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

Published online by Cambridge University Press:  06 July 2015

VILLE YLIASKA
VILLE YLIASKA*
Affiliation:
Unioninkatu 38 A, PL 59, 0001University of Helsinki, Finland; ville.yliaska@helsinki.fi
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Abstract

The 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.

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Articles
Information
Contemporary European History , Volume 24 , Issue 3 , August 2015, pp. 435 - 459
Copyright
Copyright © Cambridge University Press 2015 

Introduction

In 1973 the world was shaken by the first oil crisis, later seen as one of the first signs of the economic crisis of the 1970s and the death of the post-war Keynesian era. Western countries responded with different techniques and economic policies to the consequent rising unemployment and inflation. In most cases these strategies included not only changes in economic policy but also some kind of reform in the administration and functions of the state. In some cases reforms were radical and completely changed the way administration and the public sector functioned.

In the 1990s these administrative reforms were labelled New Public Management (NPM). This concept was first introduced by Christopher Hood to refer to the market-oriented administrative doctrines that were adopted in a majority of the OECD countries during the 1980s and 1990s. Hood analysed British reforms in which public companies were privatised and market-type mechanisms were introduced to the public sector.Footnote 1 The main elements of NPM were competition, downsizing, new management systems borrowed from private companies (management by results, total quality management, etc.), decentralising, outsourcing and the separation of purchaser and provider of public services.Footnote 2 The broad idea was that managing a public organisation was not different from managing a private organisation and that competition would make public organisations more efficient and productive.Footnote 3

In contemporary social theory there are three ways of explaining why NPM reforms were carried out in different countries: 1) to preserve the status quo and to save the welfare state; 2) to decrease the size of the public sector; and 3) to modernise the state.Footnote 4 In the first explanation NPM is seen as a weapon in the battle against neoliberalism, which had attacked the redistributive social policies and social services provided by the public sector; in the second NPM is seen as a part of neoliberalism and in the third NPM is seen as a non-ideological reform movement driven by globalisation. This last, so-called modernisation, theory was introduced after it became obvious that the previous two political explanations were inadequate: reforms were made by both left-wing and right-wing governments. The critique of this theory, in turn, claims that it is too deterministic and ignores nuances because the reforms and their results differed greatly when different countries were compared.Footnote 5 Thus it has become popular to use path dependency theories from neo-institutionalism to explain these differences, for example, through local administrative traditions.Footnote 6 Regardless of this critique, all these explanations analyse NPM only as a reform of the administration per se – to make it either more efficient or smaller in size and, in doing so, revive the private sector. The aim of this article is to contribute a new element to these explanations by taking a closer look at the Finnish NPM reforms that were begun in the wake of the oil crises of the 1970s and finally carried through to completion in the 1980s and 1990s.

The oil crisis and growing unemployment at the end of the 1970s changed attitudes toward prevailing economic policy and towards the role of public sector in Western countries. This also happened in Finland. At its highest the unemployment rate in Finland was 7.3 per cent in 1978.Footnote 7 New attitudes were manifested at a conference held in 1977, in which political parties, trade unions, employers’ organisations and civil servants outlined different alternatives to reform the existing economic policies. The outcome of the conference was later labelled ‘Korpilampi's consensus’ after the name of the hotel where the meeting was held. Unlike Thatcherism, which sought confrontation with the labour movement and leftist policies, Finnish politics sought a united vision for economic policy. Consensus was also looked for in the Netherlands, for example. The most visible effect of consensus was that the Finnish Social Democratic Party stopped aspiring to nationalise the banking sector or the technology industry.Footnote 8

Within Finnish historiography, Finnish NPM reforms fit the modernisation theory discussed above. It is claimed that the main goal was to diminish the size of the public sector, to revive the private sector and to make the public sector more efficient. According to this interpretation the crisis of the 1970s marked the end of the growth of the welfare state. In addition, policy on the development of administration emphasised that the public sector was forced to adjust to the crisis of the welfare state and to the slowing economic growth in the 1980s. In this process the role models for public administration and for the organisations and processes of public services changed from being the other Nordic countries to the Anglo-Saxon countries.Footnote 9

The objective of this article is to place the Finnish NPM reforms in the wider context of the crisis of the 1970s and to give a new answer to the question of why these reforms were implemented and how they altered the functions and the nature of the (welfare) state. In this way, the article contributes to recent interpretations of the neoliberal movement. These new readings argue that the target of neoliberalism was to reform the tasks of the state rather than to weaken or hollow it out. For example, according to Mirowski and Van Horn, neoliberalism was never only an economic doctrine, and the premises of neoliberalism were not derived from classical liberalism. They argue instead that neoliberalism was based on the planned construction of markets not on a retreat to the natural state of the state. Neoliberals wanted to construct a society based on markets with the help of a strong state. According to Zuidhof, the market in neoliberalism was just another form of governance. Roberts argues that, since the 1980s, economic liberalisation has been accompanied by reforms designed to restrain democratic processes.Footnote 10 These arguments thus focus on the history of ideas and origins of the neoliberal movement. The Finnish reforms provide a case study in how the functions of the state were reformed in practice and how these reforms were justified locally. In this way the article also tries to solve the problem of why NPM reforms stayed at the top of the to-do list for decades even though there was no proof at any point that the new management systems or marketisations made public organisations more efficient.Footnote 11

I will first give an overview of the response to the economic crisis in Finland, focusing on the administrative reforms which were implemented in the context of the crisis and generally also justified by the crisis. Next, I will focus on the political battle over the meaning of the ‘decentralisation’, which was one of the main justifications for the NPM reforms. In this case I will apply methods from conceptual history, endeavouring to trace the ways different actors defined the concept.Footnote 12 I will also apply the idea of path dependency by analysing events as ‘crossroads’ that produce path dependencies.Footnote 13 The event in this case is the battle over the meaning of ‘decentralisation’, the result of which subsequently affected the content and outcomes of later reforms.

