallisalan kehittämissäätiö. Ryynänen, A. (2004). Kuntien ja alueiden itsehallinto [Self-government of municipalities and regions]. Edita. Saraviita, I. (2011). Perustuslaki [The Constitution]. Talentum. Sjöblom, S. (2011). Finland: The limits of the unitary decentralized model. In J. Loughlin, F. Hendriks, & A. Lidström (Eds.), The Oxford handbook of local and regional democracy in Europe (pp. 241–260). Oxford University Press. Suksi, M. (2002). Finland’s statsrätt [Finnish constitutional law]. Åbo Akademi. Suksi, M. (2011). Sub-state governance through territorial autonomy. Springer. Suksi, M. (2014). Vilket är förhållandet mellan den kommunala självstyrelsen och lagstiftningen på social- och hälsovårdens område? [What is the relationship between municipal self-government and legislation in the field of healthcare and social welfare?]. Tidskrift utgiven av Juridiska Föreningen i Finland, 150(3), 132–161. Tiihonen, P. (1986). Kansalaisten itsehallinnon laajentaminen [Expanding citizens’ self-government]. Tampereen yliopisto.

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Valli-Lintu, A. (2017). SOTE- ja kuntarakenteen pitkä kujanjuoksu [The long stretch of the healthcare and social welfare and municipal structures]. Kunnallisalan kehittämissäätiö.

Official Sources Constitution Act of Finland, Suomen Hallitusmuoto (94/1919). Constitution of Finland, Suomen perustuslaki (731/1999). Government proposal, Hallituksen esitys 1/1998, 324/2014, 15/2017, 241/2020. Instrument of Government, Regeringsform (1974:152, 2011:109). Memorandum of the Social Affairs and Health Committee, Sosiaali- ja terveysvaliokunnan mietintö 16/2021. Municipal Act, maalaiskuntain kunnallislaki (108/1917). Statement of the Constitutional Law Committee, Perustuslakivaliokunnan lausunto 37/1996, 11/2002, 11a/2002, 65/2002, 21/2009, 67/2014, 75/2014, 26/2017, 65/2018, 17/2021. Swedish Government Official Reports, Statens offentliga utredningar 1999:116.

CHAPTER 10

Human Rights Policy and Human Rights Architecture in Finland: A Review in Light of the Principle of Subsidiarity and Shared Responsibility Jukka Viljanen

National and International Human Rights Systems: Shared Responsibility and the Shifting Burden of Responsibility Human rights, the rule of law and democracy are generally acknowledged as foundations of the European model. Thus, improving the status of human rights in national legislation and establishing institutional resources in Finland became a natural part of the European integration process. High human rights standards were an incentive for Finnish authorities to fulfil the criteria needed for accession to the European family of states.

J. Viljanen (*) Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_10

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The Finnish approach to the protection of human rights is also closely linked to the concept of the Nordic welfare state (See Chaps. 2 and 17 in this volume). It is not enough for the authorities to refrain from interfering in an individual’s rights and freedoms; instead, the Nordic approach requires taking the necessary positive measures (legislation and resources) to secure protection, resolve existing societal problems and secure equal treatment and non-discrimination. The Finnish human rights system is strongly rooted in international human rights treaties, which go hand in hand with a comparatively extensive fundamental rights catalogue in the Constitution of Finland (2000). Our key international human rights co-operation takes place in the treaty bodies under the United Nations (UN) and the Council of Europe (European Court of Human Rights [ECtHR], Strasbourg) and the UN Charter-based system; that is, the UN Human Rights Council and especially the Universal Periodical Review (UPR). The key feature of human rights protection is an active dialogue between the international and national levels. The prevailing principle is the principle of subsidiarity (On regional self-government see Chap. 9 in this volume). Subsidiarity does not mean that hands of national authorities are free—it should be understood as an incentive to establish an efficient and rigorous domestic human rights system. The national courts and authorities have a primary responsibility for guaranteeing that human rights are applied according to the treaty obligations. The subsidiarity principle is even included in one of the key instruments, the European Convention on Human Rights. Protocol 15 amended the Preamble of the Convention into the formulation (entered into force on 1 August 2021): ‘Affirming that the High Contracting Parties, in accordance with the principle of subsidiarity, have the primary responsibility to secure the rights and freedoms defined in this Convention and the Protocols thereto, and that in doing so they enjoy a margin of appreciation, subject to the supervisory jurisdiction of the European Court of Human Rights established by this Convention.’ The ECtHR refers to the concept of shared responsibility. ‘[T]he principle of subsidiarity imposes a shared responsibility between the States Parties and the Court, and that national authorities and courts must interpret and apply domestic law in a manner that gives full effect to the Convention’ (Grzęda v. Poland, GC 15.3.2022, § 324). An efficient national human rights system must be founded on the premise that there are effective domestic remedies and that individuals can

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trust national courts and other authorities. This means that domestic structures should provide a reliable human rights system that actively follows the case law and recommendations of international tribunals and treaty bodies. In the recent case of M.A. v. Denmark (9.7.2021, § 149–150), the Strasbourg Court announced criteria to highlight the principles for how national actions or lack of actions have an impact on the Court’s assessment. Domestic courts must put forward specific reasons to enable the Strasbourg Court to carry out European supervision. If the reasoning regarding domestic decisions is insufficient without any real balancing of interests, this would be contrary to the Convention. Where the domestic courts have examined the facts, applied the relevant human rights standards consistently in line with the Convention and its case law and adequately balanced individual interests against the public interest, the Court would require strong reasons to substitute its views for those of a domestic court. The cross-cutting theme in this chapter is shared responsibilities and shifting the burden of responsibilities towards the national level. First, the chapter introduces the key principles and the international network forming the basis of the Finnish human rights system. Second, it concentrates on the Finnish system and its key institutions and mandates. Third, it discusses the government’s human rights policy instruments and their key elements. This chapter recommends that national human rights structures should be developed in such a way as to enable them to share information and adopt national legislation and policy actions so that they comply with evolutive interpretation from treaty bodies.

Key Features of the Finnish Human Rights Policy System According to Section 1 of the Finnish Constitution, the main principles of the Constitution include the inviolability of human rights and guaranteeing the rights and freedoms of the individual. The section also includes a paragraph outlining how Finland participates in international co-­ operation for the protection of peace and human rights and for the development of society. The Constitution establishes an obligation on public authorities to guarantee the observance of basic rights, liberties and human rights (Section 22). The section requires that courts and other authorities closely

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follow international treaty obligations. The principle of pacta sunt servanda is the key element in Finnish doctrine, meaning that the government cannot refer to domestic legislation if it is in conflict with international commitments. It also implies that the necessary legislative amendments should be introduced so that national law complies with treaty obligations. The principle of presumption is another prevailing principle in the Finnish legal order. This means that the national legislature respects international obligations. There is a presumption that the legislature cannot intentionally enact legislation that would result in a violation of Finland’s human rights treaty obligations (Pellonpää, 1991). Finnish foreign and security policy is human rights-based. This includes four types of issues: (1) rights; Finland supports international rule-based systems and rights founded on international human rights treaties; (2) participation; Finland’s representation and support for other actors promotes equality and non-discrimination; (3) resources; the necessary resources are addressed for implementation; and (4) operating environment; the challenge of the operating environment is taken into account in the activities of responsible ministries and embassies (VN 2021:92). The emphasis of Finnish human rights policy is on non-discrimination, equal treatment and the rule of law. From the point of view of international human rights protection, the themes are similar, focusing on non-­ discrimination, equality and the protection of vulnerable groups (VN 2021:92). The Finnish human rights system has both national and international foundations. The national human rights norms are based on the 2000 Constitution, with a significant role left for the Constitutional Law Committee of the Finnish Parliament. The reform of constitutional rights took place in the 1990s, updating the fundamental right to be in harmony with international treaty obligations. The Fundamental Rights Reform (HE 309/1993 vp, SK 969/1995) was carried out in 1995 and the new Constitution (HE 1/1998 vp, 731/1999) entered into force on 1 March 2000, including consolidating previously reformed rights into the Second Chapter of the Constitution. The fundamental rights catalogue is considered extensive compared to other Nordic countries. The Constitution includes a variety of rights, from equality rights to traditional civil and political rights, and also broad sections on economic, social and cultural rights, and it establishes responsibilities for environmental values (Länsineva, 2012).

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International human rights co-operation is based on the long-term activities in different inter-governmental organisations and the human rights treaties drafted under the UN and the Council of Europe. Finland was a neutral country during the Cold War, resulting in a delay in Finland joining the European system. Finland joined the Council of Europe in 1989 and the European Union in 1995. Finland has ratified the main important UN and European human rights treaties. In the UN system, the treaties include, for example, the International Covenant on Civil and Political Rights (1966, SopS 7–8/1976), the International Covenant on Economic, Social and Cultural Rights (1966, SopS 6/1976), the Convention on the Rights of the Child (1989, SopS 59–60/1991) and, most recently, the Convention on the Rights of Persons with Disabilities (2006, SopS 26–27/2016). From the Council of Europe treaty system, Finland has ratified most of the treaties, including the Convention for the Protection of Human Rights and Fundamental Freedoms a.k.a. the European Convention on Human Rights (1950, SopS 18 and 19/1990), the European Convention for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (1987, SopS 16 and 17/1991) and, most recently, the Council of Europe Convention on Preventing and Combating Violence against Women and Domestic Violence a.k.a. the Istanbul Convention (2011, SopS 52 and 53/2015). In addition, the EU Charter of Fundamental Rights is binding according to the Lisbon Treaty. Finland has also participated actively in the UN Charter-based system. Finland is a member of the UN Human Rights Council (2022–2024), which is responsible for strengthening the global promotion and protection of human rights. Finland has emphasised the interdependence of peace, human rights and development. Cross-cutting themes on the Finnish agenda are women’s and girls’ rights, indigenous peoples’ rights, the rights of persons with disabilities and the rights of sexual minorities (VN 2021:92). Due to the UPR monitoring each country’s human rights record, there is more pressure to actively monitor human rights at the national level. The first UPR review on Finland was in 2008, the second review was in 2012 and the third review was in 2017. The focus areas in the Finnish UPR report were hate speech and xenophobia and measures to prevent violence against women. The fourth UPR reporting procedure took place in November 2022. The new emerging issues that the Finnish report brings to the surface are covered by four themes: (1) the climate crisis,

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environmental degradation and loss of biodiversity; (2) Sami peoples’ rights and issues; (3) electronic communications and digital technologies; and (4) the COVID-19 pandemic (UPR Finland, 2022).

Finnish Human Rights Infrastructure and Key Human Rights Institutions Key Supervisory and Monitoring Institutions The focus of the Finnish human rights supervisory system is on the preventive review of legislation, guaranteeing that the legislation is not in conflict with human rights obligations and recognising human rights sensitive legislation that is already in the law-drafting phase. This preventive approach relies on the premise that all necessary challenges should be recognised before the legislation is in force. A criticism has emerged that there are no mechanisms to closely monitor the impacts and take into account the evolutive nature of human rights law. Evolutive interpretation means that human rights treaties are living instruments that should be interpreted in light of present-day conditions. This also means seeking ‘increasingly high standards’ and ‘requires greater firmness in assessing breaches of the fundamental values of democratic societies’ (Tyrer v. the United Kingdom, 25.4.1978, § 31; Selmouni v. France, 28.7.1999, § 101). The key institution in the supervisory structure is the Constitutional Law Committee of Parliament, and human rights duties are mentioned regarding constitutional supervision taking place in the Constitutional Law Committee (Section 74 of the Constitution). In addition to supervising the constitutionality of legislation, it also considers whether issues before it are compatible with human rights treaty obligations. The Committee is unlike other parliamentary committees. It consists of 17 members of parliament representing different political groups according to their power relations. However, it functions without a government vs. opposition division. Instead, it often reaches a unanimous opinion that should be followed by other committees. The role of constitutional law scholars is crucial in providing expert statements before the Committee. There is also an objective to follow the prevailing practice of the Committee and a high threshold is required to depart from previous lines of interpretation.

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The role of the Committee’s opinions in the courts and other public authorities might lead to problems. It should be remembered that the Committee undertakes reviews in an abstract situation without a full impact analysis of the legislation after the legislation has come into force. Therefore, legal scholars have rightly pointed out that deference to the Committee’s review before the courts might lead to problems due to the evolutive nature of the European Court’s case law. In cases where the ECtHR and other international bodies adopt new case law after the Constitutional Committee review, the subsequent case law can reveal a conflict in Finnish legislation. Therefore, Finnish courts should be cautious in relying on the views of the Committee and mechanically deferring to them (Lavapuro, 2012). The relationship between Finnish constitutional rights and international human rights obligations and the potential risk of different interpretation was discussed in the Venice Commission Report on the Finnish Constitution (Opinion 420/2007). The Venice Commission considered that Section 22  in particular makes the difference. According to the Commission, ‘the practice of the Committee [Constitutional Law Committee], the Ombudsman and of the Finnish courts, indicates that this duty is not only on paper, but is a living element of constitutional practice’ (Venice Commission Opinions 5 and 6, 2008). As the Venice Commission pointed out, the ombudsman also plays an important role in guaranteeing the implementation of human rights. A long tradition of Finnish fundamental rights monitoring includes a broad mandate for the ombudsman institution and the supreme guardian of the law, who have the mandate of oversight regarding legality. According to Sections 108 and 109 of the Constitution, both the Chancellor of Justice and the Parliamentary Ombudsman monitor the implementation of basic rights and human rights. To decrease overlapping mandates, the division of labour between the Parliamentary Ombudsman and Chancellor of Justice has recently been restructured. From October 2022 onwards, new legislation came into force on the division of labour between them (SK 330/2022). This new division means that the Parliamentary Ombudsman mostly focuses on petitions and the Chancellor of Justice focuses on the government’s legality issues and certain institutional issues, such as the automatisation of government and public procurements. Several key fields are now centralised to the Ombudsman’s Office, including the police, migration administration, the prison system and mental facilities, intelligence, social care and healthcare and Sami rights.

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One of the important features of the Parliamentary Ombudsman’s annual reporting is the list of the ten main human rights and fundamental rights problems. In the most recent report by the Parliamentary Ombudsman (K 18/2022 vp) the list includes: (1) deficiencies in the treatment of elderly people, (2) deficiencies in childcare, (3) deficiencies in the fulfilment of the rights of people with disabilities, (4) lengthy immigration processes and the unsecure status of precarious migrants, (5) failures with the treatment and conditions of prisoners, (6) failures with access to medical services and deficiencies in legislation, (7) deficiencies in basic education conditions and decision making, (8) lengthy judicial processes and problems with courts’ structural independence, (9) problems with good administration and transparency and (10) issues with the prevention of human rights violations and compensating violations (K 18/2022 vp). The annual report provides a comprehensive picture of the state of human rights and fundamental rights. The report is also presented to parliament and provides an opportunity for follow-up measures to be taken by different authorities. However, the Constitutional Law Committee does not normally assess a specific opinion given by these institutions. However, some exceptions have appeared in the last decade and they have focused on religious neutrality and how religious symbols and premises should be taken into account while considering, for example, school festivities (PeVM 16/2021 vp; K 15/2020 vp). Although it is difficult to compare the mandate of ombudsmen in other countries to that of Finnish legal guardians, two key features point to relatively strong mandates. First of all, the scope of the mandates is broad, although new legislation concentrates certain issues either with the Parliamentary Ombudsman or Chancellor of Justice. The complaints give a comprehensive picture of Finnish public officials’ human rights practice (Pölönen, 2010). Second, there are certain strong actions that these guardians of legality can take; in particular, they can initiate a police and pretrial investigation and ultimately start a prosecution in cases related to their monitoring of legality (Section 110 of the Constitution). There is also a more recently built network of six national, specific ombudsmen protecting and promoting specific groups and rights (Non-­ discrimination Ombudsman, Ombudsman for Equality, Ombudsman for Children, Data Protection Ombudsman, Intelligence Ombudsman, Ombudsman for Older People). In addition, there is the National Non-­ Discrimination and Equality Tribunal of Finland. It supervises compliance with the Non-Discrimination Act and the Act on Equality Between

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Women and Men (Equality Act), both in private activities and in public administrative and commercial activities. The Tribunal has a limited mandate in some areas (private life, family life, religion) and it does not give compensation. The very fragmented system of special ombudsmen has raised criticism and there have been efforts to develop infrastructure towards a more coherent system. One of the key issues that has provoked criticism is the elements related to the independence of some specific ombudsman organisations, especially their institutional placement under the Ministry of Justice. The role of these bodies under the umbrella of ministries might cause suspicion regarding their independence. However, the ombudsmen themselves did not consider this connection problematic (IOK 1:2022). A recent report on the ombudsmen system notes that ombudsmen working under the ministry does not automatically indicate that there are problems regarding their impartiality and independence. The central issue is how the steering of the independent ombudsman institutions is done and how the administrative location of the institutions is shown outside of the institutions (IOK 1:2022). National human rights institutions are founded by the Paris Principles, Principles Relating to the Status of National Institutions (20 December 1993, by UN General Assembly Resolution 48/134). National institutions are vested with the competence to promote and protect human rights. The mandate should be as broad as possible and should be set forth in constitutional or legislative texts. The mandate can be different in each country, and the same is true for composition. However, the composition should guarantee the national institution’s independence and pluralism. According to the Paris Principles, this refers to, for example, members of civil society, representatives of human rights non-governmental organisations (NGOs) and academic experts. National institutions may be authorised to hear complaints and petitions. The Finnish human rights institution under the Paris Principles was established late (HE 205/2010 vp, SK 535/2011, entry into force on 1 January 2012), combining a long tradition of the Parliamentary Ombudsman and introducing two new parts: the Human Rights Centre and the Human Rights Delegation. The Parliamentary Ombudsman provides the possibility to introduce complaints, and the Human Rights Centre has a mandate to promote human rights, including the distribution of information, human rights education and studies, producing reports on the observance of treaty obligations and other issues that are important for

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ensuring human rights. The Human Rights Delegation provides pluralism to national institutions, including academic scholars and representatives of NGOs. It approves the Centre’s plan of action and activity report and discusses important human rights issues. The Human Rights Centre does not report to parliament independently. The Parliamentary Ombudsman’s Annual Report also includes a chapter on the activities of the Human Rights Centre and Human Rights Delegation, including a description on monitoring the implementations of human rights during the reported year. Finally, it is important to highlight the role of NGOs in the infrastructure. Their role is an especially important addition for monitoring the treaty mechanisms and the UPR and providing information and even shadow reports. The emphasis on civil society is especially important in terms of the protection of minority rights. Finnish Judiciary and Human Rights: Courts and Other Authorities  Every court in Finland is a human rights court. There is no constitutional court that deals with constitutional complaints. All courts in Finland at different levels must apply international human rights and fundamental rights in their interpretation. The right to a fair trial, including the requirement of an independent and impartial judiciary, is protected by Article 6 of the European Convention and Section 21 of the Finnish Constitution. Most cases against Finland before the ECtHR resulted in the finding that violations were due to excessively lengthy court proceedings. To repair this systemic problem, new legislation (Laki oikeudenkäynnin viivästymisen hyvittämisestä 362/2009) was enacted that also allowed national courts to provide compensation for individuals who were victims of delayed domestic proceedings. The act came into force on 1 January 2010. The key principle in Finnish adjudication is a human rights-friendly interpretation. This was first described in the Constitutional Law Committee statement (PeVL 2/1990 vp) on the implementation of the European Convention on Human Rights. In principle, this means that the court seeks to find an interpretative option that is in compliance with international treaty obligations and fundamental rights. Recent constitutional reforms improve the direct applicability of human rights and fundamental rights (HE 309/1993 vp). In addition, Section 106 (Primacy of the Constitution) requires that courts do not apply legislation that is manifestly in conflict with the Constitution and should instead give primacy to the Constitution. The threshold to apply primacy is relatively high due to the ‘manifestly’ criteria; however, courts regularly apply human rights-­ friendly and fundamental rights-friendly interpretation.

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A broad variety of rights have been applied before the domestic courts. The most common cases relate to the right to property, conflicts between privacy and freedom of expression, immigration law and public childcare cases. For example, in the Sami people’s fishing rights case, the Supreme Administrative Court discussed property rights and the rights of indigenous people to practice their own culture and issues related to environmental rights (KHO 2021:19). Finnish paternity case law is the most acknowledged example using the Primacy of Constitution (Section 106) argumentation and basically applying it because of the ECtHR case law. National paternity legislation, and especially the provision related to the time limits for paternity processes, were in clear conflict with international human rights obligations (KKO 2012:11; KKO 2014:13; KKO 2021:88). There are three phases that can be identified that provide the increasing involvement of dialogue between international courts and treaty bodies. When Finnish courts started to actively implement human rights in the 1990s, this phase could be described as an era of the recognition of human rights. The increasing number of human rights issues has been discussed in immigration cases since a number of important Supreme Administrative Court decisions were made in 2007 (KHO 2007:47; KHO 2007:48; KHO 2007:49). This second phase could be called an interpretative dialogue era. The key factor in these cases is related to assessing how expulsion or deportation impacts the right to a family life and to the prohibition of torture and inhuman treatment. The Finnish courts have learned their lessons, and especially regarding freedom of expression case law, it has been acknowledged that judgments are better balanced and reasoned with adequate references to international case law. The Finnish court gave ‘due consideration to the principles and criteria as laid down by the Court’s case-law’ (Satakunnan Markkinapörssi oy and Satamedia oy v. Finland, GC, 27.6.2017, § 198). The newest phase could be called an era of dynamic interpretative harmonisation.

Government Instruments and Procedures for Defining Human Rights Policy Government ministries are involved in preparing human rights policy through a network of fundamental and human rights focal points in different ministries, although the main ministries responsible are the Ministry of Justice and the Ministry of Foreign Affairs. The government

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has recognised that the decisions and recommendations of international courts and treaty bodies can be used to identify the basic problems in Finland that should be solved with policy and legislative actions and to point out those issues that need particularly rigorous monitoring (VN 2021:59). The National Human Rights Action Plan (NAP) and the Government Report on Human Rights Policy are key documents describing the priorities of Finnish human rights policy. These documents are discussed before the Finnish parliament. In addition, recently, the government’s programmes have included specific human rights-related initiatives, including a paragraph promoting the implementation and monitoring of specific treaty obligations (VN 2019:31). The programmes provide a binding legislative agenda for a four-year period. The government’s programmes are especially important in a system where you have coalition governments and everything must be agreed with coalition partners. The recent government programme has especially highlighted implementation procedures related to new treaties. Prime Ministers Rinne (2019) and Marin’s (2019–2023) Government Programme makes a specific reference to the monitoring and implementation of the Istanbul Convention, and several measures have been introduced to improve the status of the victim in cases of violations against minors and of those who have been victims of sexual violations. Solutions are often limited in terms of personnel costs. In the case of the Istanbul Convention, the result was the introduction of a national rapporteur focusing on violence against women. In addition, some resources were given to shelters for domestic violence victims (VN 2019:31). Governments have introduced three NAPs to date. The first action plan was devised in 2012 (Oikeusministeriön julkaisu 18/2012), the second in 2017 (Oikeusministeriön julkaisu 9/2017) and the third in 2021 (VN 2021:59) concerning developing the monitoring of fundamental rights and human rights. The NAP is devised once in a four-year parliamentary period. The NAP has been structured into a domains-of-life model and it increasingly focuses on developing human rights indicators. However, the content of these plans have been changing each time. In the contrast, the Government’s human rights policy reports are not drafted for each government. Reports have been done so far four times (2004, 2009, 2014, 2021), in addition there were two earlier reports focusing on international human rights protection. The two most recent reports are from 2014 and 2021 (VN 2021:92). The reports have

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originally started with the particular focus on foreign policy documents, but since the 2009 reports are providing broader perspective on human rights both from foreign policy and national policy standpoint. Human rights policy report is prepared under the coordination of Ministry of Foreign Affairs. According to the Report it is to provide long-term guidelines to the Government’s human rights policy and government’s actions taken in the context of human and fundamental rights (VN 2021: 92, 8). The first human rights policy documents were primarily foreign policy oriented. The first documents were issued in 1998 and 2000, when the foreign minister provided reports on international human rights. The first government report on human rights policy was issued in 2004 (VNS 2/2004 vp) and it started from the premise that human rights policy was one of the focus areas of Finnish foreign and security policy. It was not until 2009 that the government’s human rights policy report approached the relationship between international and national human rights policy as an interrelated question. According to the report, the promotion of human rights at the international level is closely connected to the good execution of human rights in the national legal order. The credibility of actions relating to the international protection of human rights is based on what the government does at the national level (VNS 7/2009 vp). Despite there being no original structure that would include parliament in the everyday monitoring of human rights issues other than procedures related to making legislation, the parliament has been active in requiring additional information from the government. The Constitutional Law Committee (PeVL 56/2017 vp) made certain basic recommendations that the government should take into account while preparing its fundamental rights and human rights policy. First, the government and parliament should have better information regarding the findings of international treaty bodies on human rights problems. And second, the government’s actions relating to international and national human rights should comply with each other. The most recent policy recommendations have identified key failures in the Finnish system. The current structure is based on practical requirements related to the enforcement of international judgments and decisions, which take place through the co-ordination of the Ministry of Foreign Affairs and especially the Human Rights Courts and Conventions unit. Although Finland complies with most decisions and recommendations, there is, unfortunately, evidence of excessive lengths of time for the execution of judgments. First, one Finnish case is currently under enhanced

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supervision before the Committee of Ministers (Council of Europe), after more than ten years have passed since the original judgment (X v. Finland, 3.7.2012) and the necessary general measures (new legislation) are still pending. The same failures in monitoring structures for human rights bodies’ decisions and recommendations have been recognised by independent scholars focusing on the implementation and monitoring of Council of Europe treaties. One of the measures that should be taken to enhance the highest level of decision making is to have consistent information about international treaty bodies and their decisions and recommendations. This should include both the government and parliament (Viljanen et al., 2022). One of the concrete issues that has hampered Finnish human rights-­ based decision making is the lack of necessary and adequate information on the different international supervisory bodies and their decisions and recommendations among responsible authorities, those responsible for law drafting and also those in the court system. This has been especially addressed in the project building a data bank of different recommendations. This is mentioned in the most recent government human rights policy report. The data bank should also provide updated information on the responses to the implementation of recommendations and decisions. It would also serve as a way to recognise potential human rights impacts and help assess them. It would help human rights bodies and authorities in general, as well as NGOs and the public, to receive information that they can use in their own monitoring (VN 2021:92).

Human Rights and Public Administration in Finland: Key Findings and Recommendations Finnish human rights structures are based on the Finnish Constitution and international treaty obligations. The inspiration from international case law has been essential in adopting the necessary legislative reforms and harmonising doctrines. Thus, the Finnish human rights doctrine follows international trends and is based on an evolutive interpretation. The key factors in a balanced human rights system are shared responsibility and subsidiarity. This requires that national structures apply international treaty bodies’ decisions and recommendations. Most recently, international treaty bodies’ critical comments provided an incentive for the Finnish parliament to adopt a new law (1 February 2023) on legal gender recognition (Laki sukupuolen vahvistamisesta 295/2023, so- called

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translaki), which put an end to the requirement for the sterilisation of trans people from previous legislation (Laki transseksuaalin sukupuolen vahvistamisesta 562/2002). There is a need for new methods of distributing relevant and up-to-­ date information on international human rights courts and treaty bodies. The latest attempt was made by the ECtHR in October 2022, when it launched the knowledge-sharing platform (ECHR-KS), providing detailed and up-to-date analyses of the Court’s case law. A similar initiative was developed by the government. There is a data bank under construction for those responsible for drafting legislation, for courts and authorities applying human rights-sensitive issues and for NGOs. Having adequate quality reasoning also requires domestic knowledge-sharing platforms. The inevitable challenge in the Finnish system is its fragmentation. Structures are partly developed in accordance with the Paris Principles for national human rights institutions and are partly based on the prevailing structures of the Ombudsman and the Chancellor of Justice. The fragmentation of the system is due to additional resources having been established without sufficient consideration of the comprehensive structures. The most urgent problem in the Finnish system relates to the government and parliament’s role. Those who are responsible for resources and legislation, are not sufficiently kept informed on recommendations and decisions by international human rights treaty bodies. It should not be taken for granted that a high standard will also be maintained in the future without ongoing dialogue. It is for the academic community to provide rigorous criticism and challenge national courts and authorities to keep up with international developments. This is especially necessary when the burden of responsibility is clearly shifting towards member states and national authorities. The European discussion emphasises the connection between human rights, democracy and the rule of law. Recent events in Europe and the United States have proven how important it is to recognise negative trends and the possible threats facing democracy and the rule of law (the rule of law backsliding), even in those countries with stable democracies. This means that public authorities need to take their obligation to guarantee the observance of basic rights, liberties and human rights seriously. Dialogue between the national and international levels is a crucial element in combatting these unwanted developments. The subsidiarity principle means that efficient protection requires that national and European supervision of human rights go hand in hand.

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Conclusion The cross-cutting theme in this chapter is shared responsibilities and shifting the burden of responsibilities towards the national level. First, this chapter introduced the key principles and the international network forming the basis of the Finnish human rights system. Second, it concentrated on the Finnish system and its key institutions and mandates. Third, it discussed the government’s human rights policy instruments and their key elements. Finland has established modern constitutional human rights protections, which is in line with the Nordic approach to human rights and international treaties. The inevitable challenge in the Finnish system is its fragmentation. In the Finnish system, the most urgent problem requiring a solution relates to the government and parliament’s role, and especially the need to keep those making decisions informed about the problems related to legislation and resources that have been shown by international bodies to be in a violation to human rights treaty obligations. The chapter recommends that national human rights structures should be developed in such a way as to enable them to share information and to adopt national legislation and policy actions so that they comply with evolutive interpretation from treaty bodies.

