Embracing the Market?

doi:10.1017/9781009614290.009

7 - Embracing the Market?

Social Democracy and Financial Liberalisation in Finland

from Part II - Social Democratic Policy-Making

Published online by Cambridge University Press: 24 February 2026

Edited by

Jonas Hinnfors and

Magnus Feldmann: Affiliation:
University of Bristol
Jonas Hinnfors: Affiliation:
Göteborgs Universitet, Sweden
Mark Wickham-Jones: Affiliation:
University of Bristol

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Summary

This chapter examines how the Finnish Social Democratic Party (SDP) came to support the process of financial liberalization, while serving in a coalition government between 1987 and 1991. Financial liberalization is widely perceived as emblematic of a neoliberal turn in reformist politics. The chapter examines how a practical social democracy approach can shed light on the interaction between ideology, practical challenges, and coalitional imperatives that shaped policy-making and led to the SDP’s endorsement of financial liberalisation in Finland. It analyses these reforms in the context of the Finnish political economy and the development of social democratic economic policy. The chapter shows that financial liberalisation was debated extensively within the party and the government. The policy reforms were justified as a solution to key practical challenges, but also as a way for the SDP to promote traditional social democratic objectives. The chapter considers the implications of this case for understanding the embrace of markets by social democratic parties.

Keywords

practical social democracy Finland economic policy financial liberalisation coalition government

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Type: Chapter
Information: Practical Social Democracy , pp. 147 - 170
DOI: https://doi.org/10.1017/9781009614290.009 [Opens in a new window]
Publisher: Cambridge University Press
Print publication year: 2026

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