Several questions therefore need to be addressed. How was the crisis of the 1970s interpreted in Finland and what was the relation of the NPM reforms to the crisis? What did decentralisation mean in the context of NPM, and how did the reforms affect the power relations between the state and local government?Footnote 14 Was NPM merely a way to make public administration and public services more efficient? Was it simply a part of neoliberalism, or is it possible to interpret it as a part of a new kind of state intervention where public resources were reallocated to the so-called information society? In answering these questions, I will use as a principal source the archives of the Finnish Ministry of Finance, the lead agency responsible for sketching out and putting into practice these administrative reforms.

The crisis and European responses – the context

In the 1970s industrial countries were confronted with the biggest economic crisis since the 1930s. This was characterised by ‘stagflation’ – a mixture of high inflation, slow economic growth and high unemployment – and was unprecedented in the post-war Keynesian era.Footnote 15 Since then there have been several different interpretations and theories concerning the origins of the crisis. One of the most common theories explains the crisis as a result of the structural change from the industrial or ‘Fordist’ era to the post-industrial or ‘post-Fordist’ era.Footnote 16 Another sees the crisis as a sign of the failure of Keynesian policies and/or as a crisis of the welfare state (in all of its different forms).Footnote 17 A third theory interprets the crisis as one of overproduction which led to a fall in the rate of profit.Footnote 18 All of these interpretations were already in circulation in the 1970s.

Taking these interpretations as a starting point, countries responded with different policies. First and foremost, the crisis sparked a debate about the viability of the economic policies that had prevailed since the Second World War. In particular, this meant that the hitherto marginalised critique of the welfare state and state intervention was sufficiently reinvigorated to begin to attack the foundations on which the welfare state and Keynesian economic policies had been built.Footnote 19 In the colourful mythology of the New Right, most of the countries were ‘sick’, and hence the concept of ‘disease’ was widely spread: ‘English disease’, ‘Swedish disease’, ‘Euro-sclerosis’, etc.Footnote 20 This dissociation of the welfare state from pro-market policies was immediately labelled as neoliberalism and later also as the ‘Washington consensus’.Footnote 21 The most important concept in this pro-market campaign was ‘flexibility’, which was said to be needed in the era of ‘globalisation’ and for the structural changes of ‘post-industrialism’. Flexibility was believed to be the antidote to the rigidities of state intervention, or ‘statism’.Footnote 22 In addition to neoliberal policies in different forms, there were also countries that initially responded to the crisis by implementing Keynesian/leftist policies, like Mitterrand's France, but which later turned to pro-market approaches.Footnote 23 In countries such as Sweden, the welfare state survived without any major structural changes, though even there serious attacks were made on its foundations.Footnote 24

In Finland, too, there were discussions about the crisis of the welfare state and about the ways the public sector had restrained economic growth in the late 1970s. In particular, the conservative Coalition Party and the most important right-wing think tank the Finnish Business and Policy Forum (Elinkeinoelämän keskusliitto), which was funded by private industry, blamed the ever-growing public sector and welfare state for suffocating economic growth.Footnote 25 The old disputes between the right and the left were a good breeding ground for this criticism. In the 1950s and the 1960s the right had furiously opposed the welfare state by saying that Finland could not afford it, even though the ideas of the welfare state might be feasible. This opposition made the Finnish welfare state a late bloomer. Social polices made their breakthrough in the late 1950s and early 1960s and accelerated in the 1970s. But because the welfare state never became a consensus affair in Finland, criticism of it was easily resurrected.Footnote 26

In the existing historiography, the Finnish welfare state and the corporatist system dominated by banks and big business has been characterised as ‘quadripartite mistrust’, because political parties, trade unions and employers’ associations lacked a shared vision of the ‘public interest’.Footnote 27 In Finland the compromise between classes was defined negatively, as a necessity to save the common good.Footnote 28 In comparison, Swedish folkhemmet was harmonious, modern, technologically advanced and neutral.Footnote 29 Finnish class struggles were manifested in short-lived governments.Footnote 30 There was not a single government between 1945 and 1983 that survived its whole four-year term.Footnote 31 The Cold War also played a part in this because Urho Kekkonen, President between 1965 and 1982, did not want to nominate to government those parties that he saw as unfriendly towards the Soviet Union. Mainly this meant that the Coalition Party was in the opposition between 1966 and 1987. Conversely, Kekkonen was eager to nominate the Communists because he wanted to give them responsibility so that the party would not radicalise while in opposition. This tactic gradually took effect during the 1970s, and the popularity of the Communists diminished in the early 1980s.Footnote 32 Two parties, the Social Democratic (SDP) and Agrarian-Centre Party, basically dominated Finnish politics in the 1970s. The former had long been the slight underdog, but the 1970s marked the point when the SDP took the upper hand. Regardless of this, the Agrarian-Centre Party was able to retain its popularity. The party is still among ‘the big ones’ in Finnish politics. The popularity of the Agrarian-Centre Party is perhaps an anomaly compared to other European countries. One reason for this was that Finland industrialised relatively late and its structural development involved an almost direct transition from agriculture to the service economy. A second reason was that the party was able to reform its policies in the 1980s by reducing the emphasis put on agriculture and promoting urban and pro-market policies.Footnote 33