References and Other Sources HE 309/1993 vp. HE perustuslakien perusoikeussäännösten muuttamisesta [Government proposal on amending fundamental rights]. HE 1/1998 vp. HE uudeksi Suomen hallitusmuodoksi [Government proposal for the new Finnish Constitution]. HE 205/2010 vp, HE laeiksi eduskunnan oikeusasiamiehestä annetun lain ja valtioneuvoston oikeuskanslerista annetun lain muuttamisesta [Government proposal on amending legislation concerning Parlimentary Ombudsman and Chancellor of Justice]. IOK 1/2022. Ihmisoikeuskeskuksen selvitys kansallisista ihmisoikeustoimijoista. Ihmisoikeuskeskuksen selvityksiä 1/2022 [Human Rights Centre Report on National Human Rights Actors]. K 15/2020 vp. Eduskunnan oikeusasiamiehen kertomus vuodelta 2019 [Annual Report of the Parliamentary Ombudsman for 2019]. K 18/2022 vp. Eduskunnan oikeusasiamiehen kertomus vuodelta 2021 [Annual Report of the Parliamentary Ombudsman for 2021].

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Länsineva, P. (2012). Fundamental principles of the constitution of Finland. In K.  Nuotio, S.  Melander, & M.  Huomo-Kettunen (Eds.), Introduction to Finnish law and legal culture (pp. 111–126). Forum Iuris. Lavapuro, J. (2012). Constitutional review in Finland. In K. Nuotio, S. Melander, & M. Huomo-Kettunen (Eds.), Introduction to Finnish law and legal culture (pp. 127–140). Forum Iuris. Oikeusministeriön julkaisu 18/2012. Kansallinen perus- ja ihmisoikeustoimintaohjelma 2012–2013 (Ministry of Justice Publication No. 18/2012) [National Action Plan for Fundamental Rights and Human Rights 2012–2013]. Oikeusministeriön julkaisu 9/2017. Kansallinen perus- ja ihmisoikeustoimintaohjelma 2017–2019 (Ministry of Justice Publication No. 9/2017) [National Action Plan for Fundamental Rights and Human Rights 2017–2019]. Pellonpää, M. (1991). Euroopan ihmisoikeussopimus. Lakimiesliiton kustannus. PeVL 2/1990 vp. Perustuslakivaliokunnan lausunto ihmisoikeuksien ja perusvapauksien suojaamiseksi tehdyn yleissopimuksen ja siihen liittyvien lisäpöytäkirjojen eräiden määräysten hyväksymisestä [Constitutional Law Committee Opinion on ratification of the European Convention on Human Rights]. PeVL 56/2017 vp. Perustuslakivaliokunnan lausunto Kansallinen perus- ja ihmisoikeustoimintaohjelma 2017–2019 [Constitutional Law Committee Opinion on National Action Plan for Fundamental Rights and Human Rights 2017–2019]. PeVM 16/2021 vp. Perustuslakivaliokunnan mietintö asiassa K 15/2020 vp [Constitutional Law Committee Statement in Annual Report of the Parliamentary Ombudsman for 2019]. Pölönen, P. (2010). Monitoring fundamental and human rights as the Parliamentary Ombudsman’s duty. In Parliamentary Ombudsman 90 (pp. 51–63). UPR Finland. (2022). National report submitted pursuant to Human Rights Council resolutions 5/1 and 16/21* Finland. Retrieved from https:// documents-­d ds-­n y.un.org/doc/UNDOC/GEN/G22/443/87/PDF/ G2244387.pdf?OpenElement Venice Commission. (2008, March 14–15). Opinion No. 420/2007: CDL-AD(2008)010. European Commission for Democracy Through Law opinion on the Constitution of Finland adopted by the Venice Commission at its 74th plenary session, Venice. Viljanen, J., Seppä, T., Järvinen, P., & Keskilammi, N. (2022). Euroopan neuvoston ihmisoikeussopimusten kansallinen täytäntöönpano ja seuranta. Valtioneuvoston selvitys- ja tutkimustoiminnan julkaisusarja 2022:17 [Evaluation of the implementation and monitoring of the Council of Europe Human Rights Treaties]. VN 2019:31. Pääministeri Sanna Marinin hallituksen ohjelma 10.12.2019. Osallistava ja osaava Suomi  – sosiaalisesti, taloudellisesti ja ekologisesti kestävä yhteiskunta [Programme of Prime Minister Sanna Marin’s Government 2019. An inclusive and capable Finland: A socially, economically and ecologically sustainable society].

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VN 2021:59. Valtioneuvoston perus- ja ihmisoikeustoimintaohjelma 2020-23, Perusja ihmisoikeuksien toteutumisen seuranta [National Action Plan on Fundamental and Human Rights 2020–2023: Developing the monitoring of fundamental and human rights]. VN 2021:92. Valtioneuvoston ihmisoikeuspoliittinen selonteko [Government’s human rights policy report]. VNS 2/2004 vp. Valtioneuvoston selonteko Suomen ihmisoikeuspolitiikasta [Government’s report on the human rights policy of Finland]. VNS 7/2009 vp. Valtioneuvoston selonteko Suomen ihmisoikeuspolitiikasta [Government’s report on the human rights policy of Finland].

Case-Law European Court of Human Rights Grzęda v. Poland, GC 15.3.2022 M.A. v. Denmark 9.7.2021 Satakunnan Markkinapörssi oy and Satamedia oy v. Finland, GC, 27.6.2017 Selmouni v. France, 28.7.1999 Tyrer v. the United Kingdom, 25.4.1978

Supreme Court

of

Finland

KKO 2012:11 KKO 2014:13 KKO 2021:88

Supreme Administrative Court KHO 2007:47 KHO 2007:48 KHO 2007:49 KHO 2021:19

of

Finland

PART IV

Process and Actors: The Essence of Finnish Policy

CHAPTER 11

Public Service Systems: Meaningful Public Service Päivikki Kuoppakangas, Jari Stenvall, and Ilpo Laitinen

Background/Introduction In Finland, the aim of a meaningful public service system is a high level of welfare, transparency, sustainability, quality and equality of the services and their provision (Stenvall et al., 2021). Public services and their current system of organisation are the target of change as citizens’ needs change. In the background, there are multiple reasonings and rationales; hence, the current funding conditions in public finance and the ageing of tax-­ paying citizens have resulted in a growing service demand, among others,

P. Kuoppakangas (*) University of Turku, Turku, Pori Unit, Finland e-mail: [email protected] J. Stenvall Tampere University, Tampere, Finland I. Laitinen Helsinki, Finland University of Oxford, Oxford, UK © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_11

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forcing attention to be paid to enhancing service productivity and to the sustainability of their impact. Thus, the growing challenges will not simply be solved by increasing resources; instead, they will require new innovations (See Chap. 12 in this volume) and a change in the public sector’s operational logic and culture, including policymaking in terms of service systems (Laitinen et al., 2013, 2018). Meaningfulness is an increasingly important issue in public service systems in Finland. The key focus here is how to develop a service system that reliably creates value for service users, with an understanding of things that are meaningful for them, which simultaneously enhances public sector employees’ perceived meaningfulness of work and, by doing so, addresses the need for public service system change as citizens’ needs change. In the following sections, we first present the theoretical concepts and the three case organisations of the study. Next, we outline the methods, analyse the results and finally, we put forward our conclusions.

Meaningfulness of Work Meaningfulness has previously been mostly considered a philosophical concept (Frankl, 1946), whereas meaningful work represents a fundamental area of an individual’s existence (Hunter et al., 2013; Zeglat & Janbeik, 2019). Hence, people are constantly searching for meaning and significance in their jobs (Gillet et al., 2013). In our study, the perceived meaningfulness of work is related to the experience of significance in public sector professionals’ work and its relationship to meaningful public service systems (Martela & Pessi, 2018). The study focuses on the customer interface and customer value creation, although issues are particularly considered in terms of public service professionals and the management and development of their work in aiming for meaningful public services. The aspects of customer value, the meaningfulness of work and the related knowledge growth are still increasingly important developments for sustainable urban development and meaningful public service systems (Houhala et  al., 2022). A meaningful work experience is important because, among other things, it helps employees answer the question, ‘Why am I here?’ (Pratt & Ashforth, 2003), while also contributing to job satisfaction, job well-being, motivation, engagement and creativity and thus broadly to the attractiveness of public organisations as workplaces (Rosso et al., 2010).

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Current research has also found that employees actively seek ways to build meaning, even in the face of recurrent work-related disappointments (Bailey et al., 2019). The experience of meaningful work strengthens cognitive skills, and meaningful work can be understood as a fundamental human need that all people require to satisfy their inevitable interests in freedom, self-determination and dignity (Frankl, 1946; Yeoman, 2013). According to Martela and Pessi (2018) and several researchers (Bailey et al., 2019; Yeoman, 2013), the perceived meaningfulness of work arises from four basic experiences: (1) a sense of autonomy, (2) a sense of competence, (3) a sense of belonging and (4) a sense of contributing to the ‘greater good’. In practice, a sense of autonomy is manifested in the employee having a say in how he or she performs his or her work tasks and perceiving them as things of value to him or her as well as goals. The second basic experience is a sense of competence, which is expressed when an employee makes use of his or her own skills and has the opportunity to learn new things on the job. A sense of belonging contributes to strengthening the individual’s experience of inclusion in the organisation and the work community and to the change in the way work is done. They are part of a work community where they are valued by others as colleagues and for their professional skills. The fourth basic experience aligns with numerous researchers (Kuoppakangas et al., 2020), a sense of contributing to the ‘greater good’. When an employee feels that the work he or she does has a positive impact on other people and the world around him or her, the experience of the meaningfulness of the work is strengthened.

Customer Value and the Co-creation of Customer Value With the meaningful public service system in Finland, we mean that it aims at a high level of welfare, transparency, sustainability, quality and equality of services (Stenvall et al., 2021). Thus, understanding customer value, customer value creation and value co-creation plays a significant role in achieving and providing meaningful public services. In its simplest form, customer value can be defined as the difference between the benefits and costs/threats received by the customer. The role of the customer is emphasised in the creation of customer value, in that value is created when the customer uses or consumes a service or product (Grönroos, 2011). Customer value is then the customer’s

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experience of the service. Thus, the service provider alone cannot create value. Value is co-created (e.g. in service encounters) when the service provider’s resources and practices interact with the customer’s resources and practices (Grönroos & Voima, 2013; Laitinen et al., 2013). This is called the co-creation of customer value and it is constructed of four intercoupled processes (i.e. Osborne, 2018): (1) the difference between the benefit to the customer and the costs/sacrifices, (2) the customer’s role is emphasised in creating customer value, (3) the service provider cannot create value on its own and (4) value is created together. However, customer value creation is a broad concept and needs to be approached by first looking at how and from where customer value is created. According to Osborne (2018), the creation of value for the customer in public sector service provision is more complex than in private sector service provision. He has grouped value creation in public sector service provision into three main dimensions: value co-creation, value as user experience and value in context. Value creation is one part of the service, which forms part of the customer experience, and the interaction or encounters between the customer and the provider are at the heart of all this. Customer value is the totality of meaning, encounters and the realisation of the customer’s own needs for himself or herself (Houhala et al., 2022).

The Three Case Organisations The three case city organisations of the research and development (R&D) study (funded by the Finnish Work Environment Fund #200363) presented in this chapter are among the pioneers in Finland at developing meaningful public services for their citizens. Oulu and Tampere are among the five most inhabited cities in Finland, with Pori being the tenth in 2022 (On the role of cities see also Chap. 5 in this volume). In the Oulu city organisation—OUTO—a people-oriented and cross-­ administrative co-development model has recently been developed, where development activities are being implemented by, among others, the OuluBot chatbot (Ouka.fi, 2022; OUTO, 2021). Similarly, the Pori city organisation has promoted the participation of local residents at the strategy level and put it into practice, for example, by using the participation and interaction model (Pori.fi, 2022). The city organisation of Tampere has been implementing service co-creation practices on a long-term basis

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over the past decade (Kuoppakangas et  al., 2020, 2022; Tirronen et al., 2020). In 2022, the city of Oulu and its service areas had 209,934 inhabitants (Statistics Finland, 2022). According to a staff report (2021), the City of Oulu had a total of 11,199 employees. The sectors involved in the development of OuluBot include corporate administration (116 people), welfare services (3641), education and cultural services (5848), municipal and environmental services (180), BusinessOulu (179), Oulu Digi (61), Oulu Water (118) and Oulu10 (23) as the driving force and key player in the work. In other words, OuluBot indirectly reaches about 91% of Oulu city employees. OuluBot’s trainers and content producers consist of about 45 people from the above-mentioned sectors. Together, they ensure that OuluBot content is accurate, consistent and up to date. Working with smart digital services requires new ways and approaches from both municipalities and employees. These means and models aim at a change from an organisational to a people-oriented approach, which also aims at strengthening the experience of the meaningfulness of work and well-being at work. The projects will also have to reform municipal counselling and guidance models, as digitalisation and automation methods streamline routine activities and free up resources for more demanding one-to-one client encounters. In total, the city of Pori had 6265 employees in 2021 and 83,482 inhabitants, according to Statistics Finland (2022). The focus of the R&D project in the city of Pori, as presented in this chapter, is the customer service work of the city organisation. The customer service model was developed as part of an organisational transformation process that includes a common on-site customer service centre to be launched in 2024. The R&D project aimed at co-defining customer value and training staff in a new kind of customer service while strengthening the perceived meaningfulness of work. The new service centre will require staff to learn new knowledge and new ways of working and to shape a new common work and organisational culture. At the heart of everything is to develop positive service attitudes and customer encounters. The number of staff moving from different physical offices/premises to the new shared premises is currently around 60 employees from different service sectors of the city organisation. The city of Tampere had 244,223 inhabitants (Statistics Finland, 2022) and 14,434 employees in 2021. In 2021, the service group of the city of Tampere’s Growth Services was involved with economic policy,

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competitiveness and innovation, and employment (hereafter EKI), and had a total of 1898 employees. The particular area of R&D presented in this chapter is the construction of the perceived meaningfulness of work in the context of customer value creation among EKI’s service professionals. The task of the EKI is to organise and contribute to the provision of vocational training and upper secondary education services, employment services, growth services and services related to business services, employment and growth services, real estate, the Facilities and Housing Policy Service Group and the Tampere Region Vocational College Tredu. Growth Services EKI is responsible for the preparation and implementation of economic, land and housing policy, and for the city’s corporate and social relations. It also carries out development programmes to improve growth, competitiveness and quality of life (on the developments in Tampere, see Chaps. 5 and 17 in this volume).

Methods This chapter is based on a qualitative longitudinal R&D case study carried out from 2021 to 2022  in Oulu, Pori and Tampere city organisations, comprising thematic interviews with 153 informants who represent organisational managers, supervisors, service developers and service professionals. The R&D study also applied the tenets of the action research method (Silverman, 2011) in co-creation workshops. The informants’ work was studied from the perspective of relevance in the co-creation of customer value or whose work activities influenced this issue. Customer value cocreation and the perceived meaningfulness of work are largely experiential phenomena, which makes qualitative methods well suited as research methods. The interviewees were asked to describe how and what kinds of things formed customer value and the co-creation of customer value in meaningful work. What role did they themselves play in its formation and how did it relate to their perceived meaningfulness of work? Interviewees were also asked for their thoughts on how to promote the co-creation of customer value in meaningful work and what issues (and for what reasons) made it difficult to develop and manage these issues in the case organisation and in terms of the interviewees’ perceived meaningfulness of work? These questions explored the current situation in the case organisations and the subjective views of the interviewees on the research topic (Kuoppakangas et al., 2022).

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Value and Meaningfulness The results of the R&D study are presented in this section, starting with thematic interview themes and integrating the analysis into the existing literature on the topics. In all case organisations in the target cities, the perceived meaningfulness of work among professionals who created customer value was perceived to be at a fairly or very good level.

Components of Customer Value Across all the case organisations and regardless of the interviewees’ job roles, there was almost unanimity among the interviewees regarding what constitutes customer value and customer value creation. However, anomalies were found in one of the case organisations in that the customer was not necessarily involved in the co-development of services that met their needs, but that these were mainly developed within the city organisation based on customer feedback. In the other two organisations, the creation and co-creation of customer value by involving the customer (i.e. the cities’ residents) in the development of services ‘from start to finish’ was more systematically modelled and embedded in the development of services (Table 11.1). These results are broadly in line with Grönroos and Voima’s (2013) framework of customer value; that is, the difference between the benefits and costs/sacrifices received by the customer. In addition, the role of the customer was seen to be emphasised in the creation of customer value, in that value is created for the customer when he or she uses or consumes the service or product. Furthermore, the interviewees found that service providers could not create customer value for public services on their own, but rather they facilitated it. Value is co-created (e.g. in service encounters) when the provider’s resources and processes interact with the client’s resources and processes, as shown in the following interview quotes (see Table 11.1).

Elements of Meaningfulness of Work In all the case organisations, regardless of job function, the interviewees were consistent in their ideas about the factors that make up the perceived meaningfulness of work. The interviewees’ ideas are in line with current knowledge (Martela & Pessi, 2018; Yeoman et  al., 2019) and, in

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Table 11.1  Extracts of empirical data citations Empirical Citations What are the components of customer value, customer value creation? – “Identifying the customer, understanding the customer and empathising with and exceeding customer expectations.” (i0921jsect) – “[T]he services that the public sector delivers, they are smooth and functional and appropriate and meet the service needs that the citizens expect from us.” (i1021jtcet) – “Customer value starts, and creation, starts in a certain way from understanding what factors produce value for each person, individual, subject, and what factors the subject associates with that value creation. And it is definitely also, in my opinion dialogic, in relation to it, is the question then of value that is created in a service, value that is created in an interaction situation, value that is created in meaningful, important relationships.” (i0221pscet) What are the elements of meaningful work? – “[I]t’s not necessarily the success, it’s the positive feedback that gives it. But it can also be that we notice that we did something completely wrong, in a way we notice that we have completely failed ... the idea that the mistake is not something to be afraid of. You learn a lot more from those failures. And they also bring a sense of meaning, that okay, in this team we dare to really fail.” (H3e) – “It also removes the fear or shame of making mistakes, because it doesn’t matter in the end, because mistakes happen to everyone.” (D10a) – “[I]f we don’t have the culture and the organisation and the management system in such a way that we can openly discuss, and in a way create that compromise about what is the ultimate goal and the way of working and the daily encounter, those are the things that kind of hinder that.” (D2021ri) – “Bringing the common good into the bigger ‘picture’ even if your own contribution to it is small.” (i0921cp) – “But when you are working further away from the customer interface, and really large processes and their streamlining or development, the meaningfulness is found somehow else, or you have to find it further away, no one will feed it to you, but you have to perceive it yourself.” (i0221atct) – “And of course, the fact that someone would have more knowledge about something, so it might give them a sense of well-being that I am good at something.” (D2021r) How can customer value creation be developed and managed as meaningful work? – “However, the responsibility for experiencing meaningfulness of work lies with the employee—it can be nurtured, it can be developed.” (i0221) – “I don’t know if leadership is any different from other leadership. Perhaps it should emphasise the satisfaction of the customer’s needs and the fact that the organisation has a common direction, the organisation’s need and what it is, and then we have a common goal and a common direction.” (i0921iicte) (continued)

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Table 11.1 (continued) – “It’s in the encounter between the employee and the customer that the meaning is created, that’s where it matters most. And management should create as many conditions for success as possible. ... It should be just the sensitivity to listen and give the other person space to talk about their own work from their own perspective, not that try to say what I want you to say. But to be in the presence of the experience and give it space.” (C2021j) – “Developing leadership instead of administrative—systematically going through customer service situations and customer relationships.” (i0821psstc) –  “Managers also need to be closer to the customer.” (i0921ttpc) What factors contribute to or hinder the development and management of customer value creation? – “[I]n my opinion, meaningful management takes into account the individual, the individual is searching with the individual for meaningfulness, meaningfulness of work. And then we encourage just this kind of self-management.” (i0821lk). – “While the strategy is something, the vision of the city is something. Does that policy making really give that kind of real and genuine customer value support? Does top management give the right kind of customer value-added support?” (i0221lpcp) – “You have to find people with a certain type of value base, vision, customer value-­ oriented relevance, and with them you have to start working on it and almost risk whether we will succeed in this. Then if we succeed and get top management, political decision-making and customer experience, the value stream-based thing would increase relevance.” (i0221kvmoc) – “Participative management and network management should be increasingly used (as a remedy for silos).” (i0621kmvbc) – “In management, you should start from why something exists, from the big definition, towards that subjective experience.” (i0221thapc) – “And a skilled manager feeds that individual hunger and experience of the meaningfulness of work in relation to the big picture on the career path.” (i0221pesct) – “The key work of senior management should be to analyse the value environment and identify what is meaningful in time and in this community.” (i0921ieietc)

particular, a sense of autonomy emerged; that is, the employee has autonomous control over how he or she performs his or her work, and the jobrelated goals are also valuable goals for him or her. In this regard, the research also shows that when the organisation supports the employee’s own job-­crafting, it increases this sense of autonomy and supports the perceived meaningfulness of work (Hulshof et al., 2020). Interviewees talked about a feeling of competence, which is strengthened when an employee is able to use his/her own competences and learn new skills at work. However, this was also associated with a loss of a sense of meaningfulness in their work, on the one hand, if the competences were

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• Self-management and autonomy vs. the level of utilisation of capability • Relevant subjective vs. collective experience • Values vs. goals and common goals of one's own work

Employee

Management

• Enabling • Capability assessment development and balanced harnessing of • Feedback-measuring-genuine dialogue • Evaluation of effectiveness

MEANINGFULNESS

• A culture of contributing to the ‘greater good’ and service • Understanding customer value vs. meeting the statute (human-centeredness) • Successes vs. failures • Jointly created objectives

Organisation culture

Communication

• A sense of belonging – a collective experience • Continuous genuine dialogue and information sharing transparency • Common goals vs. impact

Fig. 11.1  Building the experience of meaningfulness of work in the three case organisations

not sufficiently utilised in the organisation or, on the other hand, when the employee felt overburdened (i.e. when one’s potential was utilised to the limit) (e.g. Oelberger, 2019). An interesting finding of this study was that competence is not only an individual characteristic, but it is also built communally as co-competences among colleagues, which in turn strengthens the individual and shared experience of the meaningfulness of work (Fig. 11.1). Interviewees also talked about the importance of belonging to the work community; that is, a sense of belonging and the importance of being valued by colleagues. The work done for the greater common good was most emphasised by interviewees, which reinforces the feeling of doing good, where the work done has a positive impact on other people and the world around them. Several studies have shown, as Lysova et al. (2019) found in their studies, that serving others or promoting the greater good is a primary factor in building the experience of the meaningfulness of work. Our findings are in line with these previous studies—helping others enhances the experience of work meaningfulness: ‘Bringing the common good into the bigger “picture” even if your own contribution to it is small’ (Interviewee i0921cp).

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Another less-studied issue that emerged from the interviews was that successes not only create a sense of meaning in work, but failures in work can also build it. In other words, when the work climate and organisational culture are supportive and transparent to the employees, there is an opportunity to learn from failures and thus support the experience of meaningfulness in work (Table 11.1). In each of the case organisations, the emphasis on the construction and development of the experience of meaningfulness at work differed partly due to the different contexts. The context of OuluBot in Oulu is the focus on the use of artificial intelligence technology and cross-sectoral digital collaboration. Similarly, Pori’s shared on-site service centre physically gathers customer service professionals (employees) from different industries and departments of the city organisation into shared premises, whereby the co-ordination of different work and operating cultures and the finding of a common organisational culture, with common aims and goals, are topical development points in the construction of the perceived meaningfulness of work. The balance between autonomy and the organisation of public service expert work emerged from the interview data as a development goal for the Tampere EKI, and the ability to work in a community/team was particularly emphasised in the construction of the experience of the meaningfulness of work. In particular, the detection and enhancement of co-capabilities and individual capabilities was found to be critical in building the experience of meaningful work (Fig.  11.1). In addition, similar results appeared in the interviews at Oulu and Pori as factors supporting the experience of the meaningfulness of work: ‘And of course, the fact that someone would have more knowledge about something, so it might give them a sense of wellbeing that I am good at something’ (Interviewee D2021r).

Developing Customer Value Creation and Managing Meaningful Work A common theme in all the case organisations was that managing the experience of the meaningfulness in work should not be separated from any other management tasks but should be integrated into the daily work of the frontline staff and into the management of all customer value-added service tasks (Table 11.1). According to the interviewees, supporting the

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experience of meaningful work should be made a conscious and aware part of management. In light of the results of the study, the critical issues in managing the experience of work meaningfulness were those that undermined the perceived meaningfulness of work. Leadership that is perceived to be strained is destructive to the experience of work meaningfulness. The results of this study show that good leadership is necessary, but not necessarily sufficient, to support public sector employees’ experience of meaningful work in Finland. Interviewees also talked about how leadership/management should also be creative and flexible, albeit with clear boundaries. Frontline managers/leaders should be close to the customer interface, allowing them to lead by example, according to the interviewees (Table 11.1). Furthermore, interviewees reported that the development of empathy skills in leadership should be supported and nurtured. Among other things, the interviewees also suggested that measuring externalities is important in building the experience of meaningfulness in work in customer value-added roles. One way in which managers/leaders can influence employees’ experience of work meaningfulness is to help them link their daily work tasks to the values and objectives of the organisation and to the strategy. In fact, research shows that helping employees understand how their daily work tasks relate to these organisational goals can increase their experience of work meaningfulness (Lysova et  al., 2019). In other words, managers/ leaders’ role is to construct narratives of the greater common good and how different tasks contribute to it in the Finnish public service context. Moreover, a novel finding that emerged from the interviews was how employees themselves should take responsibility for the experience of work meaningfulness, and the role of managers/leaders is to support by enabling that experience, which in turn contributes to the development of customer value creation: ‘However, the responsibility for experiencing meaningfulness of work lies with the employee—it can be nurtured, it can be developed’ (Interviewee i0221). Simultaneously, it was found that individual employees should not be left alone with the responsibility, as it might jeopardise the perceived meaningfulness of work. In addition, several interviewees stressed that managing the experience of work meaningfulness should focus on the individual and enable the employee’s subjective experience of work meaningfulness, which is, however, also built collectively in the work community in Finnish public services. Current knowledge also suggests that management/human resource work needs to take into account individual differences linked to work, the

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organisation and society in order to promote the creation of an experience of meaningful work for employees. In this way, managers can focus on ‘enabling opportunities for meaning-making’ rather than simply seeking to ‘manage the experience of work meaningfulness’ in a top-down manner, which may, paradoxically, lead to an erosion of the perceived meaningfulness of work (Bailey et al., 2019).

Hindrances to and Catalysts for Customer Value Creation The distance of managers/leaders from the customer interface and from the day-to-day work of the customer service professionals was seen as a factor hindering the development and management of customer value creation. Thus, the support of management was seen as a key enabler and vice versa. In addition, the lack of a shared sense of purpose and of jointly created objectives with goals for customer value creation were perceived as a hindrance. In addition, political decision making, which is closely linked to the public sector, was seen partly as a hindrance, but also as an enabler in Finnish municipalities. Furthermore, Finnish public sector organisations’ silos were perceived as a hindrance to customer value creation, and the co-creation of services was seen as one remedy to enhance collaboration over silos (Table 11.1). Customer insight and a people-centred approach to the development and delivery of public services were understood as fundamental enablers in developing and managing the creation of customer value and meaningful public services (see also Osborne, 2018). Enabling and articulating the experience of the meaningfulness of work to the employee contributes to the creation of customer value, according to the interviewees. What is common to all three case organisations and the interviewed informants is how and where the perceived meaningfulness of work is formed: a sense of autonomy, competence, belonging, the greater good and, as novel attributes, co-competences, the enabling and narrative-­ construction role of management and the co-responsibility for the perceived meaningfulness of work (Table  11.1). Furthermore, differences were found in which factors hindered or contributed to the experience of meaningfulness at work, although they can be considered to be more or less in the same direction. From the perspective of managing meaningfulness, the focus was on the individual’s own responsibility for consciously

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constructing the experience, and the role of the frontline manager was to enable and articulate meaningfulness to employees. Based on the results of the interviews, meaningful work management should be integrated into all management tasks and should not be separated from other management responsibilities. In particular, bottom-up management supports the experience of work meaningfulness and top-down management undermines it.

Conclusion We presented a snapshot of meaningful public services from the perspective of Finnish public service sector professionals in three different city organisations (Oulu, Pori and Tampere) on the topic of customer value creation in meaningful work. The sense of ‘contributing to the greater good’, which has been linked in previous research literature to the experience of work meaningfulness, emerged as a close theme (e.g. Laitinen, 2022a, b; Martela & Pessi, 2018; Pessi et al., 2022; Yeoman et al., 2019). The sense of ‘contributing to greater good’, which has been linked in previous research literature to the experience of work meaningfulness, emerged as a close theme (e.g. Kuoppakangas et  al., 2020; Laitinen, 2022a, b; Martela & Pessi, 2018; Pessi et al., 2022; Yeoman et al., 2019). The context of this study, the provision of meaningful public sector services, was itself perceived as pursuing the common greater good, whereby the feeling of doing good in the context of creating customer value enhanced the experience of the meaningfulness of work. In the target Finnish cities, the experience of meaningful work among professionals who create customer value was perceived to be at a fairly or very good level. Employee competencies build work communities’ co-competencies, which, in this study, proved to be an important factor in increasing the perceived contribution and work meaningfulness. At the same time, community co-competence and the shared experience of work meaningfulness are easily shattered, for example, by changes in staff and organisational changes in Finnish public services. Therefore, it is important to build community and organisational cohesiveness by supporting the staff’s experience of work meaningfulness. Identifying and developing community co-competences also supports cross-organisational collaboration in Finland; that is, breaking down the old silos in the public sector while strengthening the experience of meaningful work and meaningful public services.

