Seize the Moment: Financial Crisis and the Making of the Finnish Competition State

Abstract

In this paper we examine how Finnish Governments dismantled the Nordic welfare state paradigm from the 1990s onwards and adopted Schumpeterian ideas of a competitive workfare state. In the early 1990s, Finland went through a financial crisis that was the most severe in OECD countries since the Second World War and came to play a major role in the paradigm change. In the crisis, the Ministry of Finance gained a central role as a consensus-building power broker, and formulated a political strategy of national competitiveness, which was adopted as a rationale of power for consensual governments and has been maintained since. We suggest that financial crises can become formative moments in which new ideas are adopted and policies are reformulated. They can also become moments which provide opportunity to overcome citizen opinion. In Finland, the wide popular and party support for the Nordic welfare model was not reflected in the new paradigm.

Keywords:

• policy paradigm
• ideas
• welfare state
• Nordic
• Finland

Acknowledgements

This article is based on research funded by The Academy of Finland.

Notes on contributors

Anu Kantola is a senior lecturer at the Department of Social Research, University of Helsinki. She has studied the political ideas of the competition state and is currently engaged in research on a potential power shift from political parties to central government. Her ongoing research interests also include public styles of power and the public reconciliation of collective traumas.

Johannes Kananen works as a post-doctoral researcher at the Swedish School of Social Science, University of Helsinki. He has previously worked on topics such as historical and contemporary transformations of Nordic welfare states, labour market policies, the Nordic reform paths in the area of social security legislation and the relationship between elite and popular ideas in politics. He is currently engaged in research on Nordic openness and in research on a potential power shift from political parties to central government in Finland and in other Nordic countries.