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New Public Management as a Response to the Crisis of the 1970s: The Case of Finland, 1970–1990

Published online by Cambridge University Press:  06 July 2015

VILLE YLIASKA
VILLE YLIASKA*
Affiliation:
Unioninkatu 38 A, PL 59, 0001University of Helsinki, Finland; ville.yliaska@helsinki.fi
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Abstract

The article gives an overview of Finland's responses to the economic crisis of the 1970s. In particular, it focuses on public sector reforms that fall under the label New Public Management (NPM). These reforms are interpreted in the context of an overproduction crisis. The article contends that in the 1980s and 1990s power in Finland was centralised through the doctrines of NPM in order to reallocate public resources from welfare services to industrial policy and thus confront post-industrialism. In doing so, it provides a new explanation as to why NPM reforms were carried out. The main justification of NPM-reforms – ‘decentralisation’ – is analysed from different angles. In the late 1960s decentralisation referred to the autonomy of the municipalities. In the 1980s it referred to ‘efficient leadership’, which meant in practice more power over resources for the state. The idea was to reallocate public resources from welfare services to research and development and venture capital. In effect, NPM was part of a new kind of state interventionism not part of a neoliberal project to destroy or hollow out the state.

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Articles
Information
Contemporary European History , Volume 24 , Issue 3 , August 2015 , pp. 435 - 459
Copyright
Copyright © Cambridge University Press 2015 

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40 All OECD materials used in this piece are located in the Finnish archives. I have not been able to link the OECD discussions about industrial policy more clearly to the Finnish ones; archival connection and the similarity of the themes discussed are the only connections at this point of my research. What is clear is that OECD material about the content of NPM reforms per se and the OECD material about the reforms in other OECD countries were actively used as role models and justifications in almost all Finnish NPM reforms. This applies to the reforms analysed in this article too: see, for example, Maailman paras julkinen sektori. Julkisen hallinnon kansainvälinen vertailuprojekti (Helsinki: Valtiovarainministeriö, 1993), 7–10, 20, 49–50, 59, 81, 131.

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43 The size of the public sector equals the proportion of public expenditures in relation to GDP.

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77 Inspiration for this close reading of the changing meanings of concepts comes from Koselleck.

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81 New central agencies were founded especially during the 1960s and 1970s and constituted the basic infrastructure of the welfare state. The power struggle between central agencies and the ministries had a long history.

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87 The Government of Finland, Katsaus hallinnon kehittämiseen, 12.

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89 Stenvall, Herrasmiestaidosta, 254–7.

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93 See, for example, ‘Pesola ja Halonen kaavailevat kunnille tehokkuusbonuksia’, Helsingin Sanomat, 2 Dec. 1989.

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100 Finnish Law 688/1992.

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106 By the original aim, I mean the autonomy of the municipalities. With regard to the criticism see Esko Aho, Hallinnon uudistamisesta 16 Feb. 1988, 4, H65:1, The Ministerial Committee of Improvement of Administration (HALKE), Archive of the Prime Minister's Office, Helsinki; Tiihonen, Paula, ‘Hajauttaminen hallitusmuodossa’, Hallinnon tutkimus, 1 (1987), 39Google Scholar.

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109 Social Democratic Party Council, meeting memo, 9 Mar. 1977, 14, ALM, Helsinki.

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