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To lead the experience of meaningful work, the role of the frontline managers became one of enabling and articulating the meaningfulness of work among employees. In the Finnish context, the experience of meaningful work is supported by bottom-up leadership and conversational collaboration between the employees and line managers. In conclusion, the findings of this study, based on the different R&D areas of three different city organisations in Finland, contribute to and add value to previous knowledge on the formation and management of the experience of the meaningfulness of public sector services. We also argue that the perceived meaningfulness of work enhances the meaningfulness of public services.

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CHAPTER 12

Evolving Innovation Policy Rationales in Finland Markku Sotarauta, Jari Kolehmainen, and Valtteri Laasonen

Introduction Innovation policy is a key public policy in many parts of the world and is seen as crucial for securing a better future. It reflects the explicit understanding of knowledge and innovation being fundamental for the economic performance not only of nations but also of regions and cities. For Edquist (2011), innovation policy is about the activities of public organisations influencing innovation processes, including creating new ideas, implementing them and diffusing them in society (Fagerberg, 2018). In this chapter, we follow Edquist’s narrow understanding of innovation policy and focus mainly on the changes in the rationales behind it; in other words, we look at the reasons for and logical foundations of why an innovation policy is needed, what it should focus on and how it should be implemented (Laranja et al., 2008). According to Laranja et al. (2008),

M. Sotarauta (*) • J. Kolehmainen • V. Laasonen Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_12

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policy rationale constitutes higher-level government action modes and limits that are commonly embedded in ideological positions. Innovation policy took pole position among Finnish public policies three decades ago during economically challenging times. A sound and celebrated but still vulnerable innovation economy, supported by explicit public policies, emerged from the economic recession of the early 1990s (Vihriälä, 2019). As a result, Finland became the first country to opt for the concept of a national system of innovation to provide its science and technology policies with a conceptual framework with a distinct innovation orientation (Sharif, 2006). However, the rapid expansion and institutionalisation of the innovation policy stagnated around 2008/2009 as the Finnish innovation policy community lost confidence and direction due to the financial crisis. Several economic- and innovation-related causes for the Finnish economy’s slow recovery from this period have been identified, including the rapid restructuring of industry (especially ICT and forest industries), the slowing rate of exports, the low level of industrial investment, low employment, and decreasing investment in research, development, and innovation (Veugelers et al., 2009; Vihriälä, 2019). Nevertheless, Finland’s structural strengths—the educational level of the population, its capacity for innovation, and the high quality of its governance systems—have not eroded overnight, and thus the country has continued to do well based on international comparisons (Vihriälä, 2019). Still, shocks to the economy (e.g. the decline in Nokia’s mobile phone production) and weakened cost-competitiveness have led to a decade-long period of slow economic development. Simultaneously, the golden age of innovation policy drifted into a state of confusion. Finland is still among the world’s leading innovation economies by many measures (e.g. Dutta et  al., 2020), although it is no longer the international poster child it used to be. In this chapter, we focus on the various rationales informing Finland’s evolving innovation policy, shedding light on the changes in this regard from the modern outset of innovation policy from the early 1990s to the early 2020s.

Innovation Policy in Search of Direction In the early days of innovation policy development, its rationale rested mainly on economic visions and arguments. Since then, the foundations of innovation policy have been expanding to include social and ecological

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premises, but these have simultaneously become increasingly fine-tuned. Borrás (2009) identified two main trends: (1) the spread of innovation policy to other areas of public policy (widening) and (2) the introduction of increasingly sophisticated policy instruments (deepening). Of course, recent changes in innovation policy have not emerged in a vacuum; they reflect a general change in the public sector as more decentralised, multi-­ scale and multi-functional governance, and approaches are developed in tandem with and to replace centralised models (Flanagan et al., 2011). From Linear Innovation Policy to Innovation Systems Schot and Steinmueller (2018) identified three framings that grasp the essence of different innovation policy rationales. The first, innovation policy 1.0, draws on a linear model of innovation, privileging the technological discovery process, with its focus on scientific breakthroughs, technological development, and the commercialisation of new technologies. The primary rationale is to correct market failures by financing public research, subsidising R&D in private enterprises (directly or through tax deductions) and establishing and fine-tuning an intellectual property rights system (Schot & Steinmueller, 2018). Vannevar Bush’s (1945/2021) book, Science: The Endless Frontier, is commonly seen as the initiator of the first innovation policy stream. Innovation policy 2.0 turns one’s gaze towards innovation systems—in other words, to ‘networks of institutions in public and private sectors whose activities and interactions initiate, import, modify, and diffuse new knowledge (technologies)’ (Freeman, 1987, p. 1). Innovation policy 2.0 emphasises a more versatile knowledge base for innovation with the aim of strengthening the links between discovery and the applications of new knowledge. The innovation system approach, explicitly arguing that innovation processes are not linear but interactive and systemic, became influential in the 1990s. The proponents of innovation systems showed that innovation comes in many shapes, with variegated types of actors and networks. The realisation of the diversity of the innovation systems led to a series of studies focusing on national or regional innovation systems. The innovation system-orientated research and policies were based on the realisation that innovation is a key to national and regional competitiveness and crucial for countries choosing a high-road strategy instead of a low-­ road one based on cost competition. The innovation system concept led to the introduction of a new vocabulary to discuss the roles of universities,

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research institutes, firms, users, intermediaries, public organisations, and educational organisations as elements in a system (Miettinen, 2002). Innovation policy 2.0 aims to correct different types of system failures, including insufficient infrastructure (communication networks, research and education, intermediaries), capability failure (lack of appropriate competencies, especially relating to emerging technologies), institutional failure (formal and informal institutions hampering innovation, such as through a lack of risk-taking behaviour), and network failure (e.g. limited collaboration between universities and industries). Network failures may be divided into weak network failures and those that are strong (Smith, 2000). The former refers to the poor exploitation of complementary sources of knowledge and interactive learning, while the latter relates to overly intensive collaboration, potentially leading to lock-in to established functions and processes, and inbred behaviour. In the 2010s, the innovation ecosystem concept emerged to (partly) challenge that of the innovation system. Granstrand and Holgersson (2020), for example, defined the new concept as an ‘evolving set of actors, activities, and artefacts, and the institutions and relations, including complementary and substitute relations, that are important for the innovative performance of an actor or a population of actors’ (p. 91), although this does not differ much from innovation system conceptualisations. In principle, the innovation ecosystem literature emphasises more market mechanisms than the institutionally oriented innovation system literature, as it draws more on business studies. In contrast, the innovation system literature is more embedded in economics, regional development studies, and economic geography. Moreover, the increasing presence of digital platforms and the ecosystems revolving around them have undoubtedly influenced innovation scholars and policymakers. Autio and Thomas’s (2014) definition explicitly links innovation ecosystems to platform thinking. According to them, an innovation ecosystem is a ‘network of interconnected organizations, connected to a focal firm or a platform, that incorporates both production and use side participants and created as appropriates new value through innovation’ (Autio & Thomas, 2014, p. 205). Platforms are expected to integrate different but related actors, activities, and knowledge (Asheim et al., 2011). In the innovation ecosystem literature, access to global innovation ecosystems is highlighted more than in the innovation system literature, which is more nationally or regionally oriented (on platforms see also Chap. 6 in this volume).

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Innovation scholars disagree on the benefits of the new concept. For example, Oh et  al. (2016) observed that while the proponents of the ‘innovation ecosystem’ have contributed to the innovation debate with some interesting ideas, they have not drawn on ‘eco’ terminology, and thus their contribution is substantially limited. As a result, Oh et al. (2016) warn that the concept of the ecosystem should be avoided or, if used, employed with caution. However, the concept of the ecosystem has also been defended (Ritala & Almpanopoulou, 2017), and beyond any doubt, it is gaining more space in policy and business rhetoric, and its usefulness remains to be seen in the future. A Call for a Transformative Innovation Policy The rationale of the innovation system-driven innovation policy is still largely valid, but innovation policy 3.0 redirects and enriches it in many ways. In particular, the need to solve grand challenges by utilising innovation policy approaches and instruments has come to the fore. Innovation policy 3.0 strategies are openly built upon social values and focus on solving selected social, ecological, and economic challenges. As is often the case with emerging concepts and policy approaches, there is also considerable conceptual variation among differing approaches under innovation policy 3.0 (Diercks et al., 2019). Innovation policy 3.0 is labelled as an eco-innovation or a transformative or mission-oriented innovation policy. All the variations highlight, in their own way, the importance of the explicit mobilisation of science, technology, and innovation for meeting grand challenges. In practice, Innovation policy 3.0 is layered up and so does not replace earlier innovation policy paradigms (Schot & Steinmueller, 2018). Indeed, as Fagerberg (2018) reminded us, Joseph Schumpeter’s work and the subsequent stream of innovation studies do not focus on economic growth per se but on qualitative changes in outputs, the organisation of the economy and its structure. Thus, innovation policy 3.0 is not as distant from the earlier incarnations as is often claimed. The rationale of innovation policy 3.0 is to correct transitional or transformational deficiencies related to the economy and society (Schot & Steinmueller, 2018). In this way of thinking, the socio-politico-economic system is not ready to move towards a more sustainable development stage. Therefore, several systemic and market deficiencies must be identified and dealt with more systemically than in innovation policies 1.0 and 2.0. Thus, the public sector is supposed to play a significant role in

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directing innovation activities and shaping markets in the desired direction. In the 2010s, several policy documents began to frame this emerging rationale. The systemic perspective of innovation policy 2.0 added complexity to the previous linear approach, and innovation policy 3.0 is adding a whole range of stakeholders and interest groups into the equation, which again adds to the need to devise new governance arrangements. As the variety of individual interests and ambitions increases and directionality becomes imperative, the political nature of innovation policy will become visible, necessitating the state to further specify its role and position in terms of identifying and achieving the desired policy goals. Thus, innovation policy 3.0 differs drastically from innovation policy 1.0, specifically from its neoclassical interpretation, which aims to build a supporting environment for businesses without making actual choices between industries or companies. It is crucial to remember that innovation policy 3.0 is not free of problems. To date, it has treated societal needs and the many visible and invisible issues as unproblematic. Inadequate attention has been paid to what is compromised in terms of issues calling for policy attention, such as what should or should not be among the collective concerns and thus the targets for innovation policy (Flanagan et al., 2022). Moreover, the capability of the state apparatus (politicians and bureaucrats) to work with many stakeholders, identify priorities and maintain the policy focus long enough is not guaranteed. Innovation policy 3.0, despite its promise, may shift power and resources to narrow interests while neglecting the many hidden issues that do not have strong policy advocates. In sum, innovation policy 3.0 emphasises directionality, demand articulation, reflexibility, and co-ordination more than the other two paradigms. Directionality applies to the identified urge to explicate the societal direction that a policy ought to strive for. Demand articulation is about anticipating user needs and mobilising the identification of latent demand in the direction of societal challenges (Edler & Boon, 2018). For its part, reflexibility refers to actors’ capacity to anticipate changes and mobilise them accordingly. Finally, co-ordination stresses the importance of managing the policy mix (labour, education, industry, trade) to guide the system as a whole in the hoped-for direction (Chaminade & Lundvall, 2019).

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The Evolution of Innovation Policy in Finland Becoming a Poster Child: The Finnish Version of Innovation Policies 1.0 and 2.0 Overall, Finnish innovation policy has evolved along the generic avenue identified by Schot and Steinmueller (2018). The pre-history of Finnish science- and technology-based innovation (STI) policies dates from the Second World War to the 1970s, when the foundations for the current system were constructed. In the 1980s, Finland adopted an unambiguous technological orientation to strengthen the technological capacity of Finnish industries, thus mitigating the dependence on material-based production and exports. Therefore, among the main objectives of the 1980s was to move to a targeted and systematic technology policy. At this stage, the main elements of an entity, which was later labelled an innovation system, were established. The National Technology Agency (Tekes) was founded in 1983, and many of the functions carried out by the Ministry of Trade and Industry (e.g. R&D loans and grants, appropriations to target technical research) were passed on to Tekes. In addition, the Science Council was established in 1963, later named the Science and Technology Council (1987) and the Research and Innovation Council (2009). Moreover, the Academy of Finland was established in 1948 and modernised in 1969. The state had a central role in building the institutional capacity for science and technology, but city councils also played an active role, as local technology transfer mechanisms for the commercialisation of science were established (Georghiou et al., 2003). The first local technology centre was established in Oulu in 1982, and many other prominent cities followed its example in the 1980s. The recession of the early 1990s is often mentioned as a critical juncture that shifted Finland from an investment-driven, dominantly linear science and technology rationale to an innovation-driven, systemic policy (Boschma & Sotarauta, 2007; Sotarauta, 2012; see Fig. 12.1). In Finland, the 1990s were characterised by a severe recession (in the early 1990s) and by the exponential growth of the Nokia-led ICT cluster (from the mid-­1990s onwards). The rationale changed in the 1990s, and a shift to indirect measures became a fundamental organising policy principle (Hermans et  al., 2005). Thus, in the 1990s, amid a severe recession, Finland adopted the concepts of an innovation system (Lundvall, 1992) and a cluster (Porter, 1990) to frame its policy design (see Hernesniemi

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0,08 0,06 0,04 0,02 0 -0,02 -0,04 -0,06 -0,08 -0,1

Fig. 12.1  Annual change in the volume of gross domestic product (Official Statistics of Finland, 2022)

et al., 1995). A cluster-flavoured innovation policy with the ambition to diversify the economy towards new high-technology industries and away from resource dependency fitted well with the situation (Romanainen, 2001). The policy shifted to emphasise indirect policy approaches and avoided direct interventions in the product markets (Hermans et  al., 2005). Moreover, as Schienstock and Hämäläinen (2001) reminded us, the government recognised the need to find ways to support the competitiveness of Finnish industries as inexpensively as possible. In concert with national innovation system thinking, a cluster-based policy fitted well into the new mix of policy rationales. Importantly, resources were directed towards both public and private R&D activities. Innovation policy 2.0 was at the core of Finnish innovation policy for almost three decades. The most visible programmes were those of the Strategic Centres of Excellence for Science, Technology, and Innovation (SHOK 2007–2016) and the Centre of Expertise (CoE 1994–2013), which provided a national and regional context for increasing collaboration between the main parties to boost specialisations. As a result of an increased emphasis on innovation, Finnish R&D expenditure, which in the 1970s had been among the lowest in the OECD countries, had risen to be among the highest in the world by 2010 (see Figs. 12.2 and 12.3), decreasing drastically after 2010. After being among the leading countries

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EUR Million 8000 7000

6000 5000

4000 3000 2000

1000 0

Fig. 12.2  Research and development expenditure in Finland by performing sectors (EUR million) (Official Statistics of Finland, 2022)

Fig. 12.3  R&D expenditure in Finland, annual change percentage (Official Statistics of Finland, 2022)

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Fig. 12.4  Total R&D expenditure of selected countries, the OECD and the EU27 as a percentage of GDP (GERD). (Source: OECD data, n.d.)

globally, Finland has fallen far behind the globally leading countries (Israel and the Republic of Korea) and the top Nordic country (Sweden). It is, however, still above the European Union and OECD averages (Fig. 12.4). The Years of Confusion and the Search for a New Approach The first critical juncture in the evolution of Finland’s innovation policy occurred in the early 1990s, and the second happened around 2008— about the same time as when the global financial crisis began. Interestingly, in 2008, a national innovation strategy was drafted and passed on to parliament for a political debate, not as a reaction to the financial crisis, which had not yet surfaced, but to lift Finland to the next level. The new strategy aimed to renew the innovation policy rationale by fine-tuning the strong science and technology establishment and complementing it with a stronger emphasis on the demand side of the innovation coin. The shifting policy rationale well reflected Lorenz and Lundvall’s (2006) idea of the two innovation modes, namely science, technology, and innovation (STI), and doing, using, and interaction-based innovation (DUI). The conviction was

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that Finland was doing well in terms of the STI mode, but was behind its closest rival and benchmark countries in terms of DUI. More broadly, the innovation strategy highlighted the importance of a broad-­based innovation policy and introduced the idea of innovation ecosystems. Finland’s long-term investments in expertise and technological research & development have produced good results, and its successful science and technology policy has created a basis for many successful industries. This provides a good basis for constructing the future. However, the challenges of growth and competitiveness can no longer be tackled only by means of a sector-based, technology-oriented strategy. Instead, a demand-based innovation policy must be strengthened alongside a supply-based innovation policy. (Proposal for Finland’s National Innovation Strategy, 2008, p. 2) In order to meet global challenges, innovation policy must be broad-­ based and comprehensive. Individual and separate policy measures will not suffice to ensure a pioneering position in innovation activity, and thus growth in national productivity and competitive ability. (Proposal for Finland’s National Innovation Strategy, 2008, p. 11) Instead of national innovation systems, innovation ecosystems and innovation centres are drawing attention, being locally and regionally fixed but globally networked at the same time. (Proposal for Finland’s National Innovation Strategy, 2008, p. 11)

The formulation of the new strategy was supported by an extensive international evaluation of the Finnish National Innovation System (Veugelers et al., 2009). It concluded that Finland was losing ground in competitiveness, the growth aspirations of enterprises were low, the policy orientation was overly technological, the primary manufacturing companies dominated the innovation scene and the level of internationalisation was low, as was international researcher mobility. The strategy document also mentioned the Nordic paradox, namely that R&D expenditure was not synonymous with innovation activity. Finland (and Sweden) had invested significantly in R&D, but the levels of commercially successful innovations were relatively low. Some years later, Prime Minister Juha Sipilä, reflecting on the latter point, expressed his doubts about the long-­ held innovation policy rationale by asking: How in the world [has] this happened? Why weren’t we better able to exploit global economic growth despite exceptional investments in expertise and R&D? (A speech at the Summer Conference of the Finnish Union of University Professors and the Finnish Union of University Researchers and Teachers 2016)

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In addition to the critical observations in the international evaluation, Sabel and Saxenian (2008) argued that Finland was at risk of becoming a victim of its own economic success. They concluded: The core products of both industries—pulp, paper and packaging for the one, cell phones for the other—have become commodities in the fast-­ growing markets in the rapidly expanding economies of the developing world … Prospects of longer-term growth in Finland will require rethinking … [The system] that fuelled successful innovation … appears to have become self-limiting in the global environment of the 2000s. (Sabel & Saxenian, 2008, p. 112)

By 2010, Nokia had become the world’s largest mobile phone manufacturer, with approximately 40% of the market share, and it played a central role in the Finnish economy and the innovation system. Nokia’s production volume and R&D expenditure continued to increase until its market share in mobile phones shrank drastically after 2010, when the Apple and Android ecosystems began proliferating. Eventually, Nokia sold its mobile phone division to Microsoft, leaving a systemic hole in Finland’s innovation system. Moreover, the historically strong collaboration between Finnish universities and industries decreased. In 2010, private sector funding for Finnish universities was approximately €78 million; by 2017, it had dropped to approximately €52 million. At the same time, Finnish companies were carrying out more R&D abroad than previously (Ormala, 2019). In sum, the innovation strategy aimed to reform the policy rationale, but then Finland simultaneously hit the Nokia and the global financial crises, and several years of no or slow growth followed (see Fig. 12.1). As a result, all the flagship programmes ended, and the successful policy path with much international visibility faded away. The new catchwords that surfaced from the confusion included ecosystems, platforms, and open innovation. The ideology became visible, albeit with immature (or non-existent) theory, but introducing new policy initiatives and instruments proved difficult. For example, the Innovative Cities programme, introduced in 2014 and drawing on an ecosystem rationale, ended in the middle of the first programme period. The National RDI Roadmap (Kestävän ja kehittyvän yhteiskunnan ratkaisuja tuottava Suomi, 2020) states that to strengthen, broaden, and increase the impact of innovation policy, business and research networks

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need to be grouped into larger ecosystems. Consequently, in the 2020s, innovation policy explicitly emphasised the facilitation of ecosystems crossing regional and industrial boundaries. The most visible of them, drawing on a platform/ecosystem rationale, is the Growth Engine initiative, which, instead of strengthening selected clusters, aims to generate billion-euro export businesses in Finland. The initiative provides financial support to platform companies (instead of clusters) to achieve set business goals (Fig. 12.5). The selected companies are expected to construct a globally strong ecosystem around them by mobilising an extensive network of companies of different sizes, including research organisations and public actors, to identify and achieve a common set of concrete business goals. By 2022, the six platform companies that have received funding are ABB for Green Electrification, Sandvik for innovative solutions for mining, the Fortum & Metsä Group for accelerating the development of sustainable bioproducts, KONE for developing a new concept based on the flows of urban life, Neste for novel sustainable and scalable solutions for transportation and chemicals, and Nokia for unlocking industrial 5G beyond connectivity (Business Finland, 2021). Another significant change in policy rationale is the shift from the programme to the contractual mode of operations. Prime Minister Sanna Marin’s Government Programme introduced ‘an ecosystem agreement procedure’ to create the world’s most functional experimental and innovative environment by 2030 (Finnish Government, 2019). Consequently,

A cluster

An innovation ecosystem with an engine company

Fig. 12.5  Visualisation of the rationales between a cluster programme and the Growth Engine initiative

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ecosystem contracts strengthening the innovation activities of and in cities are now among the critical elements of the innovation policy. According to the government programme, contracts for the strategic allocation of public and private research, development, and innovation funding to strengthen globally competitive ecosystems will be drawn up with university cities (see also Chap. 5 in this volume). The ecosystem contract procedure reflects both the broadening and deepening innovation policy; the contracts are not only customised to serve local needs, but are also implementable locally. The contractual procedure between the government, represented by the Ministry of Economic Affairs and Employment of Finland, and the respective city councils exemplifies the operationalisation of the ecosystem approach alongside the Growth Engine programme.

Conclusion The primary shifts in policy rationale have taken place during and after significant critical junctures that challenged the economic basis of the country. Finnish policy institutions, and consequently policy rationales, have adapted to the global economy and changes in the policy environment and have been learned from the experiences of other countries (Boschma & Sotarauta, 2007). The pre-history of the Finnish innovation policy strengthened the institutional system related to Finland’s post-­ Second World War modernisation and industrialisation process. Later, the innovation system emphasised a nationwide effort to survive the economic recession of the early 1990s. Moreover, the period of slow economic growth and economic restructuring, which began with the 2008 financial crisis and Nokia Corporation’s restructuring, also called for reforms in the innovation policy rationale. Simultaneously, global demand to solve the grand challenges was incorporated into the innovation policy mix. As is the case in the other Nordic countries, there are clear signs of efforts to include mission-orientated and transformative elements in policy strategies (Scordato et  al., 2022). As Laasonen et  al. (2020) showed, Finnish innovation policy has expanded and deepened at the same time, and in the 2020s, the innovation policy now incorporates all three innovation policy paradigms, namely the technology push of innovation policy 1.0, the enhancement of innovation systems from innovation policy 2.0, and efforts to push for transformative changes, as indicated by innovation policy 3.0. Consequently, innovation policy has become more layered than before as new policy goals and instruments have been added to

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existing policies without explicitly constructing a unique policy mix with clearly defined responsibilities. To some extent, new goals and words have replaced the old ones without a clear understanding of how the new approach should change concrete measures. Policy layering and drift are potentially the primary sources of policy confusion. The simultaneous expansion and deepening of innovation policy, accompanied by the ambition to ‘save the globe’, is of utmost importance but notoriously complex. It goes without saying that finding a new path in a multi-vocal innovation policy environment is no joyride. Instead of leading Finland to a more sustainable future, the layered and drifted policy rationales and related instruments may also lead to a dissipating innovation policy. If innovation policy is everything to everyone, is it nothing to anyone anymore? Will it become a forum for endless political debates, making policy short term and fragmented, and thus precisely the opposite of what it was intended to do? Moreover, the conceptual ambiguity and underdeveloped theory so visible in the innovation policy of the 2020s may detach grand ambitions from specific ends and means, not to mention actions. The emerging policy rationales call for enhanced capabilities for leading the ecosystem and constructing supportive governance systems.

References Asheim, B., Boschma, R., & Cooke, P. (2011). Constructing regional advantage: Platform policies based on related variety and differentiated knowledge bases. Regional Studies, 45(7), 893–904. Autio, E., & Thomas, L. D. W. (2014). Innovation ecosystems: Implication for innovation management. In M. Dodgson, M. Gann, & N. Phillips (Eds.), The Oxford handbook of innovation management (pp.  204–228). Oxford University Press. Borrás, S. (2009). The widening and deepening of innovation policy: What conditions provide for effective governance? (CIRCLE Working Paper No. 2/2009). Lund University. Boschma, R., & Sotarauta, M. (2007). Economic policy from an evolutionary perspective: The case of Finland. International Journal of Entrepreneurship and Innovation Management, 7(2–5), 156–173. Bush, V. (2021). Science: The endless frontier. Princeton University Press. (Original work published 1945). Business Finland. (2021). Veturiyritysten ja -ekosysteemien rahoitus [The financing of engine firms and ecosystems]. Retrieved October 13, 2022, from https://

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CHAPTER 13

Higher Education Policy: Autonomy and Accountability Jussi Kivistö and Tea Vellamo

Introduction Over the past few decades, universities, as public organisations and societal actors, have been impacted by policies emphasising accountability measures and incentive systems, particularly in the context of new public management (NPM)-inspired governance reforms. At the same time, financing higher education has been one of the key issues in higher education policy. Nordic higher education policies have developed following similar or even identical policy paths, as manifested in the NPM-oriented higher education policy reforms in all the Nordic countries. This is no surprise, since policy convergence is more likely for countries that are characterised by high levels of institutional similarity with a tendency to implement policies fitting with the existing culture, socioeconomic structures and institutional arrangements (Kivistö et al., 2019; Knill, 2005).

J. Kivistö (*) • T. Vellamo Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_13

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As a policy instrument, performance-based funding (PBF) has gained popularity among higher education policymakers, reflecting their wish to encourage the achievement of the (national) policy goals set for higher education. Countries differ when it comes to the number and type of indicators included in the funding formulas, as there is variation in policy goals and in the approach to steering higher education systems (ICF-CHEPS, 2022). PBF is often considered a tool to increase system-level awareness of policy objectives for higher education, which again supports institutions’ accountability to resource-providing stakeholders, the state and the general public. Indeed, performance indicators manage and control academic work by making visible and subjecting academic activities to external evaluation, and they can be designed to advance the agenda and implement the policy (Barnetson & Cutright, 2000). Moreover, PBF often aims to increase clarity, transparency and fairness in funding in contrast to less-transparent allocation methods, such as negotiated, incremental, historical and ad hoc funding (see Kivistö & Kohtamäki, 2016; Ziegele, 2013). More specifically, the chapter contributes to the discussion on PBF versus trust and the role of higher education in the public sector (competitiveness, innovativeness, competencies, knowledge base, social equality, etc.). The chapter starts by introducing the administration and policy of Finnish higher education and then moves on to discuss NPM in the context of higher education. We introduce the use of steering instruments and the PBF model in the Finnish higher education system in Sect. “New Public Management in the Public Sector and in Higher Education”, after which we discuss the equilibrium of autonomy and accountability in higher education governance and how PBF has affected these. We conclude the chapter by reflecting on the findings in the broader Nordic context of public administration and suggest possible future scenarios for the Finnish higher education sector.

The Finnish Higher Education System and Policy Despite the history of private universities and higher education institutions (HEIs), Finnish higher education has been part of the public sector and was historically heavily regulated through governmental steering based mainly on state funding. Since the 1960s, higher education has been built on the ideals of the welfare state, including inclusion and equality, and a more systematic higher education policy under the Ministry of

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Education was developed, spanning both public and private institutions (Välimaa, 2019). These political values led to the expansion and regionalisation of the university system. Education was considered politically as a key vehicle for promoting social equality, despite one’s social background or place of residence. Education policy was thus central to building the Finnish and Nordic welfare states. However, education was also seen to support economic policies and the development of industry (Välimaa, 2019). Higher education has been affected by the public sector reforms in Finland, but there have also been reforms particularly targeted at the sector. The massification of higher education required governance actions in the late 1960s, but reforms were delayed due to prolonged political disagreements. Higher education policy was reformulated in the late 1980s, with a profound change in policy implementation instruments and an output-based steering model (Hölttä & Rekilä, 2003). Another round of higher education reforms was witnessed in the 1990s, when the deep recession also affected higher education. The need to cut down public expenditure and increasing demands to save costs further emphasised the need to steer higher education towards cost-effectiveness (Risku, 2014). This is also considered the time when NPM became a dominant ideology in public organisations and higher education. The 1990s also witnessed the introduction of universities of applied sciences, further widening access to higher education through an attempt to improve the competence level of the Finnish workforce (Välimaa, 2019). At that time, research and innovation policies linked to higher education were gaining a foothold in the development of the nation through urbanisation from a rural society into a knowledge-based society (on innovation policies, see Chap. 12 in this volume). Since Finland joined the European Union in 1995, European and global higher education policies, particularly the Bologna Declarations (Tjeldvoll, 2008), have had a more significant effect on Finnish higher education, and several reforms have been carried out to better comply with the European Higher Education Area (EHEA) and to better respond to demands linked to globalisation more generally. Since the early 2000s, Finnish higher education policy has moved on from a national endeavour linked to nation building and entered an era of globalisation and competition in research and in the education market. In the 2000s, the Finnish government initiated a structural, judicial and financial reform of higher education, culminating in the new legislation that came into force in 2010.

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Universities became independent judicial bodies, thus separating them from the public administration system (Tjeldvoll, 2008); however, this did not significantly affect their dependence on governmental funding. The current steering model of higher education is based on financial steering by the government and focuses heavily on results instead of inputs.