Although the SDP was the ‘regent’ party of the country in the late 1970s and 1980s, the party had to go through much soul searching in the wake of the economic crisis. Indeed, the economic crisis had many profound effects throughout Europe. One of the most discussed effects was the destabilisation of the left, which affected the Finnish SDP too.Footnote 34 In Europe the welfare state had been built partly on Keynesian principles, but, after the crisis, the Keynesian discourse of full employment and the idea that social policies were one of the backbones of economic growth because they provided an educated and healthy work force and purchasing power in a form of a healthy middle class lost ground. Inflation – not unemployment – was the main concern of the new economic regime, and social policies were again seen as a burden on the private sector.Footnote 35 Within this policy framework, the left could only resort to two proactive approaches: publicly funded and steered industrial policy and basic income guarantee.Footnote 36

This reformation of the left also occurred in Finland. As stated above, the SDP accepted pro-market policies as a new guideline in their economic policy. A new Finnish consensus was built around more pro-market policies in comparison to the old economic strategies. What has been given less attention in the historiography is the role of state-directed industrial policy and the remodelling of the public administration in the consensus, and, in particular, the connections between these two policies. To uncover the roots of these new ideas for public administration and the ways in which public services were provided, I will start with cooperation in the OECD.

Responses to the crisis in the OECD and in Finland

From a theoretical and methodological point of view, it must be stated that it is not possible either to prove the influence of the OECD with compelling archival evidence or to measure the impact of its influence, as the OECD has no power to enforce any reforms in its member countries. The guidelines of the OECD are nothing more than that. End results also often differ from the originally intended objectives of the OECD, as local customs, institutions and traditions have an impact on the outcome of reforms. It is nevertheless possible to detect a convergence of policies, for example in the marketisation and privatisation of many services in the public sector. One way to understand this convergence in terms of theories of power is to apply Michel Foucault's idea of ‘governmentality’, in which the collective mentality or thinking about government becomes unified or standardised. This describes a process in which the ‘truth’ about the government is produced by social, cultural and political practices. In modern societies, this usually includes some kind of concept about the economy. At the same time, the way we govern ourselves shapes the way we produce ‘truth’. The government involves not only power relations but also issues of identity.Footnote 37

In practice, one way in which the power of the OECD evolves is through peer pressure, in the sense that, at least in the public discourse in Finland, it is possible to explain the someone's stance by referring to the materials produced by the OECD or the recommendations given by it. There are several ways to do this. It is possible to refer to the OECD as the leading expert or to claim that ‘modernisation’ can only be done in one specific way and that it is impossible for one country to fight against the majority which the OECD is said to represent. For example, local actors can use rankings and other comparisons between member countries to defend their positions. If the ranking is poor, the local actor can justify its demand to increase resources for the sector the actor is representing by saying that ‘we are lagging behind’.Footnote 38

Traditionally in the history of ideas influence is proven when contact has taken place, and it is possible to identify a temporal dimension. In this context, it is appropriate to deal with the question of why an idea was adopted. What were the problems the actors tried to solve by implementing this idea?Footnote 39 In this case, the contact and temporal dimension are easy to prove because civil servants who were later in charge of the Finnish reforms participated actively in the meetings of the OECD.Footnote 40

The OECD's reaction to the crisis

The OECD immediately reacted to the first oil crisis by suggesting that reforms in the public sector could help overcome the difficulties. In 1973 the OECD organised the first ad hoc meeting in which civil servants from different countries discussed the condition of the public sector. Their purpose was to think about ways to intensify cooperation between member countries by implementing structural innovations in the sector of public administration. A second meeting was organised in 1974 and a third in 1975. After the meetings, the decision was made to continue with regular meetings within the Technical Cooperation Committee (TECO).Footnote 41

At the beginning, the issues that were discussed within TECO were much broader than simply developments in the public sector. This changed after the second oil crisis in 1979 which promptly led to the modification of TECO's mandate in order to put ‘the phenomenon of big government’ at the centre of the agenda. This phenomenon was seen as a ‘central feature of the age’.Footnote 42 The mandate was changed even though there was no consensus among the participants concerning the question of a causal relationship between the size of the public sector and the recession.Footnote 43 Opinions were fairly evenly divided. One school of thought regarded the growth of the public sector as a natural by-product of urbanisation, economic growth and political activity. In this sense, its growth was not seen as inherently negative. Another school, by contrast, strongly criticised the growth of the public sector, as they thought that it had got out of control and threatened the viability of the private sector.Footnote 44

With the new mandate, the second opinion became dominant, and public management was put before anything else. The growth of the public sector was regarded as a hazard to the efficient allocation of resources and to the functioning of democracy.Footnote 45 The most crucial issues were reducing the tax burden, diminishing the size of the public sector and improving work incentives for public employees.Footnote 46 The main instruments used in order to achieve these goals were privatisation, market-type mechanisms and resource allocation.Footnote 47

TECO discussed several concepts of resource allocation, but in the end priority was given to the concept which was supposed to produce more efficient control over public expenditure and improve the decision-making regarding resource allocation –the centralisation of power over public resources. In order to completely understand the reasoning behind the allocation of resources, we have to go back and look in detail at the debate that occurred before TECO's mandate was changed.

