A Note on the Finnish Municipality Reform Project

One of my classes in Brussels dealt with looking into Immanuel Wallerstein’s world-systems approach. The message was to encourage into analyzing Europe and the world without our nation-state glasses on but instead holistically as one giant system. This path ultimately leads to discussions on issues that swirl around the word “globalization”. At the end of the class were asked to submit an essay on a topic of our liking related to the themes of the course. I wrote mine on the ongoing municipal reform process in Finland.

Looking at the reform project through a world-systems approach, even if only at a glance, inspired me to see a whole new dimension to the discussion around it. I might as well share my thoughts here too since I haven’t managed to write anything since starting my studies.

For those of you who are unfamiliar with the Finnish municipal reform project, you can find some more information on the website of the Ministry of Finance. But in essence, it is a project that was started after Finland’s 2011 parliamentary elections when the afterwards-formed coalition government outlined the execution of a significant nation-wide municipal reform as one of their policy priorities. The last details were just very recently apparently sorted out.

The government argues that the reform addresses several threats to society which have to be confronted sooner or later: aging of the population, increasing rural to urban migration, and urban sprawl. These are all connected to a sustainability gap in public finances, which in turn poses a threat for the provision of welfare services. Furthermore, the introduction of successful economic development schemes in especially urban areas is seen as too difficult because they are fragmented into multiple municipalities with different interests. All these threats are bound to affect the municipalities in different degrees.

The message of the project ultimately is that the municipality as a spatial governance unit as we now know it is under crisis. Geographically, the reform is about restructuring the scale of local governance to larger units. It implies that the new municipalities should on one hand territorially reflect the extent of de facto urban areas (one city, one municipality), and on the other hand annex declining rural municipalities with each other to create more viable units. This scheme could shred down the number of municipalities from 336 to around 70 in its most extreme enforcement model.

The project has naturally roused a massive debate. It is mainly happening in and between the parliament and the local councils. Also citizens have to some degree commented on the reform, mainly by expressing worries about the possible loss of local services. Overall, the main issues under discussion have interestingly been the procedural and legal aspects of the reform. Far less emphasis has been invested in discussing the spatial dimension of the reform.

In this regard, there are two general lines of discussion. The publicly most visible, and the fiercest, dispute is taking place in city regions such as Helsinki, Tampere and Turku. In all of them the battle lines are the same: the core city is pro-reform and the surrounding suburban municipalities are all against it. The latter argue that they already are economically viable whereas the core cities grief that they are losing jobs and taxpayers to the outskirts while the socially more unfortunate population gathers in the cores.

The other – and more relevant when discussing the nature of the reform – debate concerns the ambiguity or lack of sufficient articulation of the role of the urban in the project. Indeed, already the general goals of the reform encompass a paradoxical message: some of them reflect the problems of rural communities while others mainly concern issues dealt with in city regions. This takes us to the source of the crisis.

The municipal system now in place is built on the pillars of uniformity of the Keynesian welfare state dating back to the mid-20th century. The apparent crisis of this municipal system entails that fundamental changes in society have since taken place. The spatial trait of the reactions from the municipal field suggests that cities are the places to pay attention to.

What very much seems to have happened in Finland is what has gradually happened to the global system. In Saskia Sassen’s words, a “re-scaling of what are the strategic territories that articulate the system”. According to Sassen and many other academics, the world system – our society – now operates through a landscape of networks on the basis of the advent of information technology. A state typically dubbed as the era of globalization. This social order is characterized by increased mobility, transnational interaction, and detachment of capital from nation-state containers.  A space of flows as Manuel Castells calls it.

Most notably, cities have become places where the flows of global operations manifest themselves territorially. They act as nodes in the network by providing the resources that allow enterprises and markets to have global operations. But additionally, they also function reciprocally as control centers of those flows.

The implications are that different activities, functions and people wanting to take part in the global economy trend to agglomerate in these cities. Consequently, cities and city regions become hierarchically regional and global core areas towards which activities gravitate at the cost of rural areas and smaller towns.

A very illustrative way of elaborating is an analysis by Philip McCann that I became familiar with at a lecture he gave at an EGEA congress back in 2009. He showed us that in terms of these globalization-related activities, the map of the world has become increasingly three-dimensional and more specifically “spiky”.