New Public Management in the Public Sector and in Higher Education The core elements of NPM, as defined by Diefenbach (2009), are bringing business-like strategic objectives and corporate culture to public management and into organisational structures, as well as management employing performance management and measurement systems. The justification for NPM is based on the pressing need to reform public organisations so that they are able to respond to the changing environment of globalisation and neoliberalism (Diefenbach, 2009). In the context of higher education policy, these transversal trends are also linked to the Bologna Process, the Higher Education Modernisation Agenda of the European Commission and the aims set by organisations such as the OECD and the World Bank (Pinheiro et al., 2019), which feed into the NPM reforms (Kanniainen et al., 2021). As an international trend in public administration, NPM reached Finland in the late 1980s and early 1990s, when NPM-type reforms were implemented particularly during the years from 1987 to 1995 both in state government and municipalities. The most important aspects of these reforms were the privatisation of public property, turning many of the state agencies into publicly owned companies and introducing performance-­based management principles (see also Chap. 8 in this volume) and funding (e.g. Temmes, 1998). For universities, the impacts of the NPM reform have been more gradual, including several cycles of reforms over the past 25  years. Nevertheless, the core of NPM-related policies in higher education has been to adapt private sector management practices and methods into more traditional academic leadership and decision-­making practices. This includes the professionalisation of management (e.g. full-time deans), the legal privatisation of universities and the broadening of institutional and financial autonomy (turning universities into private foundations), focusing on measurements of efficiency and effectiveness, introducing business-oriented management and planning

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models, creating competition through market and quasi-market arrangements and redefining students as customers rather than as junior colleagues (Kanniainen et al., 2021). These changes are particularly reflected in the practices of performance management and in the steering of higher education both in terms of internal and external processes, where external processes include the contracts between universities and the funder, and internal management in institutions refers to similar processes and methods used in managing academic staff (Hansen et  al., 2019; Kanniainen et al., 2021). There has been strong criticism of NPM and its effects on higher education as a public service. However, there have also been some claims that NPM as a policy umbrella is not so ‘new’ anymore and it is and should be challenged by other forms of public governance. These emerging paradigms have highlighted aspects such as the service approach, networks and co-production in management. Although these forms of governance may exist in different contexts, and even within higher education, they do not seem to prevail over the system-level steering and management of higher education. New governance regimes are strengthened by PBF and institutional autonomy, which are two sides of the same coin, leading in the same higher education policy direction and enforcing one another (Hansen et al., 2019). From this vantage point, system-level policies are not only transforming the modes of governance but also the internal management structures of universities as organisations, and from a wider perspective, the whole ethos of higher education and research. These transformations have had a significant impact on the way universities operate. In the following, we focus on these two aspects and their interconnections in the Finnish context.

The Finnish System, Policy Instruments and the Performance-Based Funding Model Finnish national legislation, particularly the Universities Act, which was completely reformed in 2009 and 2010, has a strong regulatory impact on the Finnish university sector. This legislation determines many of the sector’s essential features, including the number of universities, their missions and tasks, governance and administrative structures and bodies and regulations related to academic staff and studies. Most importantly, the legislation determines the degree-granting rights of universities and the names

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and structure of the degrees. The Ministry of Education and Culture (MoEC) also uses information as a ‘soft law’ steering mechanism, which is not legally binding but is more of a persuasive tool. Concretely, information as a steering tool could take the form of policy recommendations, guidelines, statements and university-specific feedback and development suggestions. These play an important role because university non-­ compliance may, in some cases, have direct or indirect implications, resulting in the use of more binding and coercive policy instruments. The MoEC and universities engage in four-year performance agreements, which are a kind of hybrid between economic and information policy tools. Performance agreements set common objectives for the higher education system, key measures for each HEI, and define the tasks, profile, core areas and newly emerging scientific fields in each HEI, degree objectives and the appropriations allocated on the basis of these. The agreements also specify how the outcomes of the objectives will be reported (MoEC, 2022). The Finnish MoEC currently applies one of the most performance-driven funding models in Europe, with only Denmark using a model in which the allocation of core funding is more strongly based on performance (proportion of PBF, 85%) (ICF-CHEPS, 2022). The current Finnish university funding has three different components and their subcategories. The model rests on a funding formula split mainly between education (42%) and research (34%). Both parts are performance-­ based because they are composed nearly exclusively of output-related criteria. Masters’ degrees make up 19% of the overall model, with funding capped at an agreed target. Bachelors’ degrees account for 11% of the funding. For degree numbers, coefficients are applied that consider cost differences in different educational fields and reward faster graduation times. Other indicators for education include graduate employment and tracking, student feedback and continuous learning (MoEC, 2022). The research component is made up of doctoral degrees (8% of the whole model), scientific publications (14%) and competitive research funding, distinguishing between international and national/corporate funding (12%). The remaining part of the financing for universities (24%) is allocated on the basis of university strategies, which are formulated together with the ministry and each institution. Additionally, the national tasks and duties of the universities are taken into consideration in central government funding for universities. The ‘strategic development’ component of the funding (equalling 15% of the block grant) has two parts: the first relates to institutional strategy implementation, while the second is

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linked to ‘national education and science policy aims’, giving the government additional steering power. In 2021 and 2022, the government’s goals with this part of the funding were to subsidise the costs of an increasing number of students and strengthen international networks (MoEC, 2022). The current model is the outcome of a long historical trajectory of continuous development towards a stronger performance orientation. The model has been incrementally modified by changing the percentages allocated to each criterion, with new indicators being added and also some old ones being abolished. Compared to the previous model of 2013, the main changes have been the increased weighting on bachelors’ and masters’ degrees. The importance of lifelong learning and employment upon graduation has also increased. In research, the importance of publications and acquiring external competitive funding have been emphasised. Whereas a significant omission has been directed at indicators related to internationalisation, where indicators of student exchange, foreign graduates and staff have been abolished from the new PBF model. The objective of using PBF is twofold. First, PBF can be viewed as a tool to mediate the goal-setting and productive behaviour of universities and, at the same time, increase institutional awareness of policy objectives for higher education. Second, PBF can also be seen as a mechanism both for increasing accountability and fostering HEIs’ performance by offering the economic motivation to do so. Analytically speaking, the two policy rationales of improving the level of university performance and holding universities accountable for the resources are not, by definition, mutually inclusive, as PBF is expected to reduce potential or actual goal conflicts by aligning the strategic priorities of universities with the policy goals of the state/government and therefore to offer more straightforward incentives for productive behaviour (Kivistö & Kohtamäki, 2016).

Balancing Autonomy and Accountability The level of appropriate government involvement in the management and governance of universities and the balance between public accountability and institutional autonomy have been topical issues in Finnish higher education policy since the early reforms relating to a stronger performance orientation in the 1990s. Finland has a strong tradition of being a Nordic welfare state, which also influences the relationship between the state and universities. Currently, Finnish universities enjoy relatively high levels of

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organisational, academic and staffing autonomy compared to other European countries (Pruvot & Estermann, 2017). This is highlighted by the fact that the autonomous status of universities is guaranteed at the level of the Constitution, which is uncommon in many other European countries (see Hallberg et al., 2021). Through the PBF model, universities are held accountable to the public. There are, however, different dimensions of how universities are held accountable. Legal accountability is linked to whether the university is doing what is required of it by law, and financial accountability refers to universities’ obligation to report how public funding has been used. There is political accountability, referring to the relationship between the MoEC and the institutions, and managerial accountability, which relates to monitoring outputs (Hansen et al., 2019; Kivistö et al., 2019; Trow, 1996). In many European countries, as in Finland, strengthened accountability has paradoxically gone hand in hand with reforms aiming to increase the level of institutional autonomy in universities. To be more specific, this is paradoxical in the sense that increases in autonomy are often directed towards increasing the regulative capacity of institutions and individuals (academic freedom), thereby making the interference and regulative control by external actors more difficult. Institutions universally desire to uphold their rights and capacities for self-governance and exempt themselves from excessive interference from the government and other external entities. However, accountability in all its forms implies outside interference, and the intensification of accountability is often at odds, at least to some extent, with different aspects of institutional autonomy (Huisman, 2018; Kai, 2009; Kivistö et al., 2019; Kivistö & Mathies, in press). This is reflected in the changes in universities, where internal steering and management have taken on more managerial forms linked to NPM. To reach the performance targets set by the MoEC, universities have intensified monitoring outputs and have introduced ways to ensure performance. However, from the government’s perspective, institutional autonomy is valuable because it allows universities to adopt adequate managerial tools to respond to PBF incentives, as it is assumed that increased autonomy will stimulate intra-organisational engagement, creativity and adaptability to local characteristics, which again will boost organisational efficiency and effectiveness (Aghion et al., 2010; Verhoest et al., 2004). Furthermore, the authority of institutions to manage themselves (the professionalisation of managers) is expected to also have positive effects on issues such as institutional strategic behaviour and profiling, system diversity, the

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socioeconomic responsiveness and relevance of universities and the quality of the university’s primary processes of teaching and research (Goedegebuure et al., 1994; Maassen et al., 2017). However, a frequently neglected insight is that by granting universities a greater level of autonomy, governments often pass the risk of failing research productivity on to the universities via the PBF, without compensating them for the risk premium they must bear. This occurs, in particular, when the introduction of PBF schemes merely changes the mode of resource allocation without injecting any extra money into the system (Kivistö & Mathies, in press). In the context of PBF, autonomy is therefore instrumental in the sense that it is given for the purpose of increasing the institutional capacity to fulfil accountability demands. This instrumental institutional autonomy may very well result in, for example, tighter strategic leadership and managerial control leading to a restriction of ‘academic freedom’ and autonomy at the faculty, programme or teacher/researcher levels. At all levels, autonomy is thus restricted mainly to deciding how to live up to demands defined elsewhere. At the same time, PBF has been criticised for focusing on quantity rather than quality, and the measured outcomes are at least partially at odds with larger higher education strategies. In addition, the changes in the performance-­ based criteria have spurred criticism of not encouraging long-term planning, but the optimisation of the indicators being measured. The reasons linked to the development of NPM and the increased focus on performance can be considered as a lack of trust in universities from the side of government funding (Hansen et al., 2019; Maassen, 2014). As the trust factor between the ministry and universities has dwindled, it has been replaced with more contractual and instrumentalist relations, where PBF plays a crucial role in many higher education systems.

On the Impacts of Performance-Based Funding as a Policy Instrument Despite the popularity and widespread attention to PBF across European higher education systems, relatively little is still known about the impacts of PBF on the behaviour and performance of universities (De Rijcke et al., 2015; Kivistö & Kohtamäki, 2016). Existing research on the impact of PBF is rare and sometimes conflicting due to different types of PBF and their diverging goals (ICF-CHEPS, 2022).

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Higher education systems are multi-layered in the sense that funding measures implemented at the level of the policymaker pass through various organisational layers (university leadership, department/school, chairs) before they reach the level of lecturers, researchers and staff members. It is particularly unclear regarding to what extent the level of alignment of external and internal incentives influences the performance of universities. It is presumed that the internal incentive structures should be compatible with and aligned with the incentives attached to the external revenue streams of the university. This alignment is important because it is expected to have a direct impact on the awareness and behaviour of organisational subunits and individuals, thus leading to a higher level of productivity (Arnhold et al., 2018; Kivistö & Mathies, in press; Ziegele, 2008). The inability to attribute performance changes to the funding system is due to the fact that one cannot isolate the effects of PBF from the effects of the governance system as a whole. Furthermore, the difficulty of attributing changes in performance to a specific policy instrument is due to the fact that complex internal dynamics are related to academic work. For instance, disciplinary cultures interact with local, national and international incentive structures, where reputation and prestige play a big role. It is also unclear whether the amount of funding (low level vs. high level) attached to PBF is one of the issues affecting the impacts resulting from a PBF system, although the share of PBF is not the only factor contributing to impacts. In other words, even though system-level studies would be able to show performance patterns changing towards the goals stressed by the system’s incentives, they have not been able to demonstrate why and how this actually occurs within universities. Studying the direct causation between changes in publication patterns and the internal use of PBF would require the use of a well-designed quasi-experimental research setting with appropriate controls (see, e.g., Hillman et al., 2014; ICF-CHEPS, 2022; Kivistö & Mathies, in press; Tandberg & Hillman, 2013). Several studies on performance funding in Europe have found evidence that it has led to higher rates of faculty research productivity. This is the case in Denmark, the Netherlands, Norway, Switzerland, the United Kingdom and Hong Kong (Dougherty et al., 2016). These studies typically found an association between the advent of PBF and improved research productivity, although given the absence of counterfactuals, they cannot directly prove causality (Dougherty & Natow, 2019; Mathies et al., 2020). However, even if it is difficult to find a control that enables an evaluator to prove causality, there are cases where benchmarks and

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other information suggest that the association between the introduction of the performance element and performance improvement is significant and more than coincidental. Nevertheless, alternative causal factors that may have contributed to the observed changes in performance are still, to a large extent, unknown and would have to be investigated empirically (Sı ̄le & Vanderstraeten, 2019). Similarly, studies both in the United States and Denmark found evidence of improved instructional effort in response to performance funding; institutions tend to increase their spending on instruction and make improvements in their programmes and services. The most common changes are reshaping developmental education, improving course articulation and transfer, and revamping advising and counselling services (Dougherty et al., 2016; Jongbloed & Vossensteyn, 2016), as well as data analytics and academic advising services, in an effort to improve student success. On the other hand, while the efforts of HEIs may be a response to PBF, it appears to have little measurable effect on aspects such as graduation rates (Dougherty & Natow, 2019). Empirical evidence from Europe and the United States also suggests that performance funding has limited effects on student completion (Bell et  al., 2018; Jongbloed & Vossensteyn, 2016). In the Finnish context, although the performance-based model has already been effective for almost two decades, there is relatively little research evidence regarding to what extent and how it has affected universities. So far, only one slightly more comprehensive study has been conducted by Seuri and Vartiainen (2018), who analysed the development of university performance (2010–2016) rewarded by the PBF model at the system level. They found that the PBF model increased universities’ awareness of the measured performance and that performance increased steadily on those outputs that were measured and rewarded in the PBF formula. However, they did not compare differences between universities and did not study the causes of the observed increase in performance. At the time of writing this, the MoEC has commissioned ‘Evaluation of the governance and funding practices used by the Ministry of Education and Culture for steering Finnish HEIs’ to be conducted by the Technopolis Group. The evaluation will attempt to explore to what extent and how the MoEC’s funding and governance practices influence HEIs’ strategies, educational and research priorities, leadership, internal resource allocation, partnerships and co-operation arrangements or human resource policy. The results of this evaluation will be communicated in May 2023.

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Conclusion: Competition Versus Trust? PBF and accountability and the focus on outcomes and their monitoring can be considered manifestations of NPM. The adoption of the PBF model in Finnish higher education was based on the assumptions of its effectiveness in ensuring desired outcomes and in increasing accountability and efficiency; however, there is still a lack of knowledge on its actual effects on universities and particularly on their internal management. It would be important to study NPM effects in a systematic manner by looking into the causalities in system-level and institutional-level internal management. PBF models are based on the assumption that universities are either unable or unwilling to be goal-oriented and productive if they do not appropriate economic incentives to do so. In a way, we can look at PBF as a system of control and/or a sign of mistrust rather than as a positive or encouragement mechanism, especially when the proportion of PBF constitutes a significant part of universities’ total funding. The Finnish PBF model is one of the most performance-oriented funding models in Europe. Given a recent comparative study, only Denmark allocates (85%) more using PBF than Finland (ICF-CHEPS, 2022). Against this background, it is somewhat surprising that Finland is considered one of the so-called most trust-based societies in the world, where people are expected to follow ethical principles regardless of whether this is rewarded or not. Isolating the impacts of the PBF model continues to be one of the future challenges in many countries using PBF. This is somewhat surprising, since, in many countries, PBF has already been implemented a long time ago. More and better studies on the impacts of PBF are needed in the near future because only the empirically acquired knowledge would allow PBF to be developed along the lines of an evidence-based improvement.

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CHAPTER 14

Education Policy in Finland: Varying Approaches for Addressing Injustices Maiju Paananen, Jaakko Kauko, and Saija Volmari

Introduction The Nordic welfare state aims for societal well-being for the population as whole. In this task, education has been seen as a key instrument for increasing equality and social justice (Arnesen et  al., 2014; Lundahl, 2016). Hence, the aim of diminishing injustices has been one of the key principles of education policy in Finland. This education policy aim is shared among all Nordic countries, but after the turn of the millennium, differences emerged. While Finland, alongside Norway, has maintained a state-run education system in compulsory education, Sweden and Denmark have allowed publicly funded private education (Dovemark et  al., 2018). Globally speaking, the Finnish education system is in the minority, with its philosophy of pursuing equality in education by avoiding models that

M. Paananen (*) • J. Kauko Tampere University, Tampere, Finland e-mail: [email protected] S. Volmari University of Helsinki, Helsinki, Finland © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_14

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create comparison and competition between individuals and institutions (Kauko et al., 2022). This has been considered in some scholarly and public discussions as a sign of a just education system. When discussing the aim of diminishing injustices, it is important to note that the concepts of equality, equity and social justice do not translate directly into the Finnish language. Instead, their translations (tasa-arvo, yhdenvertaisuus and oikeudenmukaisuus) are used rather interchangeably. Regardless of this, approaches to injustices in different national contexts, educational sectors and different historical times are far from unanimous. Thus, the Finnish case provides an interesting case for examining the variation in and tension between approaches to addressing injustices. This variation is the focus of this chapter. We will use the terms ‘justice’ and ‘injustice’ as umbrella terms. One of the main tensions has been between conservative and liberalist approaches to injustices. According to Kalalahti and Varjo (2012), the conservative talent-based view refers to an approach that views differences between individuals as inherent and natural, and inequalities as necessary for both economic growth and social order. The liberal approach directs the focus to the rights of the individual. This view recognises that not all the differences between individuals are inherent and natural, but that there are, for example, geographical and socioeconomic disparities that need to be taken into account when aiming to achieve a just system (Kalalahti & Varjo, 2012). However, within the liberalist approach, there is variation related to how these disparities should be handled. The welfare liberalist view suggests removing the barriers the disparities might cause, and the new liberalist view focuses on compensating for disparities using targeted measures (Kalalahti & Varjo, 2012). Examining the historical changes in primary and lower secondary education policies reveals that the approaches to addressing injustice have departed from the conservative talent-based view since the comprehensive school reform in the 1960s and 1970s and have leaned towards liberalist approaches (Kalalahti & Varjo, 2012). In sum, we can identify a historical variation in the approaches to addressing injustices in education policy in Finland. However, the variation in approaches to deal with injustices is not only historical and time-related but also sector- and place-specific. In this chapter, we will examine the variety in the approaches that Finnish education policy takes in curbing injustices. We will use Nancy Fraser’s (2020) work on remedies for injustice in this task.

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As a general background, we start by introducing the three-tiered administration of Finnish education. We then bring the Finnish education system into the discussion with Fraser’s account of injustice and, consequently, possible remedies for it. We will take a closer look at three examples: the extension of compulsory education, changes in the entitlement to early childhood education and care (ECEC) and changes in the national core curriculum guidelines in primary education. By examining the extension of compulsory education, we show how recent education policies continue the long trajectory of educational policy that has been built on the idea of addressing injustices with redistributive remedies. Changes in the entitlement to early childhood education show how the history of ECEC as primarily a labour and social policy tool allows for more fluctuation between different approaches to curbing injustices compared to compulsory education and how strong municipal autonomy enables flux. The example of changes in the curriculum guidelines shows how Nancy Fraser’s analytical differentiation between redistributive remedies and remedies aimed at recognition helps in gaining a more nuanced view of contemporary approaches to addressing inequalities in education policies in Finland.

Introduction to the Three-Tiered Administration of Finnish Education The administration of Finnish education is three-tiered: it consists of the national-level bodies, namely the parliament, the government and the Ministry of Education and Culture; the regional body, namely the regional state administrative agencies; and local-level bodies, namely municipalities, which have the main responsibility for the provision (See Chap. 6 in this volume). This chapter focuses on education policy from early childhood education (0–6-year-olds) to primary and lower secondary education (7–15-year-olds). ECEC officially became part of the education system in 2013. It was transferred back to the jurisdiction of the Ministry of Education and Culture after being under the ministry responsible for social and health affairs for 90  years. In Finland, entitlement to ECEC begins after parental leave when a child is approximately ten months old and lasts until a child enters primary education in the year they turn seven. All children whose parents wish so are entitled to a place in an ECEC centre. ECEC is mainly public, although the share of private ECEC is growing; the share of private provision has increased from 11% to around

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18–19% in 20  years (Finnish Education Evaluation Centre [FINEEC], 2019). Primary education in Finland refers to the first six years (grades 1–6) of basic, universal education in a nine-year comprehensive school system, which is meant for children aged between 7 and 16 years. Lower secondary education in Finland includes the last three grades (7–9). The combination of primary and lower secondary education is referred to as comprehensive education in this chapter. Of the little less than 2200 comprehensive schools, the vast majority are provided by municipalities. The share of private provision concerns only 72 schools (Statistics Finland, 2022). Moreover, they are mainly run with public funding. These schools often have a religious or pedagogical emphasis, such as Steiner. Their establishment requires special permission from the government. Both primary and lower secondary education are provided to pupils for free. This includes free-of-charge learning materials, daily meals, health and welfare services and transport from home to school if the distance from home to school is long. In this regard, ECEC policy diverts from comprehensive education policy. Municipalities and private providers can collect ECEC fees. The fees in the public sector are determined based on the income and the size of the family. At the national level, education policy is defined by parliament and the government. In addition, they are in control of the funding, which constitutes an important part of the municipal economy. The Ministry of Education and Culture and the Finnish National Agency for Education are responsible for implementing education policies. The Ministry of Education and Culture prepares legislation, governmental decisions, and general strategy regarding education. The agency is responsible for developing curricula guidelines and for providing support, such as materials and training for organisers of education to implement education policies. In addition, it maintains registers related to education. At the regional level, regional state administrative agencies draw up regional development plans in co-operation with the local authorities within their respective regions. They also handle complaints and assess rectification requests. The allocation of funding, drawing up the local curricula and the recruitment of personnel are the responsibility of the local administration. Municipalities are obliged to organise ECEC services and primary and lower secondary education. In addition, they subsidise ECEC

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services organised by private operators, and they can purchase ECEC from private operators and top up subsidies for private ECEC operators. The division of work between these three levels of administration is a result of the decentralisation and deregulation that took place in the 1990s (Simola et al., 2013; Varjo, 2007). The change increased the autonomy of municipalities. In the change, teachers maintained their relatively strong autonomy, which has been one of the central features of Finnish education policy (Säntti & Kauko, 2019). In sum, there are two important features of the Finnish education system that we need to pay attention to when trying to understand the varying approaches to addressing injustices: the separate historical trajectory of ECEC and the comprehensive education system and strong municipal and teacher autonomy.

Affirmative and Transformative Remedies for Addressing Inequality In this chapter, we will introduce philosopher Nancy Fraser’s conceptual work related to injustices to unravel the variety of approaches that Finnish education policy has taken to address them. Fraser (2020) proposed analytically distinguishing between two understandings of injustice. These are socioeconomic injustice and cultural or symbolic injustice. Socioeconomic injustice is rooted in the political–economic structure of society, and it could entail, for example, educational marginalisation, such as being denied access to education. Cultural or symbolic injustice is rooted in social patterns, such as being routinely disparaged in stereotypic representations. In practice, these two understandings of injustice are inseparable. Economic injustice has constitutive, irreducible cultural effects and conversely, discursive cultural practices have a constitutive, irreducible political-­economic dimension. For example, the way in which a person is discursively positioned in society influences the possibilities for socioeconomic mobility. However, Fraser (2020) has pointed out that remedies suggested for injustices do not always recognise the inseparable nature of the two types of injustices. Socioeconomic injustices are often addressed with redistributive remedies—the redistribution of socioeconomic resources. Cultural and symbolic injustices are often addressed with recognition remedies, such as recognising and having concepts for differences and calling

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attention to the marginalised group to make it recognised and heard. If the inseparable nature of injustices is not recognised and remedies remain separated, we will fail in our attempts to address injustices (Fraser, 2020). Consequently, Fraser (2020) suggests an alternative conception of remedies that cuts through the redistribution–recognition division: affirmative remedies and transformative remedies. By affirmative remedies for injustices, she means ‘remedies that are aimed at correcting inequitable outcomes of social arrangements without disturbing the underlying framework that generates them’ (Fraser, 2020, p.  82). Affirmative remedies for political-­economic injustices aim to redress the maldistribution of the end state while leaving the underlying political-economic structure intact. When reflecting on the earlier notions by Kalalahti and Varjo (2012) related to education policy approaches to addressing injustices, it could be concluded that the new liberalist approach can be viewed as an example of the promotion of affirmative redistributive remedies. Such remedies provide needed aid, but, at the same time, they create antagonistic group differentiations. Transformative remedies, in contrast, redress unjust distribution by transforming the underlying political-economic structure (Fraser, 2020). They therefore typically include, for example, a universalist social welfare system, progressive taxation, accessible public services, and democratic decision making about basic priorities. The approach Kalalahti and Varjo (2012) call a welfare liberalist approach focuses on ensuring universal access to good-quality education for all and can be viewed as an example of a transformative remedy that addresses political-economic injustice. Transformative remedies aim at reducing inequalities without creating stigmatised classes of ‘vulnerable’ people. The core differentiation between these two types of remedies is whether the focus is on outcomes (affirmative remedies) or on the processes that produce them (transformative remedies) (Fraser, 2020). Affirmative remedies that address cultural injustices would aim to redress disrespect towards a certain group of people by revaluing devalued group identities while leaving the group differentiations that underlie them intact (Fraser, 2020). In education, this could be, for example, programmes related to multiculturalism that aim to increase ‘tolerance’ or ‘charitable attitudes’ towards marginalised groups or programmes that aim to increase girls’ interest in science, technology, engineering and mathematics. This could also mean positioning some groups of children or young people as ‘vulnerable’ and aiming to support their individual

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competences (see Brunila & Rossi, 2018). Transformative remedies, by contrast, aim at transforming the underlying cultural-valuational structure, destabilising existing differentiations and changing everyone’s sense of self. This could involve, for example, changing the discourses and practices related to gender—how gender is portrayed in the curriculum and educational practices: instead of reproducing gender stereotypes, transformative remedies would aim at transforming the ways in which gender categories are being portrayed. Fraser’s conceptualisation of affirmative and transformative remedies resonates with earlier attempts to conceptualise the change in how injustices have been addressed in education policy. Yet, we suggest that Fraser’s conceptualisation helps in gaining an even more nuanced picture of the changes and differences between ECEC policies and comprehensive school policies. We will focus on three policy changes that took place after the 2000s: the expansion of compulsory education, the changes in the entitlement to ECEC and changes in the core curriculum of primary education.

Universal Provision: Transformative Remedies Addressing Socioeconomic Injustices A long-term focus of basic education policy has been on curbing socioeconomic injustices. It has been tightly coupled with the idea that such a policy supports economic growth. This coupling has possibly emphasised the focus on socioeconomic injustices rather than on cultural injustices. The founding of comprehensive schools in 1968 institutionalised the main transformative remedy method of redistribution: universal school provision required the removal of deeper politico-social obstacles. This led, for instance, to the de facto abolition of private schools (Ahonen, 2012). Compulsory education was broadened to upper secondary schools in 2021, which followed the same logic of universalism. It could thus be argued that transformative remedies for socioeconomic injustices have had a longer historical trajectory that has been sustained over time. The Programme of Prime Minister Antti Rinne’s, later PM Sanna Marin’s (2019–2023), centre-left government, defined how ‘[a]n equal society seeks to provide opportunities for every citizen to study to their full potential’ (Finnish Government, 2019, p. 174). Secondary education is described as a minimum requirement for involvement in modern

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working life. The concrete means to do so is to expand compulsory education until the age of 18, which in practice means secondary education for all (Finnish Government, 2019), and Government Bill 173/2020 was issued. These changes affect many different laws, and their additional foci, in addition to raising the compulsory school age, are enhancing guidance specifically during transfers and ensuring that provision is free of charge (including, e.g., books) (Government Bill 173/2020). After lengthy public and parliamentary debates, the law took effect on 1 August 2021. This change can be described as historical. It not only expands schooling, but also the universal principle of it. The reformed policy is a transformative remedy as it makes education free for upper secondary education. Upper secondary education did not have fees, but prior to the reform students were required to buy books or professional equipment. In addition, the legislative change is transformative as it overcomes the challenge caused by the strong deregulation. Typically central government has only little means to control local level. This reform has a strong effect as it uses a strong policy tool, namely, legislation, in a way that leaves very little room for varying interpretations.

Flux Between Affirmative and Transformative Redistributive Remedies in Early Childhood Education ECEC in Finland has developed partly separately from other parts of the educational sector, as, in national policies, it was considered part of the social welfare system until 2013 when it was transferred to the jurisdiction of the Ministry of Education and Culture. The separate lines of development have resulted in partly differing approaches to addressing inequalities in comparison with comprehensive education’s tradition of focusing on transformative socioeconomic remedies. ECEC policies have contained more affirmative, targeted elements compared to comprehensive school policies. For example, ECEC is not completely free of charge for families, but fees are dependent on the income and the size of the family. When we examine the approaches used in ECEC policies for addressing injustices, we can identify a flux; that is, an alternation between affirmative and transformative redistributive remedies. We use the case of entitlement to ECEC to illustrate this.