One aspect of the discussions in TECO meetings was dealing with the ongoing structural change to the ‘post-industrial’ era and what public managers and civil servants could do to manage this shift: ‘All [countries] are, however, confronting the problem of transition to what has been varyingly described as post-industrial, technotronic or cybernetic civilization. Each is therefore required to face the challenge this raises for its existing system for managing the public's business.’Footnote 48

This structural change was also widely discussed in other committees of the OECD.Footnote 49 In 1976, for example, the OECD organised a conference on computers and telecommunications in which the ongoing crisis was interpreted as a crisis of overproduction leading to a deficiency of capital and a lack of investment opportunities. The proposed solution was to create a new branch of production by means of telecommunications and computers.Footnote 50 This was also a widely supported approach in European academia, where the future of the post-industrial society was debated extensively during the 1970s and 1980s. The partially overlapping concepts of the ‘information society’ and the ‘service society’ were perceived as alternatives to the declining industrial society.Footnote 51

Thus, by combining these different views, it is possible to deduce that by the ‘re-allocation of a nation's scarce resources’ TECO was convinced that its mission was the redistribution of resources from public services to private and public industry – most importantly, the telecommunications and electronic industries – and to reallocate resources also within public agencies.Footnote 52 One of the issues in the new TECO was the ‘structural and organisational aspects of industrial policy implementation’. Among the programme's objectives were innovations for new mechanisms of cooperation between public authorities and the private sector, improvements in investment choices and thoughts about relevant programmes for scientific and technological research.Footnote 53 From the perspective of TECO, public management reforms were also a part of industrial policy.Footnote 54 Public resources were to be reallocated to the new branches of industrial policy: public research & development (R&D) and public venture capital. By adopting this approach, nations would be able to overcome the overproduction crisis, which had been negatively impacted by the lack of investment capital in the information technology sector.Footnote 55 In addition, the privatisation of utilities – like telecommunication services – were considered one way to create the infrastructure for the new marketplace in an ‘information society’.Footnote 56

Interpreting NPM merely as a part of the wave of (neoliberal) deregulation or as a leftist campaign to maintain the welfare state by making welfare services more efficient is not convincing. The aspects mentioned above indicate that new ideas about public management were closely tied to new ideas on industrial policy and the development of technology. This, however, was not the first time that private sector management methods were tried within the public sector. Back in the 1960s public sector reformers in Finland had already intended to use management by objectives in public administration. This, however, had led nowhere because private sector methods were seen as unfit for the public sector. Public organisations were seen as functioning according to different values in comparison to private organisations.Footnote 57 Therefore, it is essential to take a closer look at why it was politically feasible to carry out these reforms in the late 1970s when it had been impossible in the 1960s.

The response in Finland

In Finland the wave of NPM reform started within the new consensus of the late 1970s. The first time the improvement of the public administration and public sector was mentioned in the government platform was in 1977 when Prime Minister Kalevi Sorsa, who was also the SDP's chairman, committed the so-called resuscitation or stimulus government to tackle unemployment. Resuscitation/stimulus did not refer to Keynesian-type policies but rather to new industrial policies that emphasised public research and development projects alongside so called supply-side policies including austerity measures and policies to reduce inflation.Footnote 58 What has been given less attention is that the government also wanted to reform the public sector and public administration.

Sorsa explained the new attention given to the public administration in 1979 when the SDP launched a campaign against the rigidities of public sector bureaucracy. Sorsa stated that he feared that voters identified the SDP with bureaucracy because the party had defended the public services in late 1960s and early 1970s.Footnote 59 The SDP was therefore concerned that they would suffer the same fate as their sister party in Sweden, which had lost the election in 1976.Footnote 60 The other reason for the campaign was the recession, which was interpreted within the SDP as an overproduction crisis. Sorsa referred to Kondratiev's waves and argued that capitalism was at a crossroads: it needed a new industrial branch to restart growth. According to Sorsa, the electronics industry was the most promising bet.Footnote 61

In 1977 Sorsa declared that Finland needed new industrial investment to prevent unemployment from rising. In Sorsa's view, the capital needed for this investment should be provided by the state after the public sector had been downsized. Although the SDP talked publicly only about the public administration, the discussed reforms were clearly intended to downsize the public sector as a whole. The SDP stated that it was possible to reduce the size of the public sector and cultivate the welfare state by making it more efficient. Saved resources were to be reallocated to private industry.Footnote 62 Thus, one of the aims of the NPM reforms was to create resources for investments in R&D and venture capital. In Finland public sector reforms as well as the reevaluation of the functions of the state and municipalities were part of this new industrial policy, which was in accordance to the ideas laid down in the OECD.

