Political Institutions and the Finnish Market Regime
Led by Professor Niilo Kauppi, this project will study the political preconditions and consequences of the Finnish market regime. Using comparative case studies, we argue, first, that several changes in the central political institutions were needed to implement reforms and, second, that these changes reorganised the space of governing and political power.
The individual studies show that market mechanisms and the generalized emphasis on efficiency, strategy and leadership as principles of government paradoxically entail a more thoroughgoing politicization of government than the bureaucratic rationality they were designed to replace. Here we stand in contrast to the application oriented literature that often embraces the reforms, but also to those who criticize the reforms for substituting market forces for political judgment.
Four major developments stand out: 1) Following membership in the European Union, Finnish authorities started paying more attention to free competition as a framework for governing. 2) In state budgeting, old incrementalism was replaced by budget frames and budgeting by results, restricting the attention of elected politicians to macro level public economy. 3) Constitutional parliamentary minority rules were replaced by simple majority, and the powers of the president were drastically trimmed down, allowing government to rule without interference from the opposition and the president. 4) Allocations to municipalities for specified expenses were replaced by grants which the municipalities are free to allocate for different expenses.
Theoretically we are not merely interested in the institutions’ capacities for action. We are also interested in studying the reasons and justifications of the reforms and the ideas, concepts and “rationalities” informing them. Power cannot be understood simply in terms of actions it allows or forbids, encourages or discourages. Understanding power requires that we identify its “logic” and legitimacy, as well as the logic and legitimacy of resistance to it. Power and resistance feed on each other. This dual process, we hypothesize, has led to a situation in which market models, instead of being simply technical means used to cloaking political ends in apparent neutrality, have become “a matrix” against which the legitimacy of political power is articulated by ruling elites.
In addition to their own case specific questions, the individual studies will focus on the following research problems:
1) In what ways did changes in political institutions contribute to furthering the market-inspired methods of running the public sector?
2) What concepts and ideas were used in justifying institutional changes? Was this language based on economic rationality or a completely different language?
3) Did or did not the institutional changes involve changes in the ways government and political power were conceptualized as means to control administration and citizens?
4) Can we see changes in the relative positions and tactics of political actors?
Professor Niilo Kauppi will explore the political interests and strategies that led to constitutional reforms in Finland and France in 2000. The fact that these reforms took place at the same time in these two countries is not an accident. Both countries have traditionally been considered as forming semi-presidential political systems. European integration and globalization significantly shifted political action from the nation state to a constellation of shared sovereignty between member states and various supranational institutions, mostly the European Union. At the same time, the pressures to reform the principles of political and economic governing increased. In the minds of some decision-makers, these transformations called for more fundamental political reform. In Finland, this political reform paved the way for the setting up of the Finnish market regime: political decision-making was streamlined and the relative power of government reinforced.
M.Soc.Sc. (Ph.D. 2008) Markku Koivusalo analyses the rationalities of executive reason and the strategic and tactical objectives of the programmes of the State Council in his post-doctoral study. Koivusalo will examine the following questions: 1) What procedures, rationalities and technologies does the executive power employ in exercising and justifying its policies? 2) Has the change in power structure involved a change in the subjects, objects, aims and technologies of governing, and how? The hypothesis of the study is that a major change has occurred in governmental strategies which guide action as well as in how the exercise of power is rationalized. These changes have transformed the strategic fields of executive reason. They have also displaced the very meaning that is related to the notions of welfare, citizenship, education and labour.
M.Soc.Sc. (Ph.D. 2008) Timo Moilanen’s aim is to explore how the removal of the stipulated minority rules has influenced the parliament’s position and work methods. The minority rules were fully relinquished in 1992 and now it takes only a simple majority for the legislative proposition to be accepted. The true significance of the stipulated minority rules lay in the fact that it de facto forced the government to take into account the will of the opposition. The reform has given majority governments the power to push their motion through the parliament, heedless of the opposition’s political will and thus weakening opposition’s position. This change is reflected in the work of the parliament's Preparatory Committees in that the need to find compromises is now radically different than prior to 1992. It has rendered a need for political consultations between the government and the opposition parties redundant and the debates in committees are presently more like pushovers.
Dr. Juri Mykkänen will study the relationships between economic rationality and the state budget. Following OECD models, politically binding expenditure ceilings were introduced in the early 1990s. It is argued that budget frames effectively reduced the power of elected politicians to influence state spending and changed elite strategies around budget decisions. Government ministers and other top politicians were left with making decisions on a more macroscopic level than before. Political power has not only become more abstract from the point of view of citizens but the reform also allowed a more effective use of market models as steering mechanisms. Besides the fundamental question concerning the role of the budget in implementing market models, the following questions will be answered: 1) Who has benefited from the change in terms of power resources and leverage? 2) What are the financial consequences of frame budgeting? 3) What kinds of techniques and expertise were introduced and how did these new elements affected the parties concerned? 4) In what ways did the budget reform alter the role of representative politics in the budgetary process?
M.Soc.Sc. (Ph.D. 2008) Michael Kull's project will analyse decentralisation and autonomy of local government in Finland compared with Estonia and Germany. Kull will answer the following questions. 1) What is the impact of the EU membership on the content and degree of local self-government in these three EU member states? This concerns institutional and legal frameworks and the impact of the central state on local self-government, for instance through the imbalance of increasing tasks and decreasing financial resources. 2) To what extent has European integration empowered local communities by new forms of networks or the partnership principle of EU Regional Policy. European integration also restricts local level autonomy. For instance, the EU’s free market policies, such as the call for tenders or the directive on services in the internal market, have impacts on the provision of public utilities. 3) What forms of sub-national cooperation (formal and informal) have become available to local government?