An example of how the world is getting increasingly spiky. In this case the mapping is on population density. Source: Time Magazine.

Naturally, this kind of spatial restructuring gives all of these spiky places – cities – a very important position in whichever nation-state they are located in. Therefore it is very much arguable that cities are to be recognized as key actors in the political sphere.

In my small world-systems analysis of Finland with our municipal reform in mind, it was clear that major changes in local governance structures have historically always followed periods of economic expansion. These have been triggered by shifts in societal structures caused by introduction of economic reforms, new production models and/or technical innovation. These changes are of course not only to be seen as shifts that happened solely in Finland, but as belonging to the readjustment processes of the global system.

After the economic crisis of the early 1990’s, we saw many economic reforms, entered the European Union, invested in new kinds of areas of expertise (anyone still remember Nokia?) and so forth.

All of this led to economic recovery and as the case always is, in accelerating urbanization. But this time all of this happened only in around 10 cities and resulting in a depopulation process in just about everywhere else. More specifically, most new jobs have been created in 4 or 5 city regions since the recession. We arguably now live in an era that can be characterized by “the rise of cities”. It is for example worth noting that the OECD published their first ever Finnish edition in their series of “metropolitan review” reports focusing on Helsinki in 2003. It also is no coincidence that the three biggest urban areas, Helsinki, Tampere and Turku have their own lobby office in Brussels.

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Source for maps and graphs (presentation only in Finnish unfortunately).

In this context, the current reform can definitely be seen as “due”, because so far nothing has essentially been done to adjust the Finnish municipal network to this changing societal landscape. But the relevant question is whether the substance of the suggested reform does indeed match that landscape.

Here I argue that it does not. The most fundamental shortcoming is the inadequate emphasis placed on cities. The reform as such seems to be too much of a compromise between the municipality model of the Keynesian welfare state and of one based on the recognition of the importance of city regions in today’s world. It at the moment tries to “kill two birds with one stone”, by imposing just one framework for local governance to suit two very different spatial realities.

We can clearly see that people, jobs and resources are concentrating in the bigger cities and especially in Helsinki. Following this process, they will increasingly need to deal with not only acting as the engines of the country’s well-being but also with urban problems associated with cities actively intertwined into the global network of cities.

It is in fact a very recent phenomenon in modern Finland that the city has gained ground in political development schemes. Before the Second World War, cities have enjoyed a higher hierarchical rank than rural municipalities. These were also times when the country was more openly linked to other parts of Europe. During the Cold War Finland was relatively much more a “closed system” due to its position right next to the Soviet Union and consequent policy of neutrality. Now Finland has deconstructed many of these protectionist regulation mechanisms and is again more open to the world system.

Finland’s entry to the European Union in 1995 can be seen as one important catalyst in an emerging shift towards city-emphasizing policies. To streamline its regional policies to better sync with those of the EU, Finland introduced a Centre of Expertise Programme in 1994, which also meant careful recognition of a changing societal landscape. But it was not until 2007 that cities officially got a place in the forefront of national policies. The concept of a separate metropolitan policy for the Greater Helsinki Region was then introduced in the government strategy. The implementation and definition of these urban policies is still however an ongoing process.

And it is now at this junction in time when the local government structures, municipalities, are being redefined.

In my opinion, it doesn’t make any sense to discuss urban policies and the municipality reform in separate forums. The intrinsic paradox of the reform proposal is that it imposes a one-size-fits-all model to a reality that does not operate on a single level. If we really want to solve urban problems – and thus societal problems – we need to lay out our national structures in a way that recognizes the city as the defining factor of our well-being. As long as we keep on discussing in a sense that Helsinki and a rural village somewhere in Finland are to be considered as something equal, we are not going anywhere.

We cannot escape the fact that globalization is urbanization.


One response to “A Note on the Finnish Municipality Reform Project”

  1. Tuukka Avatar

    Good arguments Timo, even a strong NIMBY and conservationist about municipal merges (these standpoints only apply to the status of my hometown, Kauniainen 😉 ) have to agree on most of your views. Sadly though, the political climate somehow does not seem to go towards more open and more common sense reasoning, but ignorance to facts and global trends and petty localism seem to have a strong position (“True” Finns etc). I hope common sense will prevail.

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