It is possible that the Cold War also had an impact on the new thinking about public research and development. By promoting public investment in technology, Finland was manifesting the independence and neutrality of the country in much the same way as France wanted to reject the influence of the United States by investing in new technology including nuclear power, Concorde, Minitel (a forerunner of the internet) and electric cars.Footnote 63 But this question needs more research in the Finnish case. The Cold War also affected the contents of NPM because its intellectual influences came mainly from United States. Student exchange programmes financed by the United States furthered this trend.Footnote 64

The popularity of decentralisation

The problem with the new industrial policy, which was tied to public sector reform, was that it required a centralisation of power over public resources and centralising was not popular phenomenon, whereas decentralisation was. The popularity of decentralisation really took off in the 1960s. The patchy ‘spirit of ’68’ that spread to almost all corners of the Western world criticised, for example, bureaucracy, centralisation, consumerism and technocracy. The new left movement also accused ‘state monopoly capitalism’ of being a new form of fascism. According to this critique, the state, which was involved in promoting economic growth, was repressive, anti-democratic and later also environmentally irresponsible. The movement embraced ‘participatory democracy’ and decentralisation as a counter-measure against the allegedly repressive and alienating state.Footnote 65

The New Left movement also had an impact in Finland. Finnish students criticised consumerism and a welfare state that was built around the idea of never-ending economic growth and the exploitation of natural resources.Footnote 66 The Communists, who were particularly popular among students in the early 1970s, also adopted the discourse of ‘state monopoly capitalism’.Footnote 67 At the end of the 1970s, the Green movement, founded on the anti-consumerist ideas of the 1960s, emphasised decentralisation in an even more assertive way. In Finland the Green movement manifested itself in the youth section of the Agrarian-Centre Party, who supported communal democracy, limited growth and environmental issues.Footnote 68 In 1979 the Finnish Business and Policy Forum argued that this movement calling for a ‘soft’ and ‘green’ society was the most dangerous counter-movement against capitalist Finland in late 1970s and early 1980s. Olof Palme's Sweden, not the Soviet Union, was the direction from which the challenge to the private sector came. The fear of the Soviet Union and communists had ebbed by 1979 at the latest, and Palme and the Green movement were seen as a new threat instead. In addition to this youth movement, the SDP started to embrace ‘democracy’ in its all forms. Mostly this was adapted from Sweden, where Palme saw democracy as a next step in the evolution of the welfare state.Footnote 69 The SDP in Finland also wanted to promote de-bureaucratisation, decentralisation and democracy.Footnote 70

It is not feasible to go deeper into the nuances of the New Left movement in Finland, but the point here is that the New Left and the Green movement criticised some aspects of the welfare state and ennobled ‘decentralisation’ in a way that still applied in the 1980s. In Finland ‘decentralisation’ had acquired such positive connotations that both main parties – the SDP and the Agrarian-Centre Party – supported decentralisation in the early 1980s.

In addition, the positive connotations of decentralisation were boosted in Finland by the fact that the welfare state was built on centralising principles. In the post-war era, the functioning and existence of municipalities was seen mainly from the state's perspective: the task of the municipalities was to provide welfare services as ordered by the state.Footnote 71 During the building of the welfare state, this centralised model had been seen as practical and modern. To put it simply, the state paid for the duties it conferred to the municipalities. Thus, one could say that the state bought itself the right to establish the norms and to give orders to the municipalities. Subsequently, the autonomy of municipalities was not a high priority issue, politically or socially. More important instead was the quality of the welfare services and the equality of the citizens living in different municipalities.Footnote 72 At the same time, local economic disparities were reduced.Footnote 73 By the 1980s the state had already become responsible for over 80 per cent of the tasks of the municipalities.Footnote 74 In essence, the system worked in such a way that the state provided resources and issued guidelines regarding education, health care and social policy to municipalities, which in a turn took care of the provision of these services. The foundations of this system had been laid in the nineteenth century and were originally intended to force penny-pinching municipalities to put their resources into their statutory responsibilities.Footnote 75

The positive connotations of decentralisation were manifested in the many committees that were established in the late 1970s and early 1980s to decentralise administration and public power. All these committees understood decentralisation according to the principles laid down in the 1960s: communal democracy was their intended target.Footnote 76 But times were changing because the new industrial policy required centralisation of the public resources. Eventually this led to political battles over the meaning of the concept of ‘decentralisation’. The theme of decentralisation also spread quickly into the public management discourse that was gradually percolating from the small circle of civil servants who had participated in the OECD-meetings into the wider public political debate.

Centralising reforms

To understand the battle over the meaning of ‘decentralisation’ we have to look more closely at the actual reforms made in name of the improvement of administration.Footnote 77 While the beginning was slow, in 1983 another Sorsa-led government eventually created a committee to ‘decentralise’ the administration. The committee's publicly expressed objective was to decrease hierarchy and transfer responsibilities to the municipalities. This was the first time that decentralisation had other meanings than the principles laid down by the New Left.

When the committee started working, the members had trouble understanding their mandate because, in their eyes, it was inconsistent. One member of the committee stated: ‘The main target in the assignment was to decentralise the power and jurisdiction of the central administration to municipalities while at the same time the assignment assumes we will present proposals to reassert the power of the ministries.’Footnote 78 Members of the committee could not understand how these objectives could be reconciled. They solved the problem by reading the government's memo about the improvement of the administration, which existed as an addendum to the government budget. This memo stated that the main objective was to give more power to central government, so that it could function as an efficient headquarters for the ministries.Footnote 79 The result of this reasoning was that the committee defined ‘decentralisation’ as a process in which orders from the central government were to be carried out as efficiently as possible by central agencies as well as by municipalities.Footnote 80 The committee said they were decentralising power from the hands of civil servants in the central agencies to the ministries.Footnote 81 ‘Decentralisation’ was therefore not to be defined as an increase in the autonomy of the municipalities or as a way to promote communal democracy, but – in the spirit of the NPM – as efficient leadership. This was the first ‘crossroads’ where ‘decentralisation’ was defined as the efficient leadership of the state, a notion that would be buttressed by subsequent reforms.

