Public administration in a nutshell – How public administration works in Finland

An interview with Ambassador Juha Virtanen, Embassy of Finland in Kyiv
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How does public administration work in Finland?

I am pleased to say that according to the oven-fresh Legatum Prosperity Index 2016, targeting 149 countries, Finland´s governance was ranked number one. Three indicators were used: how effective governance is, level of democracy and political participation, as well as implementation of rule of law. Also functioning of the economy, education, health, security, social capital and the environment were assessed in light of functioning of governance.

Short historical background:

By the early 20th century, Finland was still one of the poorest and most agrarian countries in Europe but in the 21st century one of the wealthiest and most modern nations. Finland has reinvented itself in just one short century with the help of a strong commitment to equality, careful and thorough social planning, and a common belief in the empowerment of education and research. Another contributor has been a well-functioning political system where a practical and problem- solving mindset and consensus-based political decision making reign, even in times of crisis.

Hierarchies in Finland are genuinely low, and at workplaces people generally address each other on a first-name basis, regardless of their position. The key viewpoint is keenness for cooperation rather than administrative structures per se. One of the reasons behind equality in Finland is that the country never had feudal structures and Finns have always interacted directly with one another, which have also contributed to Finland´s history with very little corruption. Finland was also the first country in the world to grant women full political rights in 1906, making them active forces and crucial shapers of the nation.

Finland established its own administration in 1809 in connection with the transfer from Swedish rule to the Russian Empire as an autonomous Grand Duchy. When Finland gained independence in 1917, the country already had a hundred years’ experience of running its own administration and long-term links with Nordic administrative culture, including the notion of legalism.

From the 1960s, public administration expanded quickly, largely due to the obligation to manage the increasing number of administrative duties in a welfare state. Until the 1980s, Finland’s public administration followed the model in which ministries were responsible for managing public duties together with so-called central administrative boards. In regional government, public duties were the responsibility of state provincial offices and regional authorities in different sectors. In the early 1990s, the public administration structures were reformed, partly due to the severe economic recession. The system of central administrative boards was abandoned and the number of state provincial offices reduced, while many agencies were replaced with unincorporated state enterprises and state-owned enterprises. These reforms expanded the operational and economic independence of municipalities, which has made them seek economic efficiency.

New regional government began operating in early 2010, with the aim of clarifying the roles, duties, steering and regional divisions of regional government authorities. Apart from two universities which are run by foundations and subject to foundation law, universities in Finland have been institutions under public law as of 1 January 2010.

Already in 1766, the Kingdom of Sweden of which Finland was part back then, became the first nation in the world to implement an act on the openness of administration. In line with this strong tradition, administrative documents in Finland are accessible to everyone free of charge. The authorities must actively provide information about developments in their field of administration. The media operates freely in Finland, with no censorship and enjoying strong confidentiality of sources which can only be broken in legal proceedings concerning serious crimes.

General structure:

Finland is a unitary state organised on a decentralised basis. Finland has central, regional and local levels of governance.  A cross-cutting trait in the Finnish model is that administrative structures and functions are put into law more often than in other Nordic countries. This does not imply that changes do not happen, on the contrary. Administrative policies have been in important position in the Finnish Government programmes since 1987.

The State Administration’s most important responsibilities are maintaining general peace and security in the Finnish society, and organizing the Central Administration. In Finland, as in the other Nordic countries, the main duty of public administration is to take care of the major part of welfare services for citizens, such as education, healthcare and social affairs. In light of global comparisons, Finland has done something right being in the top in recent rankings on stability, human capital and press freedom.

Finland’s administrative structure consists of the highest state bodies (the Parliament, the President, the Government), independent courts of law, State central administration and other public administration. The State administration consists of State central administration, regional administration and State local administration. Other public administration encompasses local self-government (municipalities), ecclesiastical self-government and indirect public administration. Indirect public administration comprises independent bodies governed by public law (such as the Social Insurance Institution of Finland, the Bank of Finland, the Finnish Institute of Occupational Health, and universities). Agencies, NGOs, trust funds,  corporations, institutions, and foundations which perform public duties by virtue of delegated legislative powers, and private individuals exercising public power, such as supervisors in fishing and animal protection, also fall within the scope of indirect public administration. Transferring public powers and the management of public tasks to indirect State administration aims at increasing the independence and flexibility of the operations of organisations on this administrative level.

Finnish municipalities have self-government. They are by law entitled to decide on matters under their jurisdiction. In fact, the municipalities and local government are the most extensive and important system of self-government in Finland. The history of local self-government in Finland goes back for more than one thousand years and it is strengthened and protected by the country’s constitution. The State does not have any unlimited rights to interfere in the activities of self-governing entities, for example, by introducing special legislation.

Municipalities are responsible for providing their residents with statutory basic services. By enacting laws, the State has the right to participate in decision-making on the provision of basic municipal services. The most important of these are social welfare and health, education and culture, the environment, and technical infrastructure. Basic municipal services provide residents with fundamental security, a sound basis for everyday living, and a social safety net. Basic services are mainly financed through municipal taxes, central government transfers to local government, and fees charged for services. In general, it has been discovered that existence of too many municipalities entail thin resources of small municipalities to take care of basic public services.  Thus, there has been a trend towards joint municipal authorities and unifying municipalities. All the major stakeholders have been involved and heard in such reforms and working groups.

The Åland Islands are autonomous as laid down in the Act on the Autonomy of Åland. The autonomy of the Åland Islands is established on the basis of the autonomy granted to it by international treaties. In the framework of its autonomy, the Åland Islands has its own political and administrative bodies responsible for decision-making.
The Parliament of Åland (lagtinget) exercises legislative power within the framework permitted by its autonomous position. Otherwise the laws enacted by Finland’s Parliament apply. The Government of Åland (landskapsregeringen) is responsible for regional administration.

