Finland

Despite growing sustainability concerns, Finland’s economic policies fall into the top ranks (rank 5) in international comparison. Its score in this area has declined by 0.5 points relative to 2014.

The COVID-19 pandemic triggered a sharp drop in an already weakening economy. A steep rebound in late 2020 tailed off into modest growth through 2021. The government provided support to enterprises, restructured employment regulations and expanded unemployment benefits. Previous employment rate and budget consolidation goals were pushed back.

Unemployment rates jumped above 10% several times during the pandemic, but have otherwise oscillated between 6% and 8%, relatively low levels in recent historical comparison. Previously, active labor market and other policies aimed at increasing employment rates have not had the desired effect.

Coronavirus-era deficit spending boosted government debt from abut 59% of GDP to 69%. Deficits are falling, but a structural imbalance remains. Demographic change is placing increasing pressure on social security and welfare system budgets. R&D intensity, which once topped the EU, has declined over recent years.

With a generally strong safety net, Finland falls into the top group internationally (rank 5) in the area of social policies. Its score in this area has declined by 0.3 points relative to 2014.

The education system is of high quality, though the country’s outstanding PISA scores are slipping due to gender and regional disparities in student performance. Education spending is very high in cross-OECD context. Overall, poverty levels are low, and levels of well-being high. However, pockets of relative poverty persist despite generally very efficient redistributive policies.

Primary healthcare is typically provided on an occupational basis, leaving unemployed people and the self-employed to the public system, which offers fewer services. Responsibility for financing healthcare is being transferred from the municipal to the regional level in 2023. Child-poverty rates are low, and women’s employment rates high, but women still disproportionately bear childcare duties.

The pension system generally prevents poverty, with recent forms successfully enhancing the system’s sustainability. Immigrants have difficulty integrating in the labor market, even in the second generation. Applying for a residence permit is still a complicated process. Development aid is viewed as a key aspect of security and foreign policy.

With a strong record of cooperation on conservation issues, Finland falls into the top ranks internationally (rank 4) with respect to environmental policies. Its score on this measure has improved by 0.5 points since 2014.

Renewable energy sources account for about 40% of end consumption. The current goal is to reach above 50% by 2030. The country has an ambitious plan of reaching carbon neutrality by 2035. The country has focused strongly on water pollution, curbing industrial emissions and cleaning polluted waterways, but farm-produced waterway pollution remains a challenge.

Forest protection has also been a top priority. Efforts to halt a decline in biodiversity have been insufficient, although the government has created networks of protected areas. The country receives high overall rankings on the Environmental Performance Index.

The country has engaged in and honors a large number of international environmental agreements, but is rarely a forerunner in creating these regimes. It chaired the Arctic Council from 2017 to 2019, and is promoting implementation of the Paris Agreement and the UN’s Sustainable Development Goals.

With an outstanding mix of procedures and protections, Finland falls into the top group internationally (rank 2) with regard to quality of democracy. Its score on this measure is unchanged relative to its 2014 level.

Campaign-finance laws are strict, featuring transparency requirements and independent monitoring. A widely used popular-initiative system allows the public to submit issues to parliament on a non-binding basis. The media is strongly independent, but becoming increasingly concentrated. Media organizations performed well during the pandemic, producing credible news and debunking misinformation.

Civil rights are generally strongly protected. The government issued some recommendations during the pandemic that in practice restricted rights. Anti-discrimination rules are broad, although the small Roma community is marginalized. The Finns Party has encouraged discrimination against ethnic minorities.

Legal certainty is a strong part of the political culture, although parliamentary scrutiny of government decisions was diminished during the pandemic. The government issued comprehensive, easy-to-understand information related to COVID-19. Courts are independent, though no constitutional court exists. Corruption is rare.

With its broadly evidence-based system, Finland falls into the top ranks internationally (rank 3) with regard to executive capacity. Its score on this measure has declined by 0.4 points relative to 2014.

Strategic planning is deeply integrated into policymaking. Evidence-based planning is enhanced using trial projects. The Prime Minister’s Office (PMO) has broad policy-review capabilities, and works closely with ministries. Its resources have been substantially increased in recent years. Decision-making is collective and consensual, with interministerial coordination strong at all levels.

RIA use is systematic, although policymaking during the pandemic overstretched ministries’ ability to conduct impact assessments. Interest organizations were less involved in the formation of COVID-19 policy than in many other countries. Vested interests do not generally receive preferential treatment in regulatory enforcement proceedings.

The government used emergency powers to concentrate all communication activities under the Prime Minister’s Office during the pandemic. COVID-19 measures were generally successful, with sufficient funding and trained staff available for implementation. Government efforts to pass more rigorous restrictions failed after criticism from the parliament’s Constitutional Law Committee.

With strong oversight mechanisms in place, Finland falls into the top ranks internationally (rank 2) with regard to executive accountability. Its score in this area has improved by 0.1 point relative to 2014.

Parliamentarians have access to considerable resources, and very strong formal executive-oversight powers. The audit and ombuds offices are well-funded and independent, though a scandal led the parliament to fire the audit office’s general director in 2021. Two separate data-protection authorities oversee personal-data and privacy issues.

Evidence indicates strongly varying degrees and types of policy knowledge in different demographic cohorts. The media produced highly credible information during the pandemic, but took an uncritical approach to government statements. Although declining, daily newspaper circulation figures remain reasonably high.

Political parties are responsive to members’ input, but leaders decide most issues. The large economic-interest associations have long been integrated into the policymaking process, though unions and work councils played a comparatively minor role in developing COVID-19 policies. Other interest groups often present influential if narrow proposals and analyses.