In the end the committee proposed a new way of organising the jurisdiction between the state and the municipalities, which they thought would be the best way to reassert the power of the ministries. They justified the proposal as ‘modernisation’ and ‘decentralisation’, which would improve service quality and reduce bureaucracy at the same time, thereby enhancing the efficiency of the public sector.Footnote 82 Although the committee did not propose the use of management by results, this concept also found its way onto the agenda during the implementation phase. The government, again led by Sorsa, dealt with the proposals made by the committee in 1987 by adding management by results to the topic of decentralisation.Footnote 83 This decision increasingly reasserted the power of the ministries. The government and the ministries wanted to give result targets to the central agencies and the municipalities.Footnote 84 Management by results was also a big international trend. In the United Kingdom, for example, financial administration was reformed according to the management by results approach in the 1982 budget reform, which was later described as a starting point of the managerial ‘revolution’ of Thatcherism.Footnote 85

The following government (1987–1991), made up of the Coalition Party and the SDP, and led by Harri Holkeri from the Coalition Party, continued from where the previous government had left off.Footnote 86 It founded a new ministerial committee named Hallinnon kehittämisen ministerivaliokunta (HALKE) to speed up the reforms. Within the framework of the proposal, the ministries were given the possibility to claim different kinds of control reports from the central agencies that in turn controlled the municipalities. They were supposed to provide their services more efficiently than before by applying market-type mechanisms. In this way, the entire system was meant to function in the same way as modern management in private organisations.Footnote 87

In the spring of 1988 the government finally published a proposal for ‘decentralisation’. In this proposal, management by results now played a major role. The main purpose of the reform was to give ministries the means and techniques to control the total expenditure of municipalities and the central agencies.Footnote 88 This was linked to the aim of transferring operational autonomy to the municipalities. From 1988 onwards management by results was implemented throughout the public sector. Attention was focused on results and efficiency targets, which were presented in the budget proposal and detailed between the ministry and the central agency concerned.Footnote 89 The government also tried to apply management by results to the relationship between the government and the municipalities, so that it would be able to give them different set of goals.Footnote 90 The publicly expressed idea was to enhance the motivation of employees in the municipalities and to intensify the interaction between citizens, the business sector and the administration.Footnote 91

Although ‘decentralisation’ was used as the main justification of the reforms (including management by results), it led in many ways to the centralisation of power. The main reason for this was that, paradoxically, the reform gave power to the central government and ministries. To the SDP decentralisation meant transferring power from the hands of civil servants in the central agencies to the ministries. However, to the Agrarian-Centre Party, decentralisation meant the autonomy of the municipalities and communal democracy. The rationale behind this difference was that ‘decentralisation’ resonated with the old power struggle between the parties. The building of the welfare state had led to a swelling of central government. On the one hand, according to the Agrarian-Centre Party's view, this had bolstered the power of the Social Democrats, which could now be tackled by supporting the decentralising of power. On the other hand, the Agrarian-Centre Party was so dominant in local politics that the SDP feared that the power of Agrarian-Centre Party would grow should the municipalities be given more power.Footnote 92 During this political struggle, the programme of the SDP emerged triumphant. The central agencies, which were the backbone of the welfare state, were abolished, and power became centralised in the ministries through management by results. Some of the power struggles also took place inside both parties. The SDP had two major clusters inside the party: a trade union group, which sided with the party elite and gave industry priority, and a social policy group, which was associated with feminism and wanted to give the welfare state priority. The latter loudly criticised the centralising policies of the government, which they saw as way to weaken the foundations of the welfare state.Footnote 93 The Agrarian-Centre Party also had a group who did not want to emphasise the autonomy of municipalities as much as party had done in the past. These dividing lines also explain why the NPM reforms survived the coalition changes during the different governments mostly intact, as well as the fact that the one of the central justifications – ‘decentralisation’ – was so flexibly defined.

The point here remains that the centralising of power over resources was justified by a management discourse which separated ‘operational’ from ‘strategic’ power: the state was to be in charge of the latter and the municipalities the former.Footnote 94 Because the reform gave operational power to the municipalities, it was still possible for both parties to claim that power was decentralised. This dichotomy between operational and strategic power was also the core idea of management by results, as its aim was to move away from hierarchical management without losing control over the workshop floor.Footnote 95

This technique of separating strategic from operational power, which became popular in Western management textbooks in the 1980s, was originally copied from Japanese automotive companies, where the idea of the autonomy of the factory floor was widespread.Footnote 96 The distribution and delegation of power had been debated for a long time in organisational theories. Originally it was thought that delegating would cut transaction costs because there would be less information to transfer. This argument was the same one that Friedrich A. von Hayek used against the planned economy. According to Hayek, markets with price signals were more efficient than planned economies. In organisation theory it was claimed that some kind of control was necessary to prevent the factory floor from acting according to its own preferences.Footnote 97 This was called the principal-agent problem. In the 1980s it was argued that information technology would solve the problem because the movement of information was becoming cheaper and cheaper. It was now possible to maintain control and give some autonomy to the factory floor.Footnote 98 This process occurred in parallel with a discussion about wage earner funds. As in Sweden, the Finnish trade unions wanted to create industrial and office democracy on the workshop floor by setting up wage earner funds. This was furiously countered by the employers’ association, who instead created performance-related pay, which was heralded as the ‘empowerment of the workshop floor’. In short, in Finland workplace democracy and wage earner funds were prevented by performance-related pay.Footnote 99