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Before the 1990s, policy discussions concerning ECEC in Finland mainly focused on ECEC’s role in enabling parents to participate in the workforce. Interest in ECEC arose from labour-market policy goals, such as increasing employment rates and gender equality (Mahon et al., 2012). In addition, ECEC had a strong social policy focus. In Finland, from 1996, all children under school age received an unconditional entitlement to attend full-time ECEC provided by local authorities. Prior to that, the entitlement was needs-tested; that is, the remedies were affirmative and focused on redistribution. Granting entitlement for all can be seen as a transition towards transformative redistributive remedies—remedies that do not uphold existing cultural group differentiation, such as, in this case, employed/unemployed or at risk/not at risk. Rather, the ECEC service was available for all families without the need to justify its use. In 2016, Prime Minister Juha Sipilä’s centre-right government (2015–2019) enforced legislation that allowed municipalities to limit ECEC entitlement to 20 hours per week (Government Bill 80/2015). Full-time ECEC was restricted to children with employed parents or to children whose parents studied full-time. Full-time ECEC was still guaranteed if the child was believed to benefit from it for special social or developmental reasons. In sum, partial needs testing was re-introduced. This meant a shift from a transformative to an affirmative remedy. Paananen et al. (2020) have argued that the shift was possible, especially because of ECEC’s recent history as an important social policy tool. Historically, ECEC services in Finland have been targeted, on the one hand, at ‘vulnerable’ families to socialise their children into a middle-class lifestyle and, on the other hand, at families in which parents need to participate in the labour force (Meretniemi, 2011). Policymakers across the political spectrum have had a shared (yet erroneous) view on families being ‘vulnerable’ or ‘in a need of intervention’ when their children attended ECEC, and the parents did not work or study full time (Paananen et al., 2020). However, due to municipal autonomy (Local Government Act 365/1995), the municipalities had the right to decide whether to enforce the restriction or not. Some municipalities used the opportunity to limit the entitlement in full, some provided more than the minimum number of hours but still limited the entitlement and some did not enforce the restriction at all. In 2017, 63% of the municipalities enforced the restrictions. Therefore, the logic of the remedies—approaches to curb injustices—varied amongst municipalities: some municipalities utilised an affirmative

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approach, as families needed to apply for full-time entitlement (Paananen et al., 2019) and justify the need for that, and others continued leaning on transformative remedies where full-time entitlement was available for all families. A backlash against the restrictions resulted in their abolishment in 2020. Prime Minister Sanna Marin’s government dropped the needs testing and the universal entitlement to full-time ECEC was restored. This again meant a change in the approaches to curb injustices: Redistributive remedies were turned back into transformative remedies. The flux between affirmative and transformative remedies has been possible due to the ECEC’s history of being part of the social service sector, where needs testing has been more common compared to the educational sector. As a result, ECEC policies have contained more affirmative, targeted elements compared to comprehensive school policies.

Transformative Recognition: Changes in the Core Curriculum in Primary Education Remedies in education policy in Finland have widely focused on the redistribution of resources. As shown in the earlier chapters, these remedies have taken, for example, the form of universal, free-of-charge access policies. In recent years, however, we can recognise a change related to remedies that more directly address the injustices related to recognition. As an example, we will present changes related to the National Core Curriculum (NCC) in Primary Education. Since the decentralisation and deregulation phase in Finnish comprehensive education policy in the 1990s (Simola et al., 2017; Varjo, 2007), the NCC and the legislation have become one of the few remaining steering instruments at the central government’s disposal. The NCC is renewed in ten-year cycles. The last two reforms took place in 2004 and 2014. The Basic Education Act (1998/628) dictates that basic education in Finland is required to promote equality in society, advance pupils’ ability to achieve continuous and life-long learning and guarantee sufficiently equitable treatment in education across the whole country. In the public debate, remedies for symbolic injustices have traditionally been focused on gender (Laiho, 2013). In education, this has often translated into gender neutrality, in which the impact of gender is smoothed down or muted (Lahelma, 2011) or into a categorisation of boys and girls

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into separate groups (Lahelma, 2014). These approaches do not address symbolic injustices; rather, they ignore them. In December 2014, the 1986 Act on Equality Between Women and Men (Laki naisten ja miesten välisestä tasa-arvosta 8.8.1986/609) was revoked. The new Act obliges education providers to actively promote gender equality in teaching, and the definition of sex and gender is broadened to mean one’s own perception of them. This change coincided with the most recent NCC reform and influenced the national objectives and content of the 2014 NCC (Finnish National Agency for Education, 2014). A new goal of addressing symbolic injustice with recognition remedies, and beyond that, transformative remedies, can be identified. Myyry (2020) carefully reported this change. She identified a shift in equality discourses. While in the 2004 NCC the discourses on gender neutrality and gender specificity produced and maintained the binary gendered structures, practices and language in comprehensive schools, the 2014 NCC challenges these with a new gender-awareness discourse. While in 2004 NCC basic education was perceived as an institution that in itself produced equality, the 2014 NCC acknowledges that schools can potentially produce injustices. Within this new discourse, the aim, as Lahelma (2014) points out, ‘is not only to promote gender equality in education, but also through education’ (p. 178). Therefore, we can recognise a move towards transformative remedies that include the aspect of addressing symbolic injustices. The remedies to address injustice can most clearly be seen in Chap. 4 of the 2014 NCC. This chapter instructs on the construction of an inclusive school culture in Finnish basic education. In the 2014 NCC, school culture is one of the key areas of focus and the need to pay attention to school culture in order to address injustice is underlined. School culture is, according to the 2014  NCC, supposed to enhance learning, inclusion, well-being and a sustainable way of living. A school culture based on a sense of belonging, well-being and safety is expected to, for instance, prevent bullying, racism and any other form of discrimination and exclusion. School is described as a multiculturalism community in which different identities, languages, religions and world views live together and interact with each other. Furthermore, schools are supposed to build a school culture that promotes inclusion, respects human rights and is democratic (Finnish National Agency for Education, 2014). Tervasmäki (2018) points out that the definitions of equality in the 2014 NCC are contradictory, as they stress both individual and societal or liberal and egalitarian approaches at the same time. Although the goal of

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moving towards transformative remedies is clearly present in the 2014 NCC, it also uses discourses of human capital and lifelong learning within which equality is framed as an opportunity to build up each student’s individual human capital that can then be used as a resource in the labour market. Such thinking is rooted in the idea that opportunities in the Finnish education system are equal for all, and it is up to the individual to ensure that he or she benefits from it. This view does not contest the actual political-economic structure and thus resembles an affirmative rather than a transformative approach to remedies. Following the principle of municipal autonomy, the NCC provides a foundation and framework for drafting local curricula. Each municipality is obliged to develop a local curriculum drawing on the national curriculum. This obligation also applies to education providers in the private sector.  In the case of comprehensive educational remedies for economic-material injustices, meaning universal access policies, they seem to have overcome the strong deregulation: universal access policies are also enforced locally. In contrast, remedies for symbolic injustices might not be able to fully do so due to the contradictory approaches to addressing injustices in the NCC.  As municipalities have strong autonomy to elaborate and specify their approach in local curricula and, furthermore, as teachers have strong autonomy to implement such curricula, it seems clear that there will be local variations in terms of how symbolic injustices will be addressed.

Can Education Be a Remedy for Injustice? The possibilities of being able to address inequality largely depend on the structure of the welfare state, and more specifically, in our case, the educational administration and governance. In this chapter, we have argued that Finnish education policy does not have a unanimous approach to addressing injustices; rather, the approach has varied at different times (Kalalahti & Varjo, 2012; Myyry, 2020) but also between different educational sectors. Our analysis has shown how the three-tiered levels of administration and the separate trajectories of ECEC and comprehensive education, namely, ECEC’s history as part of social and labour market policies, contribute to the variation. This chapter argues that, in Finland, the overall focus is on transformative remedies addressing socioeconomic injustice in education at the macro level. Nevertheless, our analysis shows that differences exist between

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different fields of education policy. The approaches used in ECEC policies have moved between affirmative and transformative remedies; elements based on means testing have been introduced and then abolished. The approaches in comprehensive education have been more stable: universal access and public provision. As ECEC and compulsory education are currently both in the sector of the Ministry of Education and Culture, it will be interesting to see to what extent these differences will fade out in the future or whether they will continue along slightly different paths. There are also commonalities in ECEC and comprehensive education policies. It could be said that the approach to equality in the context of education policy in Finland has always had reductionistic elements; equality has been viewed as having instrumental value in both comprehensive education and ECEC. Historically, in terms of equality, the comprehensive school is argued to have harnessed all talent to boost economic growth (Kauko, 2019), while ECEC is argued to have either mitigated the risks of social exclusion and thus potentially saved future welfare spending or to have increased gender equality by allowing mothers to participate in the labour force (Paananen et al., 2019). The emphasis on instrumental values in education and care in Finland is the same as in global debates. On the one hand, we can argue that human capital and knowledge economy ideas have had an effect on how education is perceived. On the other hand, it could be said that educational institutions—such as preschools and schools—unavoidably reflect constructions of future citizenry, and thus education policies are inevitably instrumental. However, in Finland, the means to achieve the goal related to nation building, either harnessing all talent or saving future welfare spending and enabling the labour force to enter the labour market, have been placed in the egalitarian interpretative frame, which is often called the ‘Nordic model’. This frame has been sustained much more in Finland than in some other Nordic countries, for instance, in Sweden, where competition within the education system has taken root. The focus on transformative remedies that address socioeconomic injustices in Finland might have veiled the need to address symbolic injustices. As education has been accessible for all, we have not witnessed major alternative educational movements to the extent that they exist in some other countries. These movements, such as Socialist Sunday Schools in the United Kingdom and United States and Black Supplementary Schools in the United Kingdom, can be viewed as institutionalised discursive arenas that develop in parallel to the official public spheres (Fraser, 1990). These

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movements have typically aimed at challenging the inequalities embedded within state schooling by providing arenas for working-class (Socialist Sunday Schools) and Black (Black Supplementary Schools) families to have agency in educational decision making (Gerrard, 2014). These alternative movements have acted as accelerators of policy reforms aimed at addressing symbolic injustices (Gerrard, 2015). In Finland, education might have been viewed as ‘fair enough’ for the large majority due to universal education policies. This might have slowed down the development of alternative educational movements and emphasised the role of education as a White, Lutheran, middle-class institution (Riitaoja & Dervin, 2014). Universal policies that can be viewed as transformative remedies for socioeconomic injustices have, without a doubt, contributed to a fairer society. At the same time, the discussion on symbolic injustices, for instance, in relation to indigenous people, has been acknowledged in Finland later and perhaps with less rigour in comparison with some other countries (see, e.g., Schwab, 2018). One possible explanation might be the marginal role of institutionalised subaltern discursive spaces in the education system. Overall, our analysis shows that approaches to addressing injustices have not been stable or unchangeable. In addition to the separate historical trajectory of ECEC and the comprehensive education system, strong municipal and teacher autonomy contribute to the variation. We can assume that variation can be identified in local practices, both in ECEC and comprehensive education, especially in terms of the remedies for symbolic injustices. Earlier research shows that remedies for symbolic injustices are not as durable at the local level as universal access policies in comprehensive education in Finland. Transformative remedies in school-­ level practices have been promoted through countless projects funded by national, Nordic and European sources. These projects have seldom had any lasting impact (Brunila, 2009; Lahelma, 2011). Thus, in decentralised systems, finding ways to address symbolic injustices requires more work and perhaps more permanent resources. In addition, bringing local variation to the fore leads to new questions. Kalalahti and Varjo (2020) pointed out that there are a variety of universalisms within the Finnish schooling system. Aligning with their argument, we suggest that rather than trying to identify a ‘Finnish education policy approach’ to addressing injustice, there is a need to map local landscapes of education policy within which a variety of approaches to addressing

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injustice, both affirmative and transformative, become produced. By doing so, it might be possible to address the question regarding the extent to which education can be a remedy for injustices.

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Gerrard, J. (2014). Counter-narratives of educational excellence: Free schools, success, and community-based schooling. British Journal of Sociology of Education, 35(6), 876–894. Gerrard, J. (2015). Counterpublics, crisis and critique: A feminist socio-historical approach to researching policy. In K.  N. Gulson, M.  Clarke, & E.  Pendix Petersen (Eds.), Education policy and contemporary theory (pp.  122–133). Routledge. Government Bill (609/1986). Laki naisten ja miesten välisestä tasa-arvosta [Act on equality between women and men]. Government Bill (365/1995). Kuntalaki [Local Government Act]. Government Bill (1998/628). Perusopetuslaki [Basic Education Act]. Government Bill (80/2015). Hallituksen esitys eduskunnalle laeiksi varhaiskasvatuslain sekä lasten kotihoidon ja yksityisen hoidon tuesta annetun lain muuttamisesta [Government proposal on changing the act on child home care allowance and private day care allowance]. Government Bill (173/2020). Hallituksen esitys eduskunnalle oppivelvollisuuslaiksi ja eräiksi siihen liittyviksi laeiksi [Government proposal on compulsory education and related acts]. Kalalahti, M., & Varjo, J. (2012). Tasa-arvo ja oikeudenmukaisuus perusopetukseen sijoittumisessa ja valikoitumisessa. [Equality and justice in basic education. Access and selectivity]. Kasvatus & Aika, 6(1), 39–55. Kalalahti, M., & Varjo, J. (2020). Revisiting universalism in the Finnish education system. Research on Finnish Society, 13, 25–40. Kauko, J. (2019). The Finnish comprehensive school: Conflicts, compromises, and institutional robustness. In M. E. Compton & P. Hart (Eds.), Great policy successes: Or, a tale about why it’s amazing that governments get so little credit for their many everyday and extraordinary achievements as told by sympathetic observers who seek to create space for a less relentlessly negative view of our pivotal public institutions (pp. 122–142). Oxford University Press. Kauko, J., Pitkänen, H., & Varjo, J. (2022). Quality in Finnish comprehensive schools: Entrenching enhancement-led evaluation. In C. de la Porte, G. B. Eydal, J. Kauko, D. Nohrstedt, P. Hart, & B. S. Tranøy (Eds.), Successful public policy in the Nordic countries: Cases, lessons, challenges (pp.  447–455). Oxford University Press. Lahelma, E. (2011). Gender awareness in Finnish teacher education: An impossible mission? Education Inquiry, 2(2), 263–276. Lahelma, E. (2014). Troubling discourses on gender and education. Educational Research, 56(2), 171–183. Laiho, A. (2013). Sukupuolten tasa-arvo koulutuspoliittisena tavoitteena ja käsitteenä: Erityistarkastelussa 2000-luvun politiikkadokumentit [Gender equality as an objetive and a concept: A specific focus on 21st century policy documents]. Kasvatus & Aika, 7(4), 27–44.

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Lundahl, L. (2016). Equality, inclusion and marketization of Nordic education. Introductory Notes, 11(1), 3–12. Mahon, R., Anttonen, A., Bergqvist, C., Brennan, D., & Hobson, B. (2012). Convergent care regimes? Childcare arrangements in Australia, Canada, Finland and Sweden. Journal of European Social Policy, 22(4), 419–431. Meretniemi, M. (2011). Kutsumustehtävästä lastentarhanopettajan ammattiin. [Kindergarten teacher. From calling to profession]. In A.  Heikkinen & P.  Leino-Kaukiainen (Eds.), Valistus ja koulunpenkki. Kasvatus ja koulutus Suomessa 1860-luvulta 1960-luvulle (pp.  253–264). Suomalaisen Kirjallisuuden Seura. Myyry, S. (2020). Sukupuolten tasa-arvon diskursiivinen murros perusopetuksen opetussuunnitelman perusteiden 2004 ja 2014 välillä [The discursive change of gender equality between the national core curricula of 2004 and 2014]. Kasvatus, 51(3), 330–342. Paananen, M., Repo, K., Eerola, P., & Alasuutari, M. (2019). Unravelling conceptualizations of (in)equality in early childhood education and care system. Nordic Journal of Studies in Educational Policy, 5(1), 54–64. Paananen, M., Alasuutari, M., Karila, K., & Siippainen, A. (2020). Epistemic governance in local policy debates: The case of entitlement to early childhood education and care in Finland. European Journal of Cultural and Political Sociology, 7(1), 52–74. Riitaoja, A.-L., & Dervin, F. (2014). Interreligious dialogue in schools: Beyond asymmetry and categorisation? Language and Intercultural Communication, 14(1), 76–90. https://doi.org/10.1080/14708477.2013.866125 Säntti, J., & Kauko, J. (2019). Learning to teach in Finland: Historical contingency and professional autonomy. In M.  T. Tatto & I.  Menter (Eds.), Knowledge, policy and practice in learning to teach: A cross-national study (pp. 81–97). Bloomsbury. Schwab, R. (2018). Twenty years of policy recommendations for indigenous education: Overview and research implications. Centre for Aboriginal Economic Policy Research (CAEPR), the Australian National University. Simola, H., Rinne, R., Varjo, J., & Kauko, J. (2013). The paradox of the education race: How to win the ranking game by sailing to headwind. Journal of Education Policy, 28(5), 612–633. Simola, H., Kauko, J., Varjo, J., Kalalahti, M., & Sahlstrom, F. (2017). Dynamics in education politics. Taylor & Francis. Statistics Finland. (2022). Koululaitoksen oppilaitokset [Schools in the education system]. Retrieved October 12, 2022, from https://pxweb2.stat.fi/PxWeb/ pxweb/fi/StatFin/StatFin__kjarj/statfin_kjarj_pxt_125j.px/table/ tableViewLayout1/ Tervasmäki, T. (2018). Tasa-arvoa yksilö vai yhteisö edellä? Perusopetuksen opetussuunnitelman perusteiden 2014 tasa-arvokäsitys [Equality by prioritizing

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the individual or the community? The concept of equality the National Core Curriculum in primary education 2014]. In R. Rinne, N. Haltia, S. Lempinen, & T. Kaunisto (Eds.), Eriarvoistuva maailma – tasa-arvoistava koulu? [Inequal world – Equal school?] (pp. 123–144). Suomen kasvatustieteellinen seura. Varjo, J. (2007). Kilpailukykyvaltion koululainsäädännön rakentuminen: Suomen eduskunta ja 1990-luvun koulutuspoliittinen käänne. [Drafting education legislation for the competitive state the parliament of Finland and the 1990s change in education policy]. University of Helsinki.

CHAPTER 15

Social and Healthcare Policy: Taming Complexities? Ilpo Laitinen, Jari Stenvall, and Päivikki Kuoppakangas

Introduction Finland’s health and social services reform is one of the biggest administrative reforms in the country’s history, and it will also add a third level to the Finnish public administration, which formerly comprised two levels (the government and municipalities). The administrative level of social welfare and healthcare services stands between the municipal and government levels so that, from 2023, the responsibility for organising social welfare, health and rescue services will be transferred from municipalities

I. Laitinen (*) City of Helsinki, Helsinki, Finland University of Oxford, Oxford, UK e-mail: [email protected] J. Stenvall Tampere University, Tampere, Finland P. Kuoppakangas University of Turku, Turku, Finland © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_15

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and joint municipal authorities to the 21 well- being services counties (WSCs). The city of Helsinki is an exception, as it will retain its responsibility for organising social welfare, health and rescue services. In addition, the joint county authority for the Hospital District of Helsinki and Uusimaa (HUS) will be responsible for organising specialised healthcare in its area (Government of Finland, 2023). There have been proposals to develop the functional structures and practices of WSCs in order to make the services better meet the needs of the people. The objectives for establishing the counties include both vertical and horizontal integration and better and more seamless interoperability of social and health services and specialised care. With regard to residents and clients, the reform has the following objectives: ensuring equal and high-quality social welfare, health and rescue services for the residents of the WSC, improving the availability and accessibility of the services and reducing welfare and health inequalities. The functional objectives include securing the availability of a skilled labour force, meeting the challenges posed by population ageing and falling birth rates and curbing the increase in costs. About 173,000 employees of the municipalities or joint municipal authorities in healthcare and social welfare and rescue services will be transferred to the employment of the WSCs in 2023. This transfer of health, social and rescue services comprises revenue and costs of 20.63 billion euros transferred from municipalities at the national level (Government of Finland, 2023). There are huge tensions in public sector reforms, such as with the social and healthcare reform. This chapter is built around two ideas. First, we analyse what the main organisational paradoxes are that are formed by unreconciled organisational dilemmas constructed of competing aims and values (Kuoppakangas, 2015; Kuoppakangas et al., 2019) in the reform of social and healthcare services. Second, we analyse how adaptive leadership could reconcile those dilemmas, as not all organisational paradoxes can be solved and responded to via contingency reasoning and traditional resolution models. In this chapter, we will analyse and show how organisational paradoxes—dilemmas—are not only contradictory but interwoven and interdependent, and also how they also offer the opportunity for organisational change and transformation. We also argue that organisational paradoxes and their reconciliation affect leadership thinking about what is needed in public sector reforms.

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Organisational Paradoxes Foundational work on paradoxes in organisations emerged in the late 1970s and 1980s. (Carmine & Smith, 2021). Studies of organisational paradoxes have grown exponentially over the past two decades. Gaim et al. (2022) wrote that paradoxes are not contestable separately but are inconsistent when conjoined, constituting a pervasive contemporary feature. In this chapter, we argue that paradoxes are essential issues in organisational life concerning public sector reforms. Conceptually, an organisational paradox refers to a contradictory tension that we define as a dilemma. Organisational paradoxes are both interrelated and co-exist in organisations (Hampden-Turner, 1970, 1981, 1990, 2009). The common definition of an organisational paradox has been that it refers to contradictory yet interdependent demands that appear simultaneously and persist over time (Berti & Simpson, 2021; Berti et al., 2021; Hahn & Knight, 2021; Smith et al., 2017). However, the dilemma approach takes the paradox discussion further and may allow for the reconciliation of dilemmas (Kuoppakangas, 2015; Kuoppakangas et al., 2019). In this chapter, our starting point is the viewpoint that organisational paradoxes are typically wicked and complex problems that are socially constructed. Wicked problems refer to Rittel and Weber’s (1973) concept, later modified to the most commonly used definition by Jeff Conklin (2001, 2003): Wicked problems refer to real-life situations. These problems require you to create some kind of solution, whatever that is, and you cannot ‘be’ without responding, for example, to climate change. Complex problems refer to complexity theory (on the edge of chaos) and system theory and are also seen as an approach through which to tackle wicked problems.

Several authors have paid attention to the social construction of organisational paradoxes. In the book by Smith et al. (2017), for example, the authors also note that organisational paradoxes are social constructs: ‘Persistent and interwoven tensions emerge from and within multiple levels, including individual interactions, group dynamics, organisational strategies and the broader institutional context. Examples abound, such as those between stability and change, empowerment and exploitation, social and commercial, competition and collaboration, learning and performing.

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These examples accentuate the distinctions between concepts, positing their potential opposition; either A or B. Yet the social world is pluralistic, and comprises multiple, interwoven tensions, in which it can be difficult even to distinguish between A and B.’ Whereas, the dilemma approach to paradoxes suggests both–and solutions, where both A and B create a synergy to reconcile the complex paradoxes related to organisational changes (Kuoppakangas, 2015).

Social and Healthcare Reform Social and healthcare reform was included in the Programme of Prime Minister Sanna Marin’s Government (2019). The overall reform programme includes shifting the responsibilities and resources for health and social care from municipalities to new regional bodies. However, the emphasis has changed towards the services-as-a-system approach, improving localised services by placing users at the centre, emphasising preventative healthcare and evolving chains of services that integrate around the customer’s needs. The change will increase the importance of preventive healthcare and the development of digital and data-intensive social and health services. The first paradox is related to decision making. The reform and the change process have taken place in an operating environment where decision making is characterised by discontinuity, complexity and contingency, and it is ridden with dilemmatic objectives and practical implementations. Evaluations and views by experts and researchers pointed out that, in addition to the consequences that result from the stated objectives, reforms and change processes have adverse effects that reduce the benefits, as well as side effects, contradicting those dilemmas that deviate from the objectives (Lammintakanen et  al., 2016; Möttönen, 2019; Niskanen et al., 2020). The second paradox is the context of the reform. In the WSC reform, the provision of social and healthcare services became the most important issue, which also reflected a radical change in well-being thinking. While the key to the formation of the welfare state was how to respond to people’s well-being needs, the central question during the renewal has been how to prioritise the needs of different client groups and what kinds of effects the services should deliver. Although the welfare state has taken different forms in different Nordic countries due to historical events and political and administrative traditions, Finland is part of the Nordic

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welfare sector transformation. The special features of the Finnish discussion on the welfare society and services, as compared to the other Nordic countries, include the rapid development of social structures, stability and opportunities across generations, differences between parties and ideologies and a contradictory dilemma pair between welfare and the economy. Another characteristic of the Finnish debate has been the rapid ageing of the population, the birth rate and regional differences. These discussions have also included political disagreements on the ways of solving the challenges and even on whether the seriousness of the challenges has been understood. During the term of Juha Sipilä’s centre-right government from 2015 to 2019, the right-wing political group saw the public austerity policy as part of the solution to the problems mentioned above and the deteriorating dependency ratio. The right wing of the government argued that the Social Democrats in the opposition did not understand the need for change. However, the reform of social welfare and health services and solving the challenge of population ageing by reforming the services have been included on the agendas of various governments and parties so that all major parties have eventually been part of the reform and change process. With regard to the differences in ideology, the Social Democrats, the Left in particular, have seen that market-driven models based on privately produced social and health services pose a threat to the entire welfare model. According to some, the welfare society model, with its safety nets, is outdated, and the services are no longer provided on an equal and non-­ discriminative basis. According to some studies, inequality among Finns has increased rapidly over the past few decades, although at the same time, Finland has achieved excellent results in assessments of, for example, happiness (or rather, satisfaction) and perceived quality of life (Alvehus & Loodin, 2020; Hellman, 2021; Möttönen, 2019; Saari & Tynkkynen, 2020). Another paradoxical dilemma pair is the relationship between central government guidance and client orientation in WSCs. In well-being politics, which can also be referred to as big politics, well-being services are provided to all citizens equally and on a non-discriminative basis. This big politics approach determines the rights, benefits and forms of support associated with the services and creates an equal and uniform system of income transfers. The starting point for big politics is therefore the centralised and hierarchical top-down management of wellbeing policy and the creation of steering and monitoring mechanisms that ensure that these

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rights, benefits and transfers are implemented in an equal manner across the different WSCs. The dilemma of big politics includes the efficiency of service production, where the residents of the WSCs are seen as users, clients and targets. The opposing dilemma of big politics is small politics, which means a bottom-up, regional, altruistic and participatory approach that seeks to support local well-being resources and to compensate for well-being gaps and shortages (Laitinen, 2016; Laitinen et  al., 2013; Möttönen, 2019). There is a paradoxical dilemma pair between the centrally managed WSCs (big politics) and the local community (small politics) as well. According to Niiranen et al. (2019), the ministries steering the planning processes of centralised administration in line with big politics principles have identified the need for new kinds of co-operation in the WSCs through their dialogue, but at the same time, they have noted the related challenges in implementation. According to their research, centralised administration will produce stronger governance models and practices and result in a tighter grip by central governance (see Stenvall et al., 2022). The fifth paradox relates to changes in public services. The changes have meant a redefinition of the relationship between social and health services and a largely health service-driven service system. The dilemma pair identified is in reforms of social and health services and well-being services, including loose interaction and integration, the hypocrisy of the organisation, as well as conflicts between operating principles and basic principles and management. The impact of the services remains unclear, and in the daily work of organisations, the reformed system is seen as contradictory and rich with unreconciled dilemmas (Alvehus & Loodin, 2020; Hellman, 2021; Laitinen et al., 2013; Möttönen, 2019). The paradoxes of the reform include the dilemmas of integrating the social welfare and health administration. This integration of services can be approached and implemented from different viewpoints, focusing on, for example, the professionals, organisations and administrative systems that provide the services, and the client relationship, systems and participation of the people who use the services. In the Social and Health Centre for the Future Programme by Prime Minister Sanna Marin’s Government (2019), integration is regarded as successful when social welfare and healthcare work together as partners. In the programme, the importance of multi-disciplinary co-operation between social and healthcare services is

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expected to deepen and grow further, as the service integration and system are increasingly built on the co-operation between different occupational groups and the joint provision of services. The proposed solutions to these tensions arising from the dilemmas of the service integration processes include more active discussion on the values guiding the integration and extensive impact assessments that take into account different stakeholders, especially as the integration takes place not only within the public sector but also in the services provided jointly by the private and public sectors (Government of Finland, 2023; Laulainen et al., 2020; Taskinen & Hujala, 2020). The paradox comprising the dilemma pair of digital and remote services is that the service provider meets the client by integrating the cent. Many of these digital services have been designed and made to reduce direct interaction between the service provider and the resident or client. Process integration and system support services are key factors affecting the satisfaction of service users. However, they do not create a sense of community, as they are used in isolation by individual service users. The assumptions of digitalising well-being services include an active individual who is able to use the systems independently, assisted by the system. One of the loaded assumptions is that digital systems build and promote both local and non-local communities and communality through, for example, social media. Sparsely populated areas and individual differences in resources and competences have been seen as challenges (Paluch & Blut, 2013; Suhonen et al., 2022). The WSCs will also develop their services in line with their objectives on the basis of digital solutions. However, in addition to multi-­professional working methods, this enables different platform solutions (On platforms see also Chaps. 6 and 12 in this volume) and peer-to-peer networks, the development of which can change organisational structures and enable new operating models that are independent of time and place, such as peer support, data exchange and virtual participation. Hence, in addition to the paradoxes with dilemma pairs between central and decentralised, hierarchic and client-oriented, and efficiency and participation, the differences between big and small politics include a possible dilemma pair of place and local community in relation to, for example, virtual support and peer groups (Laitinen, 2016; Laitinen et al., 2013; Möttönen, 2019).

