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

Abstract

AbstractThe 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.