The reform created path dependencies so that from this point forwards ‘decentralisation’ was understood in terms of NPM. Thus it meant efficient leadership and not the autonomy of the municipalities, in keeping with the ‘spirit of ’68’. This was in line with the interests of the Ministry of Finance, which aspired to control public resources more effectively. The only problem was that, from their point of view, the reform was crippled by the fact that, in practice, the state was not able to set the goals that management by objectives required because the instrumentation was inadequate. This meant that auditioning and measuring the results was impossible because there was no agreement amongst different ministries and municipalities about how and what should be measured. In addition, the law did not give the state adequate power to force the municipalities to pursue the objectives that it set.

Because management by objectives fell short, problems were to be solved by a new reform. The state's power over the municipalities was further intensified by the reform of the state transfer (or subsidies) system, which was prepared in the 1980s and implemented in 1993.Footnote 100 This reform was also justified by ‘decentralisation’. It was claimed that the old model – in which municipalities were guaranteed a percentage of expenditures from the government – was wasteful of resources.Footnote 101 The idea of the reform was to structure these transfers as a lump sum based on the population and age structure of the respective municipalities. They were then given free rein to allocate this lump sum according to their own ideas of how to perform the welfare services the ministries ordered them to provide.Footnote 102 The claim of the reformers was that the cost-based systems did not sufficiently emphasise the economic responsibility of the municipalities, as they did not have an economic incentive to prioritise or rationalise service production. This led to poor ‘controllability’, which meant that expenditure increased. The state, especially the Ministry of Finance, did not have the means to cut and control the resources given to the municipalities. It was claimed that a system in which the central government incurred such a high percentage of expenditure caused a sharp increase in the public deficit. The municipalities were also suspected of misuse of funds: it was claimed that municipalities generated expensive services on purpose to maximise transfers from the central government. This idea was clearly drawn from the increasingly fashionable public choice theory.Footnote 103 The other problem was that the old system prevented the privatisation of services. Several regulations, which prevented competition and privatisation, were therefore dismantled.Footnote 104

The reform of state transfers also included a move towards ‘frame budgeting’, in which the government would make a once-a-year-decision on public expenditure for the following year, as well as the next three years after that. All ministries would then continue their budget preparation according to these financial parameters. In the process of defining budget frames the government had the opportunity to both prioritise and coordinate policy areas. At the same time, ex ante budget controls were replaced with ex post reporting, auditing and evaluation. This put the state in total control of the resources that municipalities would receive in the future. The new budget system also increased the power of the Ministry of Finance because it was given a significant role as a producer of calculations of the newly framed budgets.Footnote 105 Now the state could command how the public resources could be reallocated. This reform was again justified as a move towards ‘decentralisation’ with the help of the separation of operational and strategic power.

For municipalities, the reform meant that they could decide how to make the results and cuts but not what results should be pursued, nor how many cuts should be conducted. With this reform the municipalities obtained more autonomy over fewer issues, which led to furious criticism from those who thought that the end result was a perverse malformation of the original aim.Footnote 106

The new law finally came into force in 1993 after nearly a decade of preparation and debate. At that moment the government, led by the Agrarian-Centre Party, faced the most severe recession of the post-war era. The recession helped to silence doubts about the reform.Footnote 107 At the height of this crisis, unemployment rose to 20 per cent. The new crisis brought the old answers to the floor again: the government wanted to give priority to public R&D and venture capital. It stated that the state subsidy reform was to be part of the austerity measures, while at the same time the government was ready to give public investments to the R&D sector and also to provide venture capital.Footnote 108 After these reforms, the power over public resources was firmly in the hands of the state. The old centralised welfare state had become even more centralised.

The centralisation of power over resources

The NPM reforms were launched in the context of crisis and were part of the new industrial policy in which resources were moved from the welfare services to public R&D and venture capital. In the late 1970s the SDP stated that it was necessary to increase investment in industry by ‘restraining the growth of the public sector. The austerity measures must be targeted on the administration.’Footnote 109 The crisis had created a lack of capital that was to be corrected by administrative reform. Industry and the development of information technology required more resources, which were to come from the welfare sector. In the government platforms of the 1980s – most governments were led by the SDP – administrative reforms were seen as a part of the economic recovery. Also within the other major party, the Agrarian-Centre Party, environmental issues were put aside in the face of slow economic growth while industrial policy came first on its list of priorities.Footnote 110 This policy was put back on top of the list when, in the early 1990s, Finland encountered an even more severe recession than that of the 1970s. Centralisation was completed with the passage of the state subsidy reform amid an atmosphere of crisis which, it was claimed, justified radical reform. When power over resources was centralised, it was easier to cut the subsidies to the municipalities, even though the government had promised not to do so.