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Adaptivity as a Tool to Organisational Paradoxes In this chapter, in our analysis, adaptive leadership refers to an organisation’s capability to reconcile organisational paradoxes. Adaptation means the ability to change, a readiness to learn, benefit and develop at the organisational level from the dilemmatic tensions and the contradictions of evolving dynamics. Adaptive management has been presented as a model in recent articles on uncertainty and social and health management texts that deal, for instance, with the pandemic. What the texts have in common is that, in uncertain situations and conditions, the importance of adaptive management and proactive operating models increases. Similarly, according to these studies, the importance of local co-operation and the participation of residents, collaboration and public value co-creation are emphasised when the objective is to enhance the effectiveness of operations. Digital systems and platforms, as well as information sharing and interaction, are process enablers that are characterised by interpretation and learning (see, e.g., Bagwell, 2020; Baker et al., 2020; Garavaglia et al., 2021; Laitinen & Ihalainen, 2022; McKimm et  al., 2022; Ramalingam et  al., 2020; Sturmberg et al., 2022). According to Ronald Heifetz, one of the scholars in adaptive management and adaptivity in organisations, there are two kinds of challenges: adaptive and technical. Technical challenges are those to which you can apply current knowledge. There are some tested answers to them, and typically, different experts with relevant authority can respond to the challenges based on their experience and tried and tested knowledge. These technical challenges vary and can be very complex, but even then, the experts have knowledge of what the end result looks like and are aware of it in advance. Adaptive challenges, on the other hand, refer to situations without existing and known answers. Therefore, in these situations, it is essential to develop and learn new models and approaches to address the challenges. In such cases, the people affected by the challenge as experts are part of the process of formulating and finding the best possible way to respond to the adaptive challenge. Learning is an important part of this process. A typical risk in an organisation affected by different and simultaneous dilemma pairs is responding to adaptive challenges through technical approaches (Heifetz, 1994; Heifetz et  al., 2009a, 2009b; Laitinen, 2016).

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Learning is an important part of the adaptive process. Learning the adaptive process is analogous to the concept of the zone of proximal development in Vygotsky. The zone of proximal development approach emphasises the internal learning by individuals through social interaction, whereby the individual learns through cultural tools and interaction, first at the social level and then at their personal psychological level. When a topic is too difficult or challenging for an individual to solve alone, it is easier to solve it in co-operation and through external support structures than without them (Daniels, 2008; Kuusisaari, 2016; Laitinen & Ihalainen, 2022). Expansive learning has refined Vygotsky’s theory of the zone of proximal development. Expansive learning takes place in a situation where there is an interest in creating new knowledge and the need to look for solutions by specifying the dilemma pairs in the established operating methods of the operating system and limiting the development of the solution and the new operating model. The contradictory dilemma pairs refer here to different interpretations, aspirations and views. In such a situation of change in the old operating logic, according to the theory of expansive learning, action must have some object, a goal, conveyed through action models and methods in the above-mentioned way, and there is a contradiction in the process. These dilemma pairs open up opportunities to learn from others through jointly analysing and reflecting on them. In expansive learning, learners in the work community learn something that does not yet exist. The expansive cycle begins by questioning, criticising or rejecting the operating principles and models of the current operating system. According to Engeström, it is especially a question of how whole collectives or communities cross boundaries and create something new in an operating system; that is, reconciling the dilemma pairs. The operating system refers to a community activity that is directed towards a common target and uses its own instruments, rules of some kind and a division of tasks. The operating system is constantly changing, although its basic structure is rather permanent. This implies a change through learning and reconciling dilemmas in accordance with the so-called knowledge-creation approach. Knowledge creation is the development of new ideas, operating models and meaningful practices simultaneously with creating or enriching new knowledge. The approach to knowledge creation enables, for example, exploratory learning practices involving the development and deployment of new technologies in different communities. In the learning process, the operating system and its different dilemma reconciliations

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clarify the activities of different individuals. Thus, dilemma pairs build on structural tensions. For example, creating new models challenges old models, which creates a contradiction between them. These dilemmas are a source of expansive learning. They are disruptive, but they also enable insights and even innovations (Engeström, 1999, 2018; Kuoppakangas, 2015; Laitinen, 2015; Laitinen et al., 2018; Laitinen & Ihalainen, 2022).

Conclusions: Beyond Dilemmas and Paradoxes The detected dilemma pairs are typical starting points for research into organisational paradoxes. According to organisational paradox theory, the dilemmas of interdependent organisations are an essential part of renewal and re-organisation. The paradox theory defines paradoxes as ‘persistent contradictions between interdependent elements’. The identified and accepted dilemmas enable their generative transformative force. In this case, the prerequisite for the change is that the different parties and actors are committed to responding to the identified dilemma pairs and are aware of the power dynamics as one of the key drivers of these paradoxes. In this chapter, we have used paradoxes that are outcomes of unreconciled dilemmas as a way to describe the socially constructed content of social and healthcare reform in Finland. And yet, due to the ageing of the population, in decision-making discussions, it has become apparent that entirely new approaches are needed to produce services, and not all of the existing services can be replaced by filling open positions. According to the organisational paradox theory and dilemma approach, these paradoxes prevent and limit the achievement of the organisation’s objectives, the building of trust, the exchange of information and the utilisation of the capabilities of different parties if they are not identified and reconciled continuously together. In dilemmatic organisational paradoxes, asymmetric power dynamics prevent actors from creating meaningful, sustainable and productive new operating models to reconcile the paradoxes. Often, the reason for this is the organisational paradoxes and their root causes; the competing values in the dilemma pairs are not identified, while the parties maintain their existing positions of power and the interpretations corresponding to them. Identifying dilemma pairs requires analysing the interdependencies between the apparently conflicting elements in relation to the parties involved to reconcile the paradoxes. This process requires knowledge, competence and expertise on the competing dilemma pairs, a committed open debate between the different

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parties on the challenges posed by the identified dilemmas, a willingness to learn from them and from each other, as well as the ability to come up with and create effective ways for each party to achieve common ways of operation that open up and resolve the paradoxes. In order to be resolved in a new and effective way, each dilemma pair requires an analysis of the limiting effects of that paradox in relation to each party, tracking down the interfaces that prevent co-operation and collaboration and moving from the prevailing protective and ego-centric, inward-facing interpretation of each organisation to a common and outward-facing interpretation (Berti et al., 2021; Jarzabkowski et al., 2019). We have shown some of the conflicting trends in recent Finnish social and healthcare history. Social and healthcare services have been productised and care has been compartmentalised. It seems as though the innermost core—that is, being present and caring—is missing from the list of rationalised health and social services reforms. We have argued that adaptive leadership is needed in a complex environment dominated by organisational paradoxes. Adaptivity is based on adaptation, which refers to the ability of a complex system to adapt to its environment and to detect and reconcile the dilemmas it faces through a process of learning and experience. In the context of discontinuous and complex situations, adaptivity is used to refer to the organisation’s ability to use dialogue, skills and knowledge to solve problems that cannot be tackled using existing methods and models. The ability to change in social and healthcare services is typically hampered, in particular, by macro-regulation, established practices shaped by history and professional standards. The paradoxes, with their embedded dilemmas in the operating systems of the WSCs, cause disruption and require reconciliation. If they escalate, they can lead to systemic crises. However, discussing the paradoxes opens up the possibility of learning. The idea behind expansive learning is that it broadens the scope of the activity and takes its possibilities to a new level. Expansive learning is about questioning and radically expanding a given operating logic. Both sudden and longer-term change needs pose a threat to the organisation if it is unable to change. The need for change involves conflicting values and views, which emphasise the role of management as a social process and the importance of creating meanings together. A leader’s ability to balance different values and views by reconciling dilemmas and creating common meanings is the foundation of adaptive leadership. The role of adaptive leadership is to create a common understanding of the adaptive challenges that should be resolved.

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CHAPTER 16

Comprehensive Governance of Security Sirpa Virta and Minna Branders

Introduction It has been argued that the historical welfare model of the Nordic countries has conditioned its security discourses and practices to a large extent. Since the early 2000s, the so-called Nordic model has created convergence and harmonisation around policies and practices related to societal security (Larsson & Rhinard, 2021). Societal security is a new approach to security in the social sciences, developed in the context of the Nordic states’ co-operation in the civil security field and the need for common research on societal security, notably on crisis preparedness, protection, cross-border emergency services and resilience. Originally, the Finnish concept of comprehensive security has its roots in the Nordic states’ co-­ operation processes. At the policy level, the 2000s saw a converging trend towards the definition of societal or comprehensive security concepts that might coexist with military-led planning for times of war, but within which

S. Virta (*) Tampere University, Tampere, Finland e-mail: [email protected] M. Branders Finnish Ministry of Justice, Helsinki, Finland © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_16

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the softer aspects of security were paramount. The societal approach defines the protection of society as a whole as its goal (Bailes & Sandö, 2014). Governance of security in Finland has its roots in the ideology and practices of a strong legalistic tradition of Rechtstaat (See Chap. 2 in this volume) that seeks to guarantee the security of the state, society and people, social welfare, justice and equality. The main security sectors are internal and external security. The internal security sector covers the police, emergency services, border guards and migration. The external security sector is divided into foreign policy and defence. National security has traditionally been included in defence policy, but due to the changing content of the concept and policy in the past ten years, it is seen today in a wider sense as a part of internal security and other fields of governance too. The state still plays a strong role in providing security and trust (Virta & Taponen, 2017). Due to the rapidly changing international security environment and common threats such as terrorism, pandemics and so-­ called hybrid threats, the co-operation on civil security governance has been enhanced. This process of civil security co-operation goes hand in hand with the development of internal security, and it counts on co-­ operation with the military and preparedness organisations (Virta & Branders, 2016). Internal security is governed by the Ministry of the Interior, but the Ministry of Justice and the whole criminal justice system is an important part of it, too. It has been argued that Finland is moving away from the well-known Scandinavian model of criminal and penal policies (see Esping-­ Andersen, 1990) towards the European model of the governance of internal security (Virta, 2013). This Europeanisation of security policies is common to all Nordic countries, where old and new elements of security governance exist side by side. Recently, due to the rapidly changing international security environment, notably in Ukraine, but in the whole of Europe too, and common threats such as pandemics and climate change challenges, Nordic co-operation on civil security has been enhanced. The provision of security in societies today struggles with growing threat complexity and a widening array of actors. Finland has reacted to the pressures both conceptually and in policy practices; namely, it deals with the emergence of the comprehensive security notion, called a Comprehensive Security Model (CSM). This model introduces a governance model for how security should be addressed across societal and governmental levels, and it emphasises information sharing, preparedness

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planning and effective implementation among multiple actors in different policy sectors (Valtonen & Branders, 2021). The comprehensive governance of security in Finland has already been the way of governing broad security, internal security and the ‘whole’ even before the concept and the model were adopted and named. The governments’ security programmes and strategies have highlighted the importance of broad security and the comprehensive governance of security since the first Internal Security Programme of 2004. Therefore, the CSM and the Security Strategy for Society (2017) are important parts of the comprehensive governance of security, but, as a whole, it is seen as a complex system and a dynamic process. The comprehensive governance of security in Finland is an ongoing process that will shape future security architecture (organisations and their relationships) and which requires adaptive strategies for embracing complexity and innovation, trust building, intelligence and co-operation. In this article, we argue that comprehensive security should be developed further from the theoretical perspective of a peakless and centreless social system (Luhmann, 1995) and analyse what it may mean in practice in the context of leadership, decision making and governance.

Background of the Comprehensive Security Approach In security studies, the term ‘comprehensive security’ has been used in various contexts, but the general purpose has been to deepen and widen the understanding of security governance and policy by considering the different referents of security and multiple security issues, as well as an array of tools to counter security threats that go beyond the traditional notion of state security (see, e.g., Muhlberger & Muller, 2016). Historically, in Finland, the idea and model of comprehensive security can be traced to the first decade of the country’s independence in 1917. The building of security governance structures began after the Civil War. In the early decades, the building of national security concentrated on border guards and defence forces. In late 1918, the police were established. The first state-level collaborative body, the Defence Council (established in 1924), re-started its activities in 1958 and developed the concept and model of Total Defence. It has been argued that despite the widespread use of broadening security concepts, such as societal security, especially in the Nordic countries, the Finnish comprehensive security approach and model are unique in many ways. The CSM emerged from a distinct

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historical context that was rooted in a Total Defence approach. Due to the geopolitical location and situation of Finland, defence differs over the years in its stance and relation to Russia (Valtonen & Branders, 2021). In late 2003, the government approved the first strategy for securing the vital functions of society. Parallel policy development in the internal security sector was built on the concept of broad security from 2004. The Ministry of Defence and the Ministry of the Interior both emphasised the co-operation and collaboration of the security actors in their main strategies. The main difference is the focus. The focus of the Ministry of Defence’s approach is preparedness for war and crisis. The focus of the Ministry of the Interior is the prevention and production of security in society (police, emergency services, borders, immigration). The notion of comprehensive security has been framed in political discourse in Finland through seven dimensions: (1) the use of ‘broad security’ as a policy and strategic doctrine, involving unifying and holistic security thinking; (2) ‘comprehensive security’ as requiring ongoing and continuous processes, and taking into account global flows and systems; (3) the development of a stable and peaceful society, including the welfare dimension and human security; (4) comprehensive defence (linked to Total Defence); (5) preparedness and continuity management; (6) the operational dimension of public authority co-operation; and (7) the ecological dimension. The consequence of the shift in focus from preparedness for war and the threats from other states to more comprehensive societal security was that, from 2010 onwards, the term ‘comprehensive security’ replaced the earlier Total Defence concept, although the content did not change much (Branders, 2016). The term and concept of comprehensive security were adopted as an all-encompassing strategic framework for security governance, but the main impetus was that it offered a cross-­ sectional co-operative framework for various governmental and civil society actors (Hyvönen & Juntunen, 2021).

The Model and Organisation of Comprehensive Security As argued widely in security studies, there has been a shift in the organisation of security towards networked and multi-layered security governance (see, e.g., Juntunen & Virta, 2019; Whelan, 2012). The CSM is a model of multi-agency co-operation, the network of actors that is co-ordinated

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by the Security Committee. The network of comprehensive security can be seen as a sub-system of societal security, and as such, as a network, it is peakless and centreless. No single actor ‘owns’ comprehensive security; it has no peak or centre with executive power. The Security Strategy for Society was last updated in 2017. This is the main document for comprehensive security policymaking. The application of the strategy’s goals, the Government Resolution on Comprehensive Security, the policies listed in the Foreign and Security Policy Report and the Government Programme are the most important steering documents of the Committee. Responsibilities and tasks for societal preparedness are based on law. The overall principles of comprehensive security are outlined in the Security Strategy for Society (2017). The current applicability of the Strategy is followed by the Security Committee, and it is updated via government decisions when deemed necessary. The goal is for the overall principles to last across governments. The practical application of the Strategy happens through sector-specific or cross-sectoral strategies, programmes and other documents. Examples of this are the Strategy for Internal Security with its programmes and the Finnish Cyber Security Strategy and its programme. Realising the central goals of the government reports covering security strengthens Finnish security and develops Finnish welfare in a quickly changing and hard-to-anticipate international environment. To resource preparedness and security, environmental analyses play a central role (Security Committee, 2023). The Security Strategy for Society (2017) will be updated in the near future. The process has been delayed for several interdependent reasons, the most important of which is the geopolitical situation of Finland and the Russian invasion of Ukraine in February 2022. Comprehensive security is the co-operation model of Finnish preparedness, where vital societal functions are handled together by authorities, businesses, non-governmental organisations and citizens. The vital societal functions, defined and listed in the Security Strategy for Society (2017), are as follows: • Leadership • International and EU activities • Defence capability • Internal security • Economy, infrastructure and security of supply • Functional capacity of the population and services • Psychological resilience

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Although the concept of comprehensive security is ambiguous and unclear, it was adopted as a kind of umbrella term for security politics in a political process led by the Security Committee, which started its work in 2013. Its role is to assist the government and ministries in matters pertaining to comprehensive security. It co-ordinates the implementation of strategies and organises education for organisations, municipalities and the voluntary sector about, for instance, capacity building and preparedness. The operations and responsibilities of the Security Committee are legislated in the Decree of the Finnish Government on the Security Committee (77/2013). The Security Committee consists of 20 members and 4 experts from different branches of government, officials and business. As a permanent and broad-based co-operation body for proactive contingency planning, the Security Committee works for comprehensive security. As a network organisation, the Committee itself has no executive power nor mandate to implement strategic or operational measures. The Secretary General is the Chair of the Committee, speaks for the CSM and works as the Head of the Secretariat. Strategic steering has been focused on various arrangements for preparedness. Each ministry has an appointed full- or part-time preparedness manager. A ministry’s preparedness manager assists the permanent secretary of a particular ministry in matters pertaining to preparedness and security. The tasks of the preparedness manager are determined by the appropriate ministry. They include, among other things, preparedness planning, material allocations and personnel training related to the administrative sector’s preparedness. The preparedness manager is responsible for security measures and preparedness arrangements in the administrative branch, ensuring that they make up a consistent whole, and co-ordinating preparedness arrangements with other administrative branches. The preparedness manager attends security exercises and other training events as an expert for his/her administrative branch. Preparedness managers hold regular meetings in which they co-ordinate matters related to preparedness between the various administrative branches. Where necessary, experts from different institutions and agencies also attend the meetings in addition to ministries. In the event of an incident, preparedness managers can be summoned for an extraordinary meeting. The purpose of the meeting is to investigate the possibilities of all relevant authorities supporting the administrative branch responsible for solving the crisis. The preparedness

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managers’ meeting is chaired by the Government Security Manager. The Secretariat of the Security Committee acts as a secretariat for the meeting (Security Committee, 2023). The significance of the CSM and the work of the Security Committee is challenging to evaluate due to its networked structure and lack of executive power. Therefore, we argue that the comprehensive governance of security in Finland is more important as a security ‘ideology’, or a way of thinking, which attempts to share responsibility for the whole broad field of security by sharing information (situational awareness, knowledge), building trust and creating innovations (deliberation, education) and focusing on developing preparedness (Emergency Powers Legislation Initiative, 2022). The CSM is an example of the government’s attempt to adopt a systemic approach to broad societal security challenges. The innovation of this approach is the reconciliation of whole-of-government and whole-of-society policies and practices.

Phenomenon-Based Governance Several public governance development initiatives have highlighted the need to re-think organisation and strategies from the perspective of phenomenon-­based governance. It has been argued that instead of looking at structures, we should develop phenomenon-based decision-making and adaptive strategies (Takala, 2018). The governance of security in Finland has been developed mainly by the security authorities, according to the mandates and executive powers of the particular organisations. It is difficult to govern security phenomena through traditional organisational and leadership models today. One of the weaknesses of comprehensive security as a policy is the paradox that it does not perceive comprehensive security as a whole; it does not cover all security issues, but instead divides the process into ‘administrative’ parts. It focuses on the process of preparedness (planning) but pays less attention to causalities, interdependencies and the other parts of the process (Branders, 2016). The change that the development of phenomenon-based governance necessitates is promising for comprehensive security—a true innovation. Security as a phenomenon is in itself very complex, contingent and ambiguous. Contingency, as a philosophical concept and according to its contemporary interpretations in social sciences, refers to the possibility, for instance, to alternative interpretations of security in a given context, and the possibility of occurrence, something that is incidental, surprising, not

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intentional, unexpectable and unpredictable (see, e.g., Aradau, 2014; Eräsaari, 2005; Luhmann, 1995). Therefore, the governance of security should aim to live—and cope—with the contingencies; they have to seriously be taken into account. In the development of good security governance, according to the conventional criteria of good governance (transparency, responsiveness, citizen participation, ethics, accountability, etc.), the contingencies or uncertainties of security should be taken account of. The most important contingencies are secrecy, closure and confidentiality, political paradoxes of security, the limits of knowledge (the unknowns), urgency (in emergencies and crises), the Other (enemy, criminal, threat) and exception (exceptionary powers) (Virta, 2020). The expected outcome of comprehensive security and preparedness is not by definition (comprehensive) security, but resilience. As a phenomenon, it is a bit more concrete and measurable, and the comprehensive governance of resilience has been suggested as an alternative or complementary policy (Hyvönen et al., 2019). Resilience combines societal and defence policy concerns, coupled with a limited amount of civil society responsibilisation. The Finnish doctrine of resilience seems to emphasise psychological and material preparedness to resist the status quo-­threatening effects of crisis scenarios. The Security Strategy for Society (2017) includes psychological resilience in vital societal functions and defines it as ‘the ability of individuals, communities, society and the nation to withstand the pressures arising from crisis situations and to recover from their impacts’ and continues by stating that ‘good psychological resilience facilitates the recovery process’ from societal crisis scenarios (Hyvönen & Juntunen, 2021, p. 168). In order to become truly ‘comprehensive’, the governance of security will be developed towards phenomenon-based processes and adaptive strategies. One recent example of this is the Emergency Powers Act initiative of the Ministry of Justice. The process of reforming the whole preparedness process and its legislation started in October 2022 based on several reports from top experts in comprehensive security. Although the initiative includes defining new legislation mainly for the state of exception (serious crises, emergencies), it will also be important for general preparedness in so-called normal circumstances. The reform is challenging due to the complexity of the security environment, the uncertainty and contingencies of security and societal and political developments. The government has established the secretariat for the initiative, a group of top experts from various fields of governance.

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Towards a Networked Comprehensive Security Architecture In addition to adopting the phenomenon-based approach, the governance of security through networks will be promoted. All complex systems are highly interconnected, and this gives them a networked architecture; the structure of this network of connections becomes more important to the system’s state and behaviour than any individual component. Complex systems are multi-dimensional, multi-layered and multi-scaled. You have to look at them from many dimensions and develop a solution on the different levels and across the different dimensions; solving for one dimension or one problem will not suffice. This is why we talk about systems innovation and system change, because with a complex problem, you actually have to change the whole system by affecting multiple different areas within the network (Colchester, 2016). There are many different kinds of networks and sub-networks on the national, regional and local levels, usually established by the security authorities. They can be anything from short-time, one-issue working groups to local multi-agency teams for crime prevention. The common denominator is the network structure and co-operation. In the peakless and centreless system of societal security, a comprehensive security strategy will be built in the future based on networks relevant to the phenomena to be governed and problems to be solved. Trust building is also structured into security networks in various ways. Civic engagement and citizen participation can also be seen as complex collaborative adaptive networks, but so far there is no coherent strategy for this. Civic engagement can take many forms and can include efforts to directly address an issue, work with others in a community to solve a problem or interact with the institutions of representative democracy (Yang & Bergrud, 2008). In order to be legitimate, a common project, such as comprehensive security, requires both public administration and institutions such as security networks, as well as deliberative activity to conceptually formulate and elaborate what the legitimate policy goals and means of security are. Citizen participation and deliberation are included in the objectives and means of security strategies at all levels of governance in order to enhance co-operation, share responsibilities and exchange information between authorities and citizens. They are integral elements of systemic comprehensive security, but their implementation has been non-­ systematic. There have been a few experiments, such as the Citizens’ Jury,

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organised in the context of a military–civilian preparedness exercise in Tampere in 2014, which was also evaluated (Virta & Branders, 2016). It is not clear how well various deliberative and participatory activities build trust, but they have a role in education, capacity building and sharing relevant information, for instance, about preparedness (of the state and authorities, and how citizens can be better prepared for crisis themselves). We argue that in order to be legitimate, the development of comprehensive security as a whole-of-governance and a whole-of-society system requires innovative thinking and inclusive networks for citizen engagement and deliberation too. Despite the many contingencies of security, such as secrecy and closure, a comprehensive security system should be as open and transparent as possible.

Conclusions: Strategic Approach to the Comprehensive Governance of Security According to the framework of peakless and centreless, complex and networked comprehensive security, policymaking, leadership and decision making cannot only be in the hands of one or several security authorities. However, the role of the state is significant in terms of the governance of security, as long as the state’s sovereignty is the most fundamental security issue. Therefore, there should be whole-of-government and whole-of-­ society strategies. The comprehensive governance of security requires the development of strategic-state capabilities (See Chap. 18 in this volume). In Finland, there is a tradition of strategic-state thinking and practices in public governance and government-wide approaches that are well applicable for security governance (Joyce & Drumaux, 2014). Comprehensive security policymaking and strategic planning should be based on joint planning and on the needs of society and citizens; what is needed for truly comprehensive security from the perspective of people in general, vulnerable groups, immigrants, etc. (Murphy, 2014). A complex adaptive system, such as the comprehensive governance of security, requires adaptive policymaking and strategies. The next Security Strategy for Society, be it an updated version from the 2017 strategy or a new one, could benefit from embracing comprehensive security as a complex, contingent and ambiguous phenomenon and the governance of security as a complex adaptive system. According to complexity theory, complex systems consist of multiple elements, but it is the behaviour of

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the overall system rather than the individual parts of the system that needs to be the focus of inquiry. The interaction of the elements is dynamic and the system has the capacity to change over time. These interactions are non-linear in nature and can produce unpredictable behaviours or outcomes. Complex adaptive systems are open systems that interact with their environments (Pycroft, 2014). Various adaptive practices have been developed in recent years. The government has been working on future scenarios and strategic foresight for several years and, based on this work, has provided reviews and reports. There is also an ongoing process of building a continuous monitoring model for situational pictures and awareness of the security environment. In adaptive policymaking, the contexts, security environments, systemic approach, learning and capabilities are important. In this way, the comprehensive governance of security will be a legitimate and sustainable whole-­ of-­government and whole-of-society model of security governance in the future, in our rapidly changing, global, Nordic and national security environment.

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security; levels, processes and evaluation. Kokonaisresilienssi ja turvallisuus: tasot, prosessit ja arviointi. Prime Minister’s Office Publications 17/2019. Internal Security Programme. (2004). Ministry of the interior. Retrieved from www.intermin.fi Joyce, P., & Drumaux, A. (2014). The development of the strategic state in Europe. In P.  Joyce & A.  Drumaux (Eds.), Strategic management in public organizations: European practices and perspectives (pp. 310–328). Routledge. Juntunen, T., & Virta, S. (2019). Security dynamics: Multilayered security governance in an age of complexity, uncertainty and resilience. In A.  Kangas, J.  Kujala, A.  Heikkinen, A.  Lönnqvist, H.  Laihonen, & J.  Bethwaite (Eds.), Leading change in a complex world: Transdisciplinary perspectives (pp. 67–84). Tampere University Press. Larsson, S., & Rhinard, M. (2021). Introduction: Comparing and conceptualizing Nordic societal security. In S. Larsson & M. Rhinard (Eds.), Nordic societal security: Convergence and divergence (pp. 3–21). Routledge New Security Studies. Luhmann, N. (1995). Social systems. Stanford University Press. Muhlberger, W., & Muller, P. (2016). The EU’s comprehensive approach to security in the MENA region. In L. Chappell, J. Mawdsley, & P. Petrov (Eds.), The EU, strategy and security policy (pp. 51–67). Routledge. Murphy, P. (2014). The development of the strategic state and the performance management of local authorities in England. In P. Joyce & A. Drumaux (Eds.), Strategic management in public organizations: European practices and perspectives (pp. 243–254). Routledge. Pycroft, A. (2014). Complexity theory: An overview. In A. Pycroft & C. Bartollas (Eds.), Applying complexity theory: Whole systems approaches to criminal justice and social work (pp. 15–38). Policy Press. Security Committee 2023. Retrieved from www.turvallisuuskomitea.fi Security Strategy for Society. (2017). Retrieved from www.turvallisuuskomitea.fi Takala, P. (2018). Towards continuing situation picture. Data-analytics supporting societal decision-making. In Kohti jatkuvaa tilannekuvaa. Data-analytiikka yhteiskunnallisen päätöksenteon tukena. Sitra. Valtonen, V., & Branders, M. (2021). Tracing the Finnish comprehensive Security model. In S. Larsson & M. Rhinard (Eds.), Nordic societal security: Convergence and divergence (pp. 91–108). Routledge New Security Studies. Virta, S. (2013). Governing urban security in Finland: Towards a European model. European Journal of Criminology, 10(3), 341–353. Virta, S. (2020). Pre-crime and standardization of security risks. In O-E. Olsen, Juhl, K., Lindoe, P. & Engen, O. (Eds.), Standardization and risk governance: A multi-disciplinary approach (pp. 137–149). Routledge New Security Series. Virta, S., & Branders, M. (2016). Legitimate security? Understanding the contingencies of security and deliberation. British Journal of Criminology, 56(6), 1146–1164.

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CHAPTER 17

Nordic Environmental State in the Making? A Practice View of the Green Transition Helena Leino, Markus Laine, Ari Jokinen, and Pekka Jokinen

Introduction The famous ‘Nordic model’ of the welfare state is based on theories of the intertwinement of social and economic welfare. It was mainly founded on a social democratic vision of modernisation, and economic growth has thus been the primary societal goal behind the model. In Finland, the major welfare state thinker was Pekka Kuusi (1964), who argued strongly for the interdependence of economic growth, democracy and social equality. Over the decades, reforms have aimed at maintaining the sustainability of the welfare state, mainly by safeguarding the financial balance and carrying capacity of the system (e.g. Schoyen et  al., 2022). However, the policy core of the welfare state is currently under high pressure due to environmental challenges, which have led to major ideas about

H. Leino (*) • M. Laine • A. Jokinen • P. Jokinen Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_17

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embedding welfare institutions in the ecological context (See Chap. 8 in this volume). Like in other Western countries, environmental policy in Finland has advanced from the original nature conservation policies to the current multi-level environmental governance and the aim of a green transition. Municipalities established hundreds of nature conservation areas between 1860 and 1960, primarily based on local self-government. The aim was to promote the well-being of local inhabitants, but often, the lack of accessible green areas led to the politicisation of nature conservation (Laakkonen et al., 2019). Following the ‘environmental awakening’ in the late 1960s, the institutionalisation of environmental policy resulted in novel regulative strategies and a sectoral ‘react-and-cure’ model (Haila, 2012; Jokinen & Koskinen, 1998; Nieminen et al., 1999). In the late 1980s, the optimistic ideas of sustainable development filled Western societies with an environmental message (ibid.). Furthermore, internationalisation added a new dimension, as Finland’s EU membership in 1995 set the framework for national environmental policy. Due to deepening problems, novel environmental policy arrangements have risen in this century, aiming at multi-­ level action, co-operation with various social groups and sectors and just solutions, particularly in relation to climate change and biodiversity. Previous studies suggest that the welfare state is a precondition for the developmental path combining social justice (See Chap. 10 in this volume) and the environment in governmental policies (Bailey, 2015; Duit, 2016; Tunkrova, 2008). This also pertains to advanced development policies and to the introduction of international norms (Elgström & Delputte, 2015). Nordic countries have thus often been considered the forerunners of new environmental governance (Eckerberg & Joas, 2004; Sääksjärvi, 2020). Nevertheless, critical challenges have also been identified within the Nordic model. Olsson et al. (2020) concluded that the Nordic green economy transition is seriously challenged by the continuous overexploitation of natural resources. Furthermore, in terms of climate governance, the Nordic model displays a substantial degree of ‘wickedness’ (Neby & Zannakis, 2020). This chapter focuses on the current drivers of change in Nordic environmental policy. The ‘environmental state’ discussed in Sect. “The Environmental State for the Green Transition” serves as an interesting conceptual reference, which we refine by arguing that cities are emerging as key policy players in the green transition. We also introduce a practice-­ oriented approach to clarify how environmental concerns work at the city

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level and evoke opportunities for sustainable urban development (cf. Banister et al., 2019). The conceptual section is followed by two illustrative cases of urban green policies. These are the implementation of urban climate policy in the format of light rail transit (LRT) planning and the implementation of the Nordic scheme of national urban parks (NUPs). Finally, we conclude with context-specific solutions in  local policy processes.