How many civil servants are employed in the service?

The number of state employees has fallen from 215 000 in 1988 to 74 000 in 2015.

Do they work mainly at the central or at the local level institutions?
The municipalities take care of 2/3 of public services. Therefore, also the amount of civil servants in municipalities altogether is higher than in the state administration. There are 74 000 civil servants in the state administration and 422 000 in the municipalities (year 2015).

Is public service considered prestigious occupation?

I would say that earlier public service probably has been considered prestigious and, going further back in time, even a privileged occupation. Nowadays it is rather a valued occupation. Admission to public posts is open to everyone with relevant skills and education, and the selection process is fair.

What kind of challenges do you see in your country’s public administration?

Currently, one of biggest ever administrative and operational reforms in Finland is going on, encompassing health, social services and regional government reforms and leading to ever stronger regional government. The objectives of the reform are: 1. Reform of social welfare and health care, 2. Cutting local government costs, 3. Municipality of the future, 4. Regional administration reform and 5. Central administration reform.

The purpose of the restructuring process is to create a sufficiently solid structural and financial basis for services that municipalities are responsible for, in order to secure high-quality welfare services in future equally in all parts of Finland. The process will have an impact on organizing local-government services, their funding and the division of labour between central and local government.

On the central administration reform the focus is on division of tasks between autonomous areas, the State central and regional administrations and municipalities. The aim is to have a clear structure and clear leadership mechanisms and a central government with capability to change and manage risks, with client-driven services that are primarily electronic.

The reform is aimed at enhancing the growth potential of the economy and reducing the sustainability gap. In Finland, we have an ageing population and thus a need to address the severe financing gap of public services and benefits.  The reform seeks to boost the employment rate, economic growth and productivity of public service provision. One of the important goals of the reform is that sectoral “borders” will not hinder management of the entire system.

In society, trust is very important capital. According to the oven-fresh citizen survey the Finns regard the State administration as trustworthy, independent, professional and responsible.  Strong perception of the high Finnish official ethics is certainly an affirmative message and a competitive advantage for Finland. But even in Finland, further work to develop things continues, as shown above, for instance in making administration easier understandable. Ethical questions also stay on the agenda in all administrative development projects in Finland, though results in this survey were good.

What kind of similarities and differences do you see between your country public administration and the Ukrainian one?

Ukraine and its administrative branches are reforming but reform is a constant friend of the Finnish administration, as well. The world is never “ready” and you can always improve things. I mentioned that in Finland there is a trend towards joint municipal authorities and unifying municipalities. This kind of amalgamations aiming at bring mutual benefits are also taking place in Ukraine now.

I mentioned that in Finland there is a trend towards joint municipal authorities and unifying municipalities. This kind of amalgamations aiming at bring mutual benefits are also taking place in Ukraine now.

One other thing where Ukrainian and Finnish situation have similarities is the fact that in both countries there are large linguistic minorities. However, the Finnish law does not define which are minority languages. In Finland we have two official languages, Finnish and Swedish. In addition, there are other languages, languages of indigenous peoples and autochthonous languages, whose linguistic rights are put in various laws. From 1992 onwards Sami, spoken by Lapps, has had an official status in the home areas of the Sami. This means that the Sami have the right to get service in their native language in official institutions and hospitals. The Finnish solution of offering a strong status to all such languages is another reflection of the ethos of equality in the country.

How experience of your country in managing public administration and public service can be used in Ukraine?

In Finland, there´s been focus on pragmatism and functionality – making sure that things work and keep on working. Good governance and service attitude towards the people are the internalized ways of conduct in the staff at public administration. We have a lot of trees and water. People, not so much. That’s why we believe in taking good care of each other – and know the value of doing things together. We say what we do and do what we say. Civil servants are honest and loyal and Finns can trust that their issues are handled fairly in administration and courts of law.

Still, even in Finland we cherish emphasis on implementation as an important guideline to ourselves. It is easier to make plans and even decisions than make changes really happen, get them really through. This is why implementation and continuity are very important, and conscious attention needs to be kept on them.

Public servants need a decent pay for their work and they need to be trained in their tasks and this is also a path to their own appreciation of their work and the dignified attitude towards it. For example, one important reason behind the excelling Finnish school system are the highly-educated teachers (on all stages of education from kindergarten to university) who consider their work as educators extremely valuable and important despite of salaries that may not be considered very high. Despite that, year after year there is huge competition on pedagogical study places, and high appreciation of teachers in the wide public.

Some customer friendly developments in Finland, in particular in remote areas, have been establishments of Citizen Service and Service Points, one-stop-shops for receiving most common public sector services. Nevertheless, we still want to develop customer-friendliness further in Finland.

What would you recommend to young Ukrainians who would like to work in the public service?

Before anyone decides to aim to work in public service it is good first to turn the words around and ask oneself does one want to serve the public, treat is as customer. And to think a bit more widely, does one want to serve the public good. That´s what it is about and the answer to this question helps to end up in a career that suits oneself. If the answer is yes, and the person is willing to assume that responsibility, then I would say: take the opportunity and participate in the competitions for posts. I am pleased that in Ukraine there are now public, open competitions to public posts and the way Prime Minister Groysman recently described the new posts is promising, including its notion that it is the individual´s input that counts: “they (posts) are not for those having backstair influence as it used to be, but those people who by their knowledge, abilities, aspirations can come and change the situation in the country. These are absolutely public jobs for Ukrainian citizens”.