This promise, which was part of the new subsidy legislation, was never kept. Between 1991 and 1999 the state slashed subsidies by 15 billion marks. In the 1990s state subsidies to the municipalities constituted 25 per cent of its expenditure, but by the end of the 1990s this portion had been reduced to 15 per cent.Footnote 111 In 1993 state subsidies formed 46 per cent of the municipalities’ revenues, yet in 2002 this share was down to only 13 per cent.Footnote 112 At the same time, the state squeezed the budget by a total of 57 billions marks (10 per cent of the GDP).Footnote 113 In applying the new state subsidy law, the resources given by the state to the municipalities were diminished. This meant that the budget cuts affected welfare services. The only place where cuts were not made was in public research and development and public venture capital. In 1989 public R&D was 576 million Euros; by 2002 it had risen to 1454 million Euros. The fastest growth occurred in the late 1990s.Footnote 114 Although private R&D investments also grew rapidly, public R&D was justified by the idea that a ‘peripheral’ country just could not attract enough private investment.Footnote 115 The state also founded the Finnish Funding Agency for Technology and Innovation (TEKES) in the early 1980s to channel public R&D resources to private corporations.Footnote 116 Even in the midst of the recession in the early 1990s, the resources of TEKES grew rapidly.Footnote 117 Although the government invested in R&D, this was thought to be inadequate. When the recession hit, the government claimed that there was also a need to attract more venture capital to Finland. The lack of high risk capital had been one of the recurring economic themes of the 1980s.Footnote 118 Economics had proven that there was a strong link between healthy domestic financial markets on the one hand and economic growth and innovation on the other hand, as the relevant information for investors was locally available.Footnote 119 The ideas of the innovation guru Peter Porter were internationally well known, but they were particularly widely discussed in Finland.Footnote 120 The significance of a local ‘cluster’ of producers and users was an important aspect of Porter's model, and it became the backbone of a public investment policy in which ‘nations’ compete, not just individual companies.Footnote 121

In order to start its public venture capital investments, the government passed a new law in 1991 in which the Finnish Innovation Fund (SITRA) was ordered to focus on high-risk investments. The government gave SITRA 400 million marks plus 100 million marks in stocks of the mobile phone company Nokia. The stock price grew 40-fold in a few years.Footnote 122 As a result the venture capital investments were almost solely public in the 1990s.Footnote 123 The government also founded other organisations to channel public high-risk investments, including the Finnish Industrial Investment, Finnvera and the Finnish Industrial Bail Fund.Footnote 124 Without the NPM reforms, which centralised the power over resources to the state, this reallocation of public resources would have been impossible.

Conclusion

Administrative reforms, which fall under the label of New Public Management, were not only part of the neoliberal response to the crisis of the 1970s or a strategy to make welfare services and administration more effective – as they are usually interpreted – but also part of a new kind of state interventionism. In Finland, the composition of the state was changed from a traditional welfare state to a ‘venture capitalist’ and ‘research and development’ state. NPM reforms were created in the context of an overproduction crisis in the traditional industrial sector and information technology was seen as a possible saviour in this structural change. This meant that these market-type management doctrines, which were applied to the public sector, also had other goals than the neoliberal ones, such as cutting red tape and putting an end to ‘big government’. Finland was influenced by the OECD, which also discussed these themes at the time.

The point here is that, especially in Finland, the NPM doctrines were used as a tool for centralising the power of the municipalities in central government. This was done because the government wanted to reallocate public resources from welfare services – for which the municipalities were responsible – to industrial policy. It was thought that by investing in public R&D and venture capital it would be possible to overcome the crisis by creating a new line of production based on information technology.

The end results matched those of other countries that had implemented NPM-style reforms. According to John Gray, the quasi-markets in the British public sector are the most grotesque result of the Thatcher era. The political ideology that attacked corporatism and centralised power subordinated the relatively independent local government and public institutions to the tight leash of the central government.Footnote 125 This was also in line with Jamie Peck's analysis of the neoliberal project: despite the rhetoric it has always been about gaining power to reuse the state rather than to hollow it out. The state is compelled to save the market system with repeated interventionist acts. The frictionless market rule is beyond reach and is replaced with different and varying interventions of the state. At the same time, the tasks of the state are repeatedly modified.Footnote 126 It is also parallel with Giovanni Arrighi's analysis of the cyclical adjustments of capitalism, in which the falling rate of profit leads to the search for new investment opportunities both spatially and structurally.Footnote 127 Finnish reforms resemble the reforms made in Denmark, for example. According to Jensen and Wanna, NPM-type reforms were used there to increase the power of the ministry of finance. The tendency since the 1970s to enhance the power of the central budget agencies has also been observable in many other OECD countries, including Canada, New Zealand, Germany, Sweden and Holland.Footnote 128 Alasdair Roberts argues that logic of discipline has been carried through the realm of economic governance since the 1980s. For example, central banks, ministries of finance and docks were put beyond direct democratic control in the name of efficiency.Footnote 129 Phillip Mirowski also argues that the aim of administrative reforms since the 1980s has been to build a strong state so as to restrict democracy.Footnote 130

Paradoxically, in Finland this centralisation was justified as a move towards ‘decentralisation’, a concept that still enjoyed more favourable connotations because of the lasting effect of the ‘spirit of ’68’. In practice the political battle over the meaning of ‘decentralisation’ was fiercely contested by the main political parties. During this battle the meaning of this concept was altered with the help of NPM, which separated ‘operational’ and ‘strategic’ power. In the late 1960s decentralisation referred to the autonomy of the municipalities, but in the 1980s it referred to ‘efficient leadership’, which was put in to practice by giving more power over resources to central government.

The first major reform reasserted the power of the ministries and adopted a doctrine called management by results, which gave ministries the power to dictate objectives and target levels for local government performance. Effectively this meant that central