The Environmental State for the Green Transition To address the strengthening environmental challenge, novel concepts, such as the environmental state or sustainable welfare state, have been developed (Hirvilammi, 2020; Meadowcroft, 2005, 2012; Schoyen et al., 2022). An environmental state can be defined as a state making environmental protection one of its essential regulatory functions (Meadowcroft, 2005). Such a state would be concerned with avoiding ecological crises and ensuring that social development remains within the boundaries of ecological sustainability, and, as we underline, not only on the national but also on the local level. There are major structural similarities but also interesting differences between the models of the welfare state and the environmental state (Gough, 2016; Meadowcroft, 2005, 2012). First, both models extend state authority to a new area of social life, either to the labour market and social welfare or to environmental management. Both models also manifest themselves as a response to a failure of markets and voluntary action, the response then resulting in varying redistributive effects. Furthermore, they share some normative bases, such as justice and welfare. Since such normative concepts are crucially contested and open to the struggles of definition in society, they obviously catalyse somewhat similar political dynamics (when understood in their contexts). Of the several dissimilarities between the models (Meadowcroft, 2005), we emphasise the basic stance on economic growth. In social welfare policy, economic growth appears as a condition for progress, whereas in environmental policy, the tensions between the economy and ecology are chronic, despite the harmonising goals built into various governance models, such as ecological modernisation or green growth (e.g. Franca et al., 2022). In addition, the difference in the forms of intervention is significant: While social welfare policy relies mostly on regulation and redistribution, environmental policy utilises a broad spectrum of policy measures.

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The environmental state is an interesting concept that, according to our view, must be refined with two additional claims. First, regarding the necessary systemic change towards sustainability, a conceptual reframing from the welfare state to the environmental state is not enough for a transformation of the system. Second, we have found that, in the literature, the environmental state has so far been discussed solely as a national-level entity. Therefore, to localise the major idea of the environmental state, we move on to discuss the local practices that keep cities on the cutting edge of environmental policy. A practice view leads us to examine the roles of local civil servants, professionals, businesses and citizens, and to recognise the multiple and overlapping contexts within which environmental policy is enacted in cities (Freeman et al., 2011). Practices generate norms, routines and artefacts that, in turn, structure practices. Thus, analysing the local actors and their daily encounters sheds light on the tensions arising from the implementation and goals of national and global environmental policies in Finland. From a European perspective, Finnish municipalities have broad responsibilities, such as education, healthcare, land use and planning, heat and electricity, and social housing, but also resources that are mostly secured by municipal tax and fees (see the other chapters in this book). We agree with Cook and Wagenaar (2012), who argue that practice itself is not passive but active, and that among its active traits is that it gives shape to knowledge and context. The contents of knowledge and context are accepted, sustained and modified or rejected through practice (Leino & Åkerman, 2021). For instance, in NUP development, the Finnish bottom-­up approach to practice proved to be very successful in comparison to the Swedish tradition of organising top-down procedures (Slätmo et al., 2021). Instead of serving up a clear, coherent procedure for environmental state development, we offer a more complex picture of the practical world in which civil servants and citizens, together with other actor groups, are trying to implement environmental policy initiatives. Practice implies that these people in cities, while developing national environmental policies and transforming them into practical actions at the local level, are always positioned as parts of a larger network of relations, conventions and obligations (Wagenaar & Cook, 2003). In cities, environmental knowledge needs to be gathered, translated, represented and made available in a condensed form, such as climate or biodiversity roadmaps that help monitor the current situation, but also strategic envisioning for the future (Virtanen

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et al., 2022). The strategies, in turn, can affect the actual choices and practices that cities undertake in a straightforward or less direct manner. The environmental perspective becomes effective when it is entangled in budgeting, urban development and other core practices. Hence, the discussion of the environmental state cannot be plausible if it is not rooted in local practices. As we see it, practice-based policy analysis is the tool for illustrating that the people implementing environmental policy goals are the crucial actors of transformation (Leino & Åkerman, 2021).

Urban Execution: The Most Likely Version of the Environmental State In the face of climate and biodiversity crises, the environmental state can be characterised as a production chain of environmental solutions for better security, and this production chain is run by state–city interaction. Cities are seemingly independent in the excessive use of raw materials— the constant flow of environmental ideas circulating through city networks and global commitments—and they are free to utilise the most beneficial of them in their environmental policies (Hajer, 2015). Nevertheless, in the Nordic context, the interplay between the state and the biggest cities is where the most prominent ideas are chosen and modified. The state has increasingly exercised its power and political agendas through cities during recent decades, and environmental policy is tightly coupled with this power. Since ‘the economisation of the urban’ is the main goal in this state-orchestrated urbanisation (Luukkonen et al., 2022; Moisio et al., 2020), the state gives its primary support to environmental policies that optimally fulfil the goals of economic growth in cities. This is tightly coupled with the idea of systemic change towards urban sustainability in the current state–city interplay, a new dimension in the actions of the environmental state. The EU and global city networks make a clear contribution to this interplay. While the state supports city strategies selectively, the cities can stretch and combine different sustainability goals to get them usefully adapted to meet their own strategic interests (Jokinen et al., 2018). The tendency for state support is clear, albeit based on heterogeneous success: it includes, among others, financial support and city-regional land-use commitments, but also policy guidance based on ambiguous assumptions (Leino & Åkerman, 2021). City strategies and roadmaps create their own dynamics,

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and the practices may strongly shape the outcomes (Bäcklund et al., 2018; Nylén et al., 2021; Virtanen et al., 2022). The variable activities of citizens, the private sector and academic research become decisive in these processes. However, ultimately, concrete practices are needed to make an actual change. Our examples of LRT and NUPs are related to climate change and biodiversity policies (on LRT, see also Chap. 5 in this volume). They represent the applied ideas of a compact city and are co-constituted by the city and the state. They are also illustrations of the ambitious climate and biodiversity strategies that have entered from the EU to Finland and finally to city-level policy implementation. Moreover, the cases exemplify the narrow regulative role of national-level environmental governance and emphasise that the role of the city is crucial in the implementation. They also fulfil the target of combining economic growth and environmental policy. In short, municipalities have the best opportunities to make changes in local land-use planning, including mobility and nature. As a climate-sensitive solution, cities have emphasised the development of public and light transportation options. The biggest Finnish cities have set goals to increase rail transportation, which is strongly supported by the state. Nevertheless, political decisions regarding transport are not straightforward. Currently, Finnish cities are struggling with a paradigmatic change in urban development from urban sprawl to compact cities. For example, in the fast-growing city of Tampere, the LRT process (2016–) has been considered a strategic instrument to make the city compact and reduce greenhouse gas emissions (Karppi & Sankala, 2020). However, in areas where the LRT has been constructed, the value of land has increased substantially. This has attracted construction companies and investors to build along the tramline and has brought capital to the city. One of the main goals of the Nordic welfare state has been to provide affordable housing in all neighbourhoods. LRT challenges this goal; although it has been argued as a way out from the private car-dependent city, the downside of this choice has been rapidly rising housing prices. These areas attract middle- and upper-income urban residents who choose to live near public transit by pedestrian-friendly streets in higher-density mixed-use neighbourhoods (Rice et al., 2020). This tension between climate policies and social equality is growing and can have major consequences, such as green gentrification (Leino et al., 2022). Along with climate policy implementation, biodiversity conservation is challenging in cities. City strategies for safeguarding urban green areas

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have long followed global trends in urban planning, the shifting relations between the state and local governance and the development of the welfare state. New global principles for green infrastructure have been in place in Finnish urban planning since the 1990s, emphasising the multiple benefits of green areas, such as biodiversity, health, recreation, culture and climate adaptation. The state has been interested in supporting cities to safeguard these values, along with urban infill development. For this purpose, the NUP was included in the Land Use and Building Act in 2000 to complement the legal requirements for urban land-use planning to save green areas. NUPs provide voluntary opportunities for cities to preserve valuable urban nature and built cultural environments as large integrated entities. NUP decisions are made by the Ministry of the Environment based on the city’s application and management plan. Thus far (as of 2022), the network of NUPs has included areas from 11 cities (Finnish National Parks, 2017). To meet the NUP status, each area must (1) include important natural areas for biodiversity conservation, supported by ecological continuity within and outside its borders; (2) cover significant cultural landscapes with aesthetic value and historical buildings; (3) be wide enough to allow people to use green zones when moving between urban districts; and (4) reach the centrality of the city and its urban structure. By creating an integrated entity involving the built, cultural and ecological aspects of the city, the idea of the NUP opens up city-specific opportunities to enhance urban biodiversity. As local policy drivers, the LRT and the NUP are both similar and different. Through these cases, research focusing on the practices becomes highly important—the practices of implementation are what, in the end, create the environmental state. The LRT and NUP both demand multi-­ actor governance, citizen engagement and cross-sectoral planning instead of single-sectoral transport or biodiversity planning and implementation (Lindholm, 2017). They are both strategic in terms of climate action and biodiversity, but they have been integrated into other goals of urban policymaking, such as the compact city, the green city identity and branding to attract new residents, businesses and tourists. Climate and biodiversity policies alone cannot be successful in cities (Bulkeley et al., 2021). From an equality viewpoint, NUP development has somewhat similar consequences to LRT development: an apartment by the park or the tramway line is more expensive and out of reach to lower-income groups without a welfare state orientation. In addition, the solutions and opportunities for

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the LTR and NUP have to be adjusted to place-specific conditions, as the city landscapes and structures are different, generating diverging choices among the cities (Røe et al., 2022). In the case of climate and biodiversity policy implementation, even more interesting issues are the differences that become clear via the examples of the LRT and NUP, adding to the complexity of their integration. Climate policy and biodiversity policy objectives are different in terms of how they are transferred and modified in the state–city collaboration, and particularly in cities’ policymaking practices. Whereas the idea of NUPs was initiated at the state level and slowly gained support in cities (Hautamäki, 2019), light rail was first and foremost a city initiative that later received financial support from the state. The different starting points demonstrate how they initiate a systemic change in cities, potentially leading to shifts in policymaking, implementation and urban imagination. The steering and guidance coming from the state is subtle, deliberative and based on national programmes, ensuring some financial support (Luukkonen et al., 2022). Most importantly, it offers a prestigious position among sustainable cities. Moreover, the concept of the NUP does not just proceed as a city-specific practical implementation; it also offers a strategic instrument to rethink biodiversity goals in cities, at least in principle. The initiatives coming from the city level, such as the LRT, are embedded in the local context from the beginning. Still, the considerable LRT investment was possible only due to the financial support of the state. Cities are tempted to frame their strategic goals in ways that may lead to a sustainability fix (Jokinen et al., 2018). By this, we mean that sustainability goals are biased towards the economic sustainability of the city.

Localising the Environmental State We started by recognising the drivers of change in Nordic environmental policy and discussing the recent conceptual reframing from the welfare state to the environmental state (Hirvilammi, 2020; Meadowcroft, 2005, 2012; Schoyen et al., 2022). Our goal was to offer another viewpoint on this conceptual discussion, emphasising the role of Finnish cities as key policy players in the green transition. This argument has been supported by a significant body of research showing that cities play a crucial role in the governance of global environmental challenges (Bulkeley et al., 2021). While welfare state development in the Nordic countries was strongly led by national legislation, the environmental state objective was based on

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making tempting strategic recommendations and providing economic incentives to cities and city regions. The regulatory functions of the environmental state (Meadowcroft, 2005) become evident in cities. The relationship between the state and cities is not straightforward but depends on (a) the cities’ activity and leadership agency in steering strategic-level policy processes; (b) the cities’ collaborative practices in environmental problem framing, policy formulation and implementation; and (c) the ways cities utilise global networks and benefit from the contributions to urban policies from the state and the EU. Multiple research perspectives are required to understand the green transition taking place in the Nordic context. Leading cities have the initiative in Finnish climate policies and solutions. Their target is to be climate-­neutral clearly before the state target is achieved. Biodiversity has also gained more weight, as the NUP process shows. Interestingly, analysing these practices enables us to uncover the unintended consequences of policy processes that are potentially detrimental to some actor groups and lead to unequal urban development. While city-level policies attempt to answer global environmental challenges, they simultaneously produce a new kind of inclusivity problem. The densification of Finnish cities has led to increasing housing prices when the properties are close to the LRT or urban green parks. Thus, the Nordic welfare model, which includes equal housing and access to urban green areas for all dwellers, has become threatened, even though the objective has been to create just sustainable urban development (Leino et al., 2022). Our illustrative examples of climate and biodiversity policies highlight the inescapable difference in the dynamics of climate change implementation versus the realisation of biodiversity policy issues. The viewpoint on local practices highlights new policy trajectories for biodiversity implementation, which are less advanced in comparison to climate policy in cities (Bulkeley et al., 2021). However, the practice-based approach not only illustrates the challenges of climate and biodiversity policy implementation but also helps in finding context-specific solutions in  local policy processes. The differences in implementation between cities can increase the visibility of the diverse paths taken and open up new avenues for urban sustainability. This has been realised, for example, in the variety of ways in which Finnish cities have adopted the NUP policy and have found new ideas for its application (Finnish National Parks, 2017).

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The nature of governing environmental policy has changed substantially since the development of the Nordic welfare state. Along with the discussion on the environmental state, environmental policies have grown to be part of the multi-level governance system, starting from international-­ level agreements and being implemented on the national, regional and city levels. It is important to note that the multi-level governance of environmental policies not only takes place hierarchically; it is increasingly occurring horizontally across different local administrative sectors, neighbourhood communities and so on (Bulkeley et al., 2021). For this reason, it is crucial to identify novel possibilities arising between sectoral streams of urban green transformation, particularly those having the potential for policy processes that can promote both climate and biodiversity goals at the same time (e.g. Xie et al., 2022). To conclude, the historical legacy of the Nordic welfare state shapes many focal points in urban green transitions, including social justice, employment and economic growth. An inconvenient truth is that economic growth and biodiversity are in serious conflict (Otero et al., 2020). Economic growth is the main driver of global biodiversity loss, particularly via the use of natural resources, and cities account for 75% of natural resource consumption. Therefore, it is problematic that the desired environmental state depends on economic growth. This conceptual discussion is useful when targeting the common sustainability goals of society. However, this discussion should emphasise the ways in which material growth can be transformed into qualitative changes that make ecological transformation possible.

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Olsson, A., Hildingsson, R., & Khan, J. (2020). The green economy and the Nordic welfare state: Reconceptualizing green economy narratives from a Nordic perspective. Lund University. Otero, I., Farrell, K. N., Pueyo, S., Kallis, G., Kehoe, L., Haberl, H., Plutzar, C., Hobson, P., García-Márquez, J., Rodríguez-Labajos, B., Martin, J.-L., Erb, K.-H., Schindler, S., Nielsen, J., Skorin, T., Settele, J., Essl, F., Gómez-­ Baggethun, E., Brotons, L., et al. (2020). Biodiversity policy beyond economic growth. Conservation Letters, 13(4), e12713. Rice, J. L., Cohen, D. A., Long, J., & Jurjevich, J. R. (2020). Contradictions of the climate-friendly city: New perspectives on eco-gentrification and housing justice. International Journal of Urban and Regional Research, 44(1), 145–165. Røe, P., Kjærås, K., & Haarstad, H. (2022). The spatialities of the Nordic compact city. In P. Jakobsen, E. Jönsson, & H. G. Larsen (Eds.), Socio-spatial theory in Nordic geography (pp. 191–205). Springer. Sääksjärvi, S. (2020). Positioning the Nordic countries in European Union environmental policy. The Journal of Environment & Development, 29, 393–419. Schoyen, M. A., Hvinden, B., & Leiren, M. D. (2022). Welfare state sustainability in the 21st century. In M. A. Schoyen, B. Hvinden, & M. D. Leiren (Eds.), Towards sustainable welfare states in Europe: Social policy and climate change (pp. 2–27). Edward Elgar. Slätmo, E., Nilsson, K., & Huynh, D. (2021). The role of the state in preserving urban green infrastructure: National urban parks in Finland and Sweden. Journal of Environmental Planning and Management, 65(10), 1–21. Tunkrova, L. (2008). The Nordic countries’ ‘exceptionalism’ in EU environmental policy. Contemporary European Studies, 2, 21–47. Virtanen, M., Reinekoski, T., Lahikainen, L., & Lehtonen, T. K. (2022). Travels and trials of climate knowledge in Finnish municipalities. Science & Technology Studies, 35(1), 2–20. Wagenaar, H., & Cook, S.  N. (2003). Understanding policy practices: Action, dialectic and deliberation in policy analysis. In M. Hajer & H. Wagenaar (Eds.), Deliberative policy analysis: Understanding governance in the network society (pp. 139–171). Cambridge University Press. Xie, L., Bulkeley, H., & Tozer, L. (2022). Mainstreaming sustainable innovation: Unlocking the potential of nature-based solutions for climate change and biodiversity. Environmental Science & Policy, 132, 119–130.

PART V

Conclusions

CHAPTER 18

Finnish Public Administration: Past, Present and Future Jan-Erik Johanson, Elias Pekkola, Marjukka Mikkonen, and Mikko Mykkänen

Introduction In this concluding chapter, we summarise the main findings and conclusions of the book based on a straightforward analytical input–throughput– output framework. First, we offer a concise description of the main aspects of government, the economy and civil society in Nordic countries. Second, we discuss the changes to and characteristics of the input side of the government apparatus in democratic processes. Third, we turn our interest to the throughput of the system, mainly public administration and management. Fourth, we discuss the output side of the story and turn our interest to public service delivery. We examine these parts of the politico-­ administrative system by analysing multiple levels of governance and discussing the intersection and integration of the different layers and parts of the system.

J.-E. Johanson (*) • E. Pekkola • M. Mikkonen • M. Mykkänen Tampere University, Tampere, Finland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4_18

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In strategic states, the different parts of society are not hierarchical. Instead, they are in a process of co-evolution, which changes each one’s area of operation. At times, some parts may dominate the scene, but in the overall order of things, a strategic state governs through softer means, such as network organisation, moral contracts and leadership effort. In ideal terms, the strategic state works as a catalyst to guide social learning while allowing the economy and society to occupy their own terrain as independently as possible (Johanson, 2019; Paquet, 1999). The administrative system lives and breathes in this context. Through its connections to democratic processes and citizen participation, the system is integrated into civil society. The regulative role of administration connects it with the economy by acting, shaping and creating markets. By no means is the politico-administrative system developed in a vacuum, nor does it form a hermetic subsystem of society; it is an essential part of a functioning society in between markets and politics. This complex nature of administrative systems is naturally reflected in their reforms, resulting in complex, layered ideas and practices that shape the present system, as discussed by Ejerbo et al. (Chap. 2 in this volume). Within government, the chapters of the book have covered a number of policy areas within Finnish public administration (such as innovation, education, higher education, social and healthcare and environmental policy; see Part IV of this book). The findings have pointed out the challenges, problems and even paradoxes in the operation of the public administration. However, the public administration has also shown determination and the will to overcome such predicaments. Some of the aspects of honest, effective and proactive government are shared among all Nordic countries. Most notably, the careers of bureaucrats and politicians seldom cross paths in any of the Nordic countries, which is argued to be one of the key ingredients of efficient, reform-oriented and non-corrupt government (Dahlström & Lapuente, 2017). In these circumstances, bureaucrats are able to ‘speak truth to power’ and politicians can discipline bureaucrats to the proper extent without the fear of the difficulties this might cause in later moving over to the other side of the politics–administration divide. In this way, the functional structures of government partly originate from the fruitful and separate career patterns of both civil servants and politicians. Within the economy, the liberalisation of market economies and market-­ emulating reforms in government have not followed a single route, nor have different countries adopted similar measures to adapt to

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changing circumstances, but Nordic countries share similar direction in changes in respect to industrial relations. Within the bargaining system, the previous agreement, which balanced full employment with moderate wage increases, has been abandoned in Nordic countries, but the comprehensive education system enables workers to acquire new skills and find new employment when necessary. This embedded flexibilisation in Nordic countries has not had a marked influence on equality (Thelen, 2012). In civil society, the evolution of communities poses challenges for future developments in Nordic countries. Although Nordic countries possess high levels of social capital within their civil societies (see, e.g., the World Values Survey [WVS, 2018]), aggregate compilations of community-­ level indices cannot provide a reliable image of civil society. It is possible to have fully functional communities that support economic growth and political stability in one location, while dysfunctional, unsupportive communities exist in another part of the same country. In the Nordic countries, local governments enjoy considerable independence in comparison to most other countries, but the difference in population density between the South and North in Sweden, Norway and Finland has historically demanded local adaptations and selective government action. The modern developments of increasing immigration, intensified urbanisation and ageing populations have placed new demands on local communities in their efforts to preserve internal social cohesion and functional intercommunity relationships. In democratic systems, government structures typically follow the division between the executive, legislative and judicial systems. Most often, the fundamental structural aspects of government, such as the role of the head of state, prime minister, cabinet of ministers, parliament and courts, are described by legal statutes that enjoy a constitutional position and are therefore difficult to change. Small incremental changes from the point of origin showcase many government reform efforts, but sometimes, the accumulated demands for change result in revolutionary change through the punctuation of the existing equilibrium. Market reforms, deregulative reforms and participatory reforms are the most-used mechanisms to change structures of government (Peters, 1996). However, as discussed in the framework provided by Ejerbo et  al. (Chap. 2 in this volume), the reforms in the Nordic model seem more layered, complex and hybrid instead of them being fundamental replacements. Rather, new elements are added into the prevailing systems and structures. Table  18.1 summarises the main themes and insights of this volume. The themes and

Table 18.1  The main insights and themes covered in the volume Finnish public administration and the Nordic model (Part I) • The pattern of reforms in Nordic countries appear as an active, complex and layered phenomenon, which has resulted in a complex, mixed governance structure. Nordic governments thus appear as agile and adaptive systems. •  An ethos of transparency is the shared building block between the Nordic countries. Structures and Space: Governing Polity (Part II) • The Finnish government model is aligned with that of its Nordic neighbours by emphasising transparency and trustworthiness in public administration. • The Finnish administrative system has changed from a two-tier system into a three-tier system. The reform follows (partially) the example of other Nordic countries as an economies-of-scale line of thought took over local-/small-scale service provision. • The role of municipalities is changing, and the conception of local identity, citizenry and political participation is in transition. • The power balance between regions (in different meanings), municipalities and the state has been reshaped and the current status quo is being challenged. • The role of the European Union is increasing through legalistic development and shared security threats. Steering Mechanisms (Part III) • Managing performance in the contemporary public administration requires a multi-level understanding of performance beyond the performance of organisational units. Public sector performance is defined in new non-financial figures and performance. This is changing the substance and subjects of public accountability. • International agreements and treaties, such as human rights treaties, create the boundaries and possibilities within which national policymaking and public administration take place. This seemingly technical and legal development is changing the citizenry and civil service ethos and deepening European integration without explicit political manoeuvres. • The new county structure challenges the role of municipalities and questions political rights (and financial autonomy) as fundamental rights of self-governing regions that are built in order to achieve equal social rights. The political identity of counties in between municipalities and the state remains to be seen. • Softer approaches, such as enhancing public sector employees’ perceived meaningfulness, contribute to the meaningfulness of public services. Furthermore, developing co-competencies supports cross-organisational collaboration and breaking the siloed nature of the Finnish public administration. Process and Actors: The Essence of Finnish Policy (Part IV) • Global challenges, such as the ageing population and climate crises, as well as Nordic values, such as social justice, also impact Finnish policymaking. • The consensus-prone Nordic welfare state aiming at societal equality, corporatist solutions and the acknowledgement of citizen participation can be approached in Finland through concepts such as the environment state, innovation systems, educational equality and bildung and comprehensive security, as well as more traditional social and healthcare discourses. • The ethos of performance and competition has gained importance but can also be aligned with the Nordic ideas of transparency and equality. However, there are also conflicts between ‘new’ and ‘old’ governance logics. • Nordic transparency and equality can be interpreted differently in different policy sectors, even within the educational system, as is the case for preschool, primary and secondary education and higher education.

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insights are further elaborated in the following sections of this chapter on democratic structures and processes, administrative structures and processes, and services.

Inputs: Democratic Structures and Processes With input reforms, the aim is to achieve better democratic practices in a number of ways (Vetter & Kersting, 2003; Loughlin et  al., 2011), for instance, by strengthening more direct influence (e.g., referendums), reforming representative democratic practices (e.g., digital systems, change in electoral principles), increasing participation (e.g., deliberative practices, sub-urban forums, co-production, participatory budgeting), and with reforms changing the balance between democratic levels (such as between supra-national institutions [e.g., the EU] and national and local governments). The constitutional reforms executed in Finland by the end of the first millennium not only unified the fragmented nature of Finnish constitutional documents originating from the beginning of independence into a coherent whole but also meant a new division of powers within the apex of government. In practice, the role of parliament and the cabinet holding the majority in parliament gained strength, which diminished the role of the president in domestic affairs. Furthermore, the constitutional reforms extended human rights from traditional liberties to economic, social and cultural liberties following the international example. In this sense, the Finnish Constitution extends the civil liberties offered by other Nordic countries (See Chap. 10 in this volume). Consequently, human rights have become a more important topic of discussion, both in legal debates and in public discussion. The local government has traditionally enjoyed a strong legal status similar to the other Nordic countries. In addition, it has been responsible for the extensive provision of public services; however, as an outcome of the 2023 social and healthcare reform, the role of local governments as service providers is diminishing. Urbanisation has led to the increasing desolation of many already sparsely populated areas, which is further boosted by the ageing population and low levels of fertility. The population tends to concentrate in major cities in the southern part of Finland. The cities are expected to provide regional vitality, but they are also expected to function as economic engines, spreading financial gains throughout the country. The reliance on the capabilities of cities in

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radiating wealth and activity into the surrounding areas is not without caveats, as the development of infrastructure and facilities takes place according to the perspective of the regional centre, which tones down the democratic voice and interests of surrounding areas and more remote locations (See Chap. 5 in this volume). The only administrative reform trend common to all Nordic countries is transparency (See Chap. 2 in this volume). This finding taps into the values guiding the doctrine of the rule of law expressed by procedural principles of administrative law, such as fairness, legality, consistency, rationality and impartiality. Within the Nordic context, the value of openness holds constitutional status and represents a fundamental right of citizenship but has progressed slowly elsewhere. In contrast, the value of participation is weakly protected in the Nordic and most other administrative law regimes (Harlow, 2006). The key insight from the chapters in this regard was the growing focus on more direct methods for citizenship participation in the public administration, on top of the continuous concern for transparency. It seems that the ethos of public administration is on the move from citizens as subjects, through to citizens as clients, to citizens as potent and independent actors in their own right. The development of the conceptions of citizens per se is also an interesting area of study in the Finnish landscape. The discussion on citizenship has centred, on the one hand, on the Finnish tradition of the Hegelian (locally adapted by J. V. Snellman) conception of citizens as representatives of the national ethos and, on the other hand, on the discussions of citizens as active political actors and constituents of the state. In administrative sciences, the discussion has mainly covered different topics related to the agency of citizens. In practice, the Finnish public administration has launched several pilot projects and new practices aimed at increasing the participation of citizens in decision making (e.g., the assessment of environmental impacts, direct democracy initiatives, client democracy and other forms of local and organisational representation) and involving citizens in service design and production. Meanwhile, there are a variety of projects and pilots aimed at activating citizens as voting activity is decreasing and there are increasing difficulties in recruiting citizens to participate in formal forums of representative democracy. Furthermore, the polity of participation is challenged in contemporary society. The traditional forum of democracy in municipalities is in transition, and the role of well-being services counties in relation to participation and identity building is only in its nascent form. From the legal

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perspective, the new counties have a clear formal role in Finnish democracy (Chap. 9 in this volume), but the political nature of this ‘county citizenship’ will be constructed in the upcoming years. It will be interesting to see whether the nature of counties will incline towards ‘client representation’ or whether they also form a political identity. Moreover, an intriguing question for the future is what the democratic and political nature of counties will be compared to municipal democracy, national democracy and the so-called regional citizenship discussed by Häkli et al. (Chap. 5) in this volume. Discussions around citizenship have been rather national in Finland, regardless of the de facto EU citizenship of Finnish citizens. The discussion on supra-national citizenship is often held in the context of EU studies or in administrative relations, rather than in the context of constituting one’s identity. However, in civic discussions powered by interest groups, Finnish citizens are more often framed in the context of international human rights and declarations instead of national legislation. This human rights-related juridical discourse connects and integrates Finnish citizenry with international and European citizenries (see Chap. 10 in this volume).

