Seize the Moment: Financial Crisis and the Making of the Finnish Competition State

In this paper we examine how Finnish Governments dismantled the Nordic welfare state paradigm from the 1990s onwards and adopted Schumpeterian ideas of a competitive workfare state. In the early 1990s, Finland went through a financial crisis that was the most severe in OECD countries since the Second World War and came to play a major role in the paradigm change. In the crisis, the Ministry of Finance gained a central role as a consensus-building power broker, and formulated a political strategy of national competitiveness, which was adopted as a rationale of power for consensual governments and has been maintained since. We suggest that financial crises can become formative moments in which new ideas are adopted and policies are reformulated. They can also become moments which provide opportunity to overcome citizen opinion. In Finland, the wide popular and party support for the Nordic welfare model was not reflected in the new paradigm.