Throughputs: Administrative Structures and Processes Structural reforms are a traditional way of governing the future. The explicitly stated aims of structural reforms are often related to efficiency, democracy, service quality and identity. In this way, reforms offer a tangible way to communicate the plans of the public sector and society to citizens. The difficulty of radical changes to existing structures implies that the reforms often increase complexity. There are multiple ways to categorise reforms that aim for change in the future. Basically, the reforms can focus on the input or output side of the policy (cf. Bouckaert & Kuhlmann, 2016; Inglehart, 1977), but the implementation process signifies the transformative mechanism through which the reforms come into being. The transformation of the semi-presidential system to ‘European’ prime minister-centred parliamentarianism has increased the accountability of government to parliament and strengthened representative democracy. However, this has also created challenges. The prime minister faces the problem of quasi-impenetrable walls between ministries when managing the government (Gerton & Mitchell, 2019). This challenge has

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created the need to increase the co-ordinating role of the Prime Minister’s Office and formalise the unity of government as the prime minister’s government. The increased importance of the government programme has two perspectives. On the one hand, the programme has been presented as a remedy for solving the lack of horizontal co-ordination between the separate ‘stovepipes’ of different branches of government. On the other hand, the programme is seen as ensuring the commitment of government coalitions to shared goals and spending limits (See Chap. 3 in this volume). The long-awaited social and healthcare reform has resulted in the establishment of a new regional government level in the Finnish administrative landscape. The social and welfare services counties became fully operational at the beginning of 2023. In practical terms, this has transformed the Finnish government from a two-tier system to a three-tier system (see Chap. 4 in this volume). The change from a highly decentralised model into a regional model of providing social and healthcare services emulates the reforms and practices in other Nordic countries (see Chap. 6 in this volume). However, the social and healthcare reform contains a number of tensions, dilemmas and even paradoxes. The contradictions in decision making are prone to producing unintended negative consequences, political disagreements, a lack of local perspective and the dominance of health issues over matters of social well-being (see Chap. 15 in this volume). The innovation policies of industrialised nations have progressed through three main phases. The first phase, after the Second World War, was signified by a linear model from basic research to applied research, resulting in commercial applications. The role of the government was to correct market failures by making investments in basic research. The innovation system approach characterised the developments from the 1980s until the first decade of the new millennium. The government approach was built on programme-based interactions between universities, the government and public authorities to create marketable products in a more direct and collaborative fashion. The current era is based on a missionary ethos. Instead, the innovation effort is guided by a contractual basis instead of programmes. The government relies (at least to some extent) on single companies and platform operators to drive the success of whole ecosystems with the aim of transformative change (see Chap. 12 in this volume). A comparison between OECD countries shows that Nordic countries have faced different challenges in their innovation policy formation in relative terms. Finland and Norway represent two different poles in the continuum. Finland stands out favourably in technology development,

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but has fared relatively poorly in the creation of commercial products, whereas Norway has succeeded relatively well in commercialisation but suffered from poor technology development. Denmark and Sweden show a more balanced path in developing and commercialising new technologies (Guan & Chen, 2012). Finnish security policy has evolved from emphasising purely military affairs to a more comprehensive view of security that is also embraced in other Nordic countries. The approach includes a wide array of issues related to being prepared for different kinds of disruptions affecting the functioning of society (such as continuance of leadership, security of supply, defence capability, internal security and psychological resilience). However, the geopolitical position of Finland, having a long border with Russia combined with a history of wars, underlines the importance of military preparedness more in Finnish security policy than in other Nordic countries (see Chap. 16 in this volume). The implication of Finland and Sweden joining NATO is the foreseeable integration of the security approach among Nordic countries and, more broadly, within the northern part of Western Europe. This further emphasises the fact that Finland is located next to one of the world’s former military superpowers. Therefore, we need to acknowledge the importance of the basic functions of the state related to its security and territorial sovereignty. This is something that Finland has done well in modern times when compared to other Western nations. Still, it remains tentative. Has it ultimately been a sufficient determination vis-à-vis the actual problem? Within the financial management of the government, accounting practices have unified central and local governments, and the government has adopted accounting methods employed by private enterprises. Budget steering has evolved from results-based control to performance-based control. The noble goal of many changes in financial management and public accounting has been to better match processes in the circulation of money with the real-life processes involved in the provision of public services (see Chap. 7 in this volume). Finland is an example that illustrates how performance thinking can be combined with the Nordic ethos. The higher education sector that still emphasises bildung alongside competitiveness and innovativeness is one of the most performance-based public systems globally (see Chap. 13 in this volume). Regardless of generic capitalism criticisms often related to managerialism in Finnish higher education, 40% of senior Finnish academics consider that performance measurements increase transparency and fairness, while only one-third

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disagree with it (Kivistö et al., 2017). This example shows that a performance orientation can be aligned with the idea of Nordic transparency when it is implemented in a professionally meaningful way. Despite the positive advancement in methods of financial management, measuring performance is not a straightforward task, even with advanced methods of calculation. First, the increased number of measurement instruments complicates interpretation as the number of possible indices for evaluation and judgement increases. Second, performance measurement has a role in orienting and assessing the overall progress of society, which faces challenges in organising performance management in a way that would enable better co-ordination between branches of government and in better acknowledging the interaction between government and other parts of society. The former challenge deals with the unused potential of horizontal co-ordination and the latter has to do with only a rudimentary understanding of the value of hybrid activities between government and society (see Chap. 8 in this volume). The role of municipalities in Finnish administrative systems is in flux (See Chaps. 4 and 6 in this volume). In the 2023 reform, bureaucracy, resources and the production of welfare and rescue services were transferred to well-being services counties. However, the municipalities continue as important actors in managing and operating many public duties. In this volume, Sahamies and others discuss the future direction of municipalities in taking care of their tasks. One of the most interesting avenues for discussion is the idea of the municipality as a platform. Elsewhere, Haveri and Anttiroiko (2021) have studied urban platforms as a type of governance. The platforms are spaces for opportunity seeking, match making and audience building. It will be fascinating to see how the development of Finnish local administrative units (municipalities) pans out and whether their role will change from the administrative structure, market regulator and service provider role towards the role of a facilitator and accelerator in a platform structure. Furthermore, the development trajectory of platform governance (if it happens) in peripheral areas, where the number of possible actors is small and there are only limited potential synergies that could be matched for economic and social acceleration, provides an intriguing perspective for future studies, as this kind of development could lead to a divergence in the development of the role of the municipality as a part of governance. Administrative institutions are not only structures and processes, but also constructions of individuals. Thus, administrative structures and

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organisations have direct connections to the political side of the system, namely the democratic nature and legitimacy of public services, in addition to the actual content of the services. Regarding administrative reforms, the times call for ‘seeing the wood for the trees’. The public services previously provided by the (often small) municipalities for their local communities have now been transferred to the counties. Most likely, this will have implications for public service motivation, identity and the tasks of civil servants and other public employees because of changed structures and the additional workload (See Chap. 15 in this volume). Because it is people who create the administrative apparatus and its ethos (also in the public sector), the way civil servants and other public sector employees make sense of the surrounding society and experience meaningfulness matters.

Outputs: Public Services Output reforms concentrate on the nature of service delivery. The public service reforms may either relate to a change in the overall production system or to changes in the actual delivery of the services exemplified, for instance, by the service mix between government, business and civil society (Koprić & Wollmann, 2018). The output-oriented reforms may also aim to unleash the potential of the disregarded policy issue. In this case, one possible focus might be on supporting new and more innovative entrepreneurial activities (Leigh & Blakely, 2016). Nordic countries share the main aspects of a welfare state that embraces universalistic service provision, support for collective bargaining among social partners and the extensive provision of public services. The resulting model has been able to integrate government, the economy and civil society to advance wealth and social well-being. Climate change and the growing importance of sustainability have awakened the need to incorporate the physical environment into the notion of society. It is clear that such an incorporation is in conflict with some economic activities and could pose new problems in terms of maintaining equity (See Chap. 8 in this volume). Leino et al. outline such bottom-up development in cities (See Chap. 17 in this volume), signifying a change from a welfare state to an environmental or sustainable welfare state. The case example of light rail transit illustrates the influences of climate change and sustainability on policy development and the existing welfare model. Consequently, light rail transit eases up urban congestion, decreases pollution and liberates citizens

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from their dependency on the use of cars, but at the same time, public transit systems segregate neighbourhoods according to wealth linked to the proximity of the public transit. In sum, climate deprivation and sustainability poverty might be some of the future challenges surrounding equity, in addition to the more traditional debates of the distribution of wealth and access to public services. Furthermore, Paananen et al. (See Chap. 14 in this volume) provide another example of the relationship between structures and space affecting social justice and equality. They show how the possibility of tackling inequalities largely depends on the structure of the welfare state, including its administration and governance. Consequently, the ability of, for instance, educational policies to address inequities varies between locations. The chapters in this book strengthen the ideas put forward at the beginning of the book. Nordic administrative reforms are often characterised by complexity and tend to be based on a combination of external and internal factors. Even if the reforms employ characteristics of paradigms, such as the market-emulating reforms of the past and collaborative changes in the present, they tend to be a mixture of different reform packages rather than distinguishable ideal examples of those. They are based on a pragmatic strategy. Instead of replacing older systems and structures, the reforms tend to build on one another. In other words, new institutional elements are layered on top of existing ones (Streeck & Thelen, 2005). As an example, the Finnish social and healthcare reform and the establishment of a regional level of governance or constitutional change are not altogether easy to pigeonhole into a specific model of change. On the one hand, they could be seen as resulting from continuous development via piecemeal attempts to alleviate the deficiencies of the functioning of the government and the delivery of services, but on the other hand, they can also be seen as revolutionary changes or as a type of punctuated equilibrium where bursts of change occur due to the increasing pressure to suit the requirements of an expanded government and to cater to the needs of the rapidly ageing population. * * * To conclude, Finland has demonstrated both the integrity and efficiency of its government. It is co-ordinated in terms of the economy, and its citizens enjoy a high level of social capital within civil society. There is a genuine reason for northern complacency in this respect. All Nordic societies

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provide economic structures for superior wealth generation, governance structures for an efficient, honest and proactive public sector, and social structures, which enable both the formation of cohesive communities as well as the building of fruitful bridges between these communities. Not only do the parts of society work well, but the interconnections also seem to operate by producing fruitful outcomes. Here, Nordic countries represent a more or less realistic archaic image of the mythical northern Hyperboreans, who lived ‘beyond the north wind and the Rhipean mountains’ (Bridgman, 2004, p. 70) where the sun shone all year round and where the population was happy, lived long and was able to enjoy a munificence of resources.

References Bouckaert, G., & Kuhlmann, S. (2016). Introduction: Comparing local public sector reforms: Institutional policies in context. In S. Kuhlmann & G. Bouckaert (Eds.), Local public sector reforms in times of crisis. Governance and public management. Palgrave Macmillan. https://doi.org/10.1057/978-­1-­137-­52548-­2_1 Bridgman, T. (2004). Hyperboreans: Myth and history in Celtic–Hellenic contacts. Routledge. Dahlström, C., & Lapuente, V. (2017). Organizing leviathan: Politicians, bureaucrats, and the making of good government. Cambridge University Press. Gerton, T., & Mitchell, J. (2019). Grand challenges in public administration: Implications for public service education, training, and research. Journal of Public Affairs Education, 25(4), 435–440. https://doi.org/10.108 0/15236803.2019.1689780 Guan, J., & Chen, K. (2012). Modelling the relative efficiency of national innovation systems. Research Policy, 41(1), 102–115. https://doi.org/10.1016/j. respol.2011.07.001 Harlow, C. (2006). Global administrative law: The quest for principles and values. European Journal of International Law, 17(1), 187–214. https://doi. org/10.1093/ejil/chi158 Haveri, A., & Anttiroiko, A. V. (2021). Urban platforms as a mode of governance. International Review of Administrative Sciences, 89(1). Inglehart, R. (1977). Values, objective needs, and subjective satisfaction among western publics. Comparative Political Studies, 9(4), 429–458. https://doi. org/10.1177/001041407700900403 Johanson, J.  E. (2019). Strategy formation and policy making in government. Palgrave Macmillan. Kivistö, J., Pekkola, E., & Lyytinen, A. (2017). The influence of performance-­ based management on teaching and research performance of Finnish senior

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academics. Tertiary Education and Management, 23, 260–275. https://doi. org/10.1080/13583883.2017.1328529 Koprić, I., & Wollmann, H. (2018). Evaluating reforms of local public and social Services in Europe. In I. Koprić, H. Wollmann, & G. Marcou (Eds.), Evaluating reforms of local public and social Services in Europe. Governance and public management. Palgrave Macmillan. https://doi.org/10.1007/978-­3-­319-­61091-­7_1 Leigh, N., & Blakely, E. (2016). Planning local economic development: Theory and practice. Sage. Loughlin, J., Hendriks, F., & Lidström, A. (2011). In I. J. Introduction, F. H. Loughlin, & A. Lidström (Eds.), The Oxford handbook of local and regional democracy in Europe. Oxford University Press. Paquet, G. (1999). Governance through social learning. University of Ottawa Press. Peters, B. (1996). The future of governing: Four emerging models. University Press of Kansas. Streeck, W., & Thelen, K. (Eds.). (2005). Beyond continuity: Institutional change in advanced political economies. Oxford University Press. Thelen, K. (2012). Varieties of capitalism: Trajectories of liberalization and the new politics of social solidarity. Annual Review of Political Science, 15, 137–159. https://doi.org/10.1146/annurev-­polisci-­070110-­122959 Vetter, A., & Kersting, N. (2003). Democracy versus efficiency? Comparing local government reforms across Europe. In N. Kersting & A. Vetter (Eds.), Reforming local government in Europe. Urban and research international (Vol. 4). VS Verlag für Sozialwissenschaften. https://doi.org/10.1007/978-­3-­663-­11258-­7_1 World Values Survey (WVS). (2018, September 2). World values survey [Homepage]. Retrieved from http://www.worldvaluessurvey.org/wvs.jsp

Index

NUMBERS AND SYMBOLS 2030 Agenda for Sustainable Development, 128

Auditing, 11, 111–125 institutions, 113, 120–123 reforms, 128

A Accountability, 11, 27, 39–41, 52, 78, 87, 111–125, 128–131, 215–226, 272, 298, 301 Accrual accounting, 112, 113, 125, 130 Accrual-based budgeting, 113, 117–120 Adaptivity, 256–259 Administrative institutions, 16, 304 Administrative levels, 17, 20, 24, 25, 57, 143, 152, 153, 249 Administrative traditions, 19, 27, 28, 36, 49, 93, 252 Affirmative remedies, 236, 239 Agencification, 22, 28, 103 Åland Island, 103, 145, 147 Association of Local Authorities, 115

B Balance sheet, 116, 118, 122 Biodiversity conservation, 284, 285 Biodiversity policy, 284–287 Bottom-up, 21, 24, 26, 192, 193, 254, 282, 305 Branch of government, 61–62 Budget expenditure, 48 Budgeting, 11, 12, 64, 65, 96, 111–125, 128, 130, 136, 283, 299 Budget process, 42 C Cabinet, 19, 36, 44–46, 52, 63, 297, 299 Central agencies, 16–17, 19, 20, 49, 60, 65, 66

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 E. Pekkola et al. (eds.), Finnish Public Administration, Governance and Public Management, https://doi.org/10.1007/978-3-031-34862-4

309

310 

INDEX

Central government, 11, 15, 19, 20, 22, 40, 50, 51, 57, 58, 60, 64, 69, 70, 72, 95, 101, 112–114, 116–118, 120–125, 129, 220, 240, 253 Chancellor of Justice, 40, 41, 165, 166, 173 Chief executive, 71, 98 Citizen participation, 7, 9, 22, 78–81, 84–88, 105, 272, 273, 296, 298 City, 70, 77, 97, 131, 153, 182, 197, 250, 280, 299 City-regionalisation, 9, 77–88 City regions, 77–84, 86, 88 Civic participation, 77–88 Civil servants, viii, 5, 12, 16, 19–21, 42, 45, 49–51, 53, 60, 71, 282, 296, 305 Civil service, 26, 35, 36, 49–53, 298 Civil society, 5, 7, 19, 79, 105, 127, 132, 167, 168, 268, 272, 295–297, 305, 306 Client representation, 301 Climate change, 4, 13, 117, 251, 266, 280, 284, 287, 305 Components of customer value, 185, 186 Comprehensive security, 13, 265–274, 298 Constitution, 4, 36, 37, 39, 44, 50, 52, 94, 122, 145–156, 161, 162, 165, 168, 222 Constitutional Law Committee, 40, 41, 49, 143, 149–155, 162, 164–166, 168, 171 Constitutional reform, 168, 299 Contracting out, 18, 22, 26, 27, 103, 128 Convention, 160, 161, 282 Co-ordination, 27, 29, 46, 63–65, 72, 96, 98, 129, 131, 135, 137, 148, 171, 189, 202, 302, 304

Corruption, 51, 117 County citizenship, 301 Customer value, 180–187, 189–192 D Defence policy, 266, 272 Deliberation, 50, 271, 273, 274 Democratic institutions, 13, 149 Demographic shifts, 101–102 Denmark, viii, 24, 25, 27, 104, 220, 224–226, 231, 303 D’Hondt method, 37 Digital governance, 27 Digitalisation, 5, 22, 94, 102, 104, 183 Digital platforms, 200 E Ecological dimension, 268 Economic development policy, 11, 104 Economy, 4, 23–25, 27, 60, 71, 73, 99, 100, 103, 104, 119, 128, 130, 132, 133, 136, 198, 201, 204, 208, 210, 234, 243, 253, 269, 280, 281, 295, 296, 305, 306 Ecosystems, 13, 100, 102, 200, 201, 207–211, 302 Education, vii, viii, 11, 12, 67, 69, 71–73, 98–100, 102, 104, 166, 167, 183, 184, 200, 202, 215–226, 231–245, 270, 271, 274, 282, 296, 297, 303 market, 217 policy, 12, 215–226, 233, 306 Effectiveness, 9, 81, 119, 128, 130, 132, 136, 218, 222, 226, 256 Efficiency, 27, 128, 130, 218, 222, 226, 254, 255, 301, 306

 INDEX 

Elections, 7, 37, 38, 43, 70, 71, 98, 99, 122, 123, 149, 152, 153 Embedded flexibilisation, 297 Employee competencies, 192 Entity-based, 136 Environmental policy, vii, 13, 280–284, 286, 288, 296 Environmental state, 13, 279–288 Equality, 6, 117, 151, 162, 179, 181, 216, 217, 231, 232, 239–243, 266, 279, 284, 285, 297, 298, 306 Ethics, 36, 49–51, 53, 272 EU affairs, 37 European Union (EU), 3, 36, 42, 52, 63, 64, 72, 102–103, 117, 148, 163, 206, 217, 269, 280, 283, 284, 287, 298, 299, 301 Expansive learning, 257–259 Explores regional self-government, 11 F Finnish jurisprudence, 147 Finnish National Parks, 285, 287 Finnish public administration, vii, viii, 3–13, 35, 36, 49, 53, 57–73, 93, 128–130, 249, 295–307 Fiscal federalism, 100 Fiscal policy, 122, 123 Foreign policy, 37, 43, 171, 266 Frame budgeting, 64 Fundamental rights, 41, 79, 149–151, 154, 156, 160, 162, 165, 166, 168, 170, 171, 298, 300 Funding system, 95, 224 G Gender, 117, 172, 237, 239–241, 243 Governance, vii, 5, 16, 63, 78, 94, 111, 128, 145, 198, 215, 254, 265–275, 280, 295

311

Governance reforms, 6, 13, 215 Government, vii, 4, 15–29, 35, 44–48, 57, 79, 93–105, 111, 120–123, 127–138, 149, 161, 198, 217, 233, 249, 267, 295 Government programme, 5, 36, 37, 43, 46–48, 52, 63–65, 134, 135, 151, 170, 209, 210, 269, 302 Green economy transition, 280 Green gentrification, 284 Green transition, 279–288 Growth Engine programme, 210 H Healthcare, vii, 11, 12, 41, 67, 69, 71, 72, 96, 97, 99, 100, 102–104, 129, 143–146, 150–155, 165, 249–259, 282, 296, 298, 299, 302, 306 Higher education, 12, 215–226, 296, 298, 303 Higher education policy, 12, 215–226 Horizontal co-ordination, 64, 302, 304 Human rights infrastructure, 164–169 Human rights policy, 11, 159–174 Hybrid forms, 128 Hybridisation, 128 Hybridity, 11, 127–138 Hyperboreans, 307 I Iceland, viii, 19, 24, 25, 27 Infrastructure project, 78, 80, 81, 85 Injustices, 12, 231–245 Innovation ecosystem, 200, 201, 207 Innovation policy, vii, 12, 129, 197–211, 217, 302 Innovation policy mix, 210 Input reforms, 299

312 

INDEX

Institutional change, 18, 20, 21, 26, 152 The Internal security, 266–269, 303 Issue-based budgeting, 117 J Joint county authority, 250 Joint municipal authority, 99, 100, 151, 152, 250 Joint municipalities and regional councils, 71–72 Judiciary, 36, 49, 168 K Knowledge-based economy, 4 L Land-use planning, 72, 78, 80, 81, 84, 86–88, 100, 284, 285 Legislature, 36, 37, 162 Light rail transit (LRT), 78, 281, 284–287, 305 Local authorities, 71, 94, 98, 101, 114, 117, 121, 122, 234, 239 Local democracy, 72–73, 77–88, 98, 150, 152 Local government, 8, 11, 60, 64, 65, 69–71, 80, 93–105, 112–118, 120–125, 129–131, 133, 138, 155, 297, 299, 303 Local Government Act, 97–99, 113–117, 119, 121, 122, 239 Local government finance, 64, 100–101 Local government reform, 96, 104 Local self-government, 93–96, 98, 99, 145, 280 Lump-sum grants, 129

M Management instruments, 16, 17, 20, 23–27 Managerialism, 23, 103, 303 Manufacturing companies, 207 Mayor, 71, 98 Meaningfulness of work, 180–181, 183–193 Meaningful public service systems, 179–181 Ministries, 16, 19, 20, 40, 42–48, 51, 57–60, 63–67, 72, 83, 95, 118, 122, 131, 133, 135, 136, 138, 162, 167, 169, 220, 223, 233, 254, 270 Ministry of Finance (MoF), 47, 48, 50, 51, 58, 59, 63, 65–67, 69, 71, 99, 117, 130, 133 Municipal auditing, 115 Municipal citizens, 86 Municipal council, 71, 72, 99, 131 Municipality, 7, 58, 70–72, 78, 94–95, 98–100, 113, 129, 145, 151–152, 183, 218, 233, 249, 270, 280, 298 Municipal self-governance, 11, 146, 151, 156 N National Audit Office of Finland (NAOF), 52, 64, 122, 123 The National Human Rights Action Plan (NAP), 170 National innovation system, 204, 207 National security, 266, 267, 275 National urban parks (NUP), 281, 282, 284–287 NATO, 303 Neo-Weberian state (NWS), 9, 16, 19, 20, 28, 29

 INDEX 

Networks, 11, 29, 82, 96, 100, 105, 161, 166, 169, 174, 187, 199, 200, 208, 209, 219, 221, 255, 268–270, 273, 274, 282, 283, 285, 287, 296 New public governance (NPG), 9, 16, 17, 19, 20, 22, 26, 28, 95, 100 New public management (NPM), 9, 16, 17, 19, 20, 22–24, 26–28, 95, 96, 148, 215–219, 222, 223, 226 Nordic administrative model, 9, 15 Nordic countries, 4, 8, 9, 15–29, 37, 38, 52, 69, 77–80, 88, 94–96, 104, 144, 145, 162, 206, 210, 215, 231, 243, 252, 265–267, 280, 286, 295–300, 302, 303, 305, 307 Nordic environmental policy, 13, 280, 286 Nordic model, viii, 16, 24, 25, 29, 243, 265, 279, 280, 297, 298 Nordic public administration, 5, 9 Nordic welfare, 3, 80, 128, 160, 217, 221, 231, 252–253, 284, 287, 288, 298 Norway, viii, 22, 24, 25, 27, 38, 104, 224, 231, 297, 302, 303 NPG, see New public governance NPM, see New public management NWS, see Neo-Weberian state O Open government, 6, 22, 111 Organisational dilemmas, 250 Organisational paradoxes, 12, 250–252, 256–259 Other public administration, 36, 69 Output reforms, 305

313

P Parliamentary committee, 38, 42, 164 Parliamentary groups, 42 Parliamentary Ombudsman, 41, 165–168 Parliamentary systems, 18, 36, 47 Performance agreements, 63, 64, 220 Performance-based budgeting (PBB), 12, 112, 118–119, 124, 125, 128, 130 Performance-based funding (PBF), 12, 216, 219–226 Performance goals, 114, 136 Performance management, vii, 11, 22, 25–27, 29, 49, 58, 59, 63, 65, 114, 127–138, 218, 219, 304 Performance management systems, 11, 27, 128–133, 135, 137 Platform governance, 105, 304 Plenary session, 39, 40, 42–46 Policy implementation, 47, 217, 284, 286, 287 Policy instruments, 8, 11, 12, 161, 174, 199, 216, 219–221, 223–225 Policy paradigms, 210 Policy recommendations, 171, 220 Political rights, 4, 162, 298 Politico-administrative system, 7, 11, 35–53, 57, 296 Pragmatism, 4, 18, 22, 26, 29 President, 36, 37, 40, 43–44, 52, 59, 299 Primary education, 233, 234, 237, 240–242 Prime Minister, 5, 36–39, 41, 43–48, 52, 60, 63, 64, 134, 170, 207, 209, 237, 239, 240, 254, 297, 301, 302 Prime Minister’s Office, 40, 44, 47, 48, 60–63, 65, 134, 302 Principle of subsidiarity, 159–174

314 

INDEX

Privatisation, 22, 27, 60, 218 Public agencies, 58, 63, 64, 72, 130, 133 Public financial management, 11, 111–125, 128, 129 Public management reform, 15–29 Public policy, 8, 12, 129, 131, 197–199 Public-private partnership (PPP), 26, 83, 85, 116, 120 Public services, 4, 12, 13, 27, 49, 51, 58, 65, 72, 83, 98, 101, 105, 127–130, 149, 151, 153, 154, 179–193, 219, 236, 254, 295, 298, 299, 303, 305–307 delivery, 13, 27, 128–130, 295 logic, 127 R Rationalities, 129, 133, 135, 300 Recession, 4, 198, 203, 210, 217 Rechtstaat, 18, 27, 266 Redistributive remedies, 233, 235, 236, 238–240 Reforms, viii, 5, 15–29, 36, 58, 95–97, 112, 128, 143, 162, 183, 208, 215, 232, 249, 252–255, 272, 279, 296 Reform trajectories, 16, 18, 19, 25, 26, 29 Regional administration, 47, 57, 66, 146–150, 154–156 Regional citizenship, 301 Regional Council, 71–72, 87, 100, 103, 104, 148, 153 Regional governance, vii, 8, 70, 94 Regionalisation, 79, 94, 103, 148, 217 Regional participation, 87–88 Regional planning, 85 Regional self-government, 11, 143–156

The Regional state administration, 58, 66–69 Regulative control, 222 Resilience, 265, 269, 272, 303 Resource allocations, 47, 130, 223, 225 Right to tax, 151, 153, 155 S Secondary education, 69, 99, 184, 232–234, 237, 238, 298 Security, vii, 4, 13, 52, 64, 65, 72, 162, 171, 265–275, 283, 298, 303 Security Strategy for Society, 267, 269, 272, 274 Self-governance, 69–72, 87, 143–156, 222 Semi-presidential system, 36, 52, 301 Sense of autonomy, 181, 187, 191 Sense of belonging, 181, 188, 241 Sense of contributing, 181 Service municipality, 94–95 Service professionals, 180, 184, 189, 191 Service system, 8, 12, 69, 95, 179–193, 254 Shared responsibility, 159–174 Shared Service Centres, 66 Social and healthcare policy, vii, 12, 249–259 Social and healthcare reform, 12, 41, 250, 252–255, 258, 299, 302, 306 Social capital, 6, 297, 306 Social welfare, 11, 67, 99, 143–146, 150–155, 236, 238, 249, 250, 253, 254, 266, 281 Social welfare policy, 281 Socioeconomic injustices, 235, 237, 242, 243

 INDEX 

The Speaker, 42 State agencies, 57, 65–66, 218 Steering mechanisms, 8, 11, 96, 220, 298 Strategic plans, 120 Strategic state, 13, 274, 296 Strategic steering, 48, 49, 270 Strategy, 5–7, 13, 16–18, 24, 78, 81, 98, 103, 111, 114, 117, 135, 136, 182, 187, 190, 199, 201, 206–208, 210, 220, 223, 225, 234, 251, 267–274, 280, 283, 284 Structural reforms, 9, 95, 96, 301 Sub-optimisation, 81 Supreme Administrative Court, 49, 169 Supreme Court, 49 Sustainability, vii, 11, 13, 104, 105, 117, 120, 127–138, 179–181, 279, 281–283, 286–288, 305, 306 Sweden, viii, 3, 19, 23–25, 27, 38, 63, 66, 104, 206, 207, 231, 243, 297, 303 T Top-down, 21, 24, 26, 58, 191, 192, 253, 282 Total Defence, 267, 268

315

Tramway project, 84–87 Transformative innovation policy, 201–202 Transformative remedies, 235, 237, 240–244 Transparency, 19, 22, 25–29, 52, 87, 111, 116, 166, 179, 181, 216, 272, 298, 300, 303, 304 U Unitary state, 70 Universities, 43, 59, 69, 73, 145, 199, 200, 208, 210, 215–226, 302 Urban development, 13, 78, 83, 88, 129, 180, 281, 283, 284, 287 Urban population, 83 Urban sprawl, 284 W Welfare society, 8, 94, 104, 253 Welfare states, 3, 8, 18, 24, 69, 80, 95, 160, 216, 217, 221, 231, 242, 252, 279–282, 284–286, 288, 298, 305, 306 Wellbeing services counties (WSC), 58, 65, 69, 70, 72, 73, 97, 99–101, 103–105, 129, 153, 154, 156, 250, 252–255, 259 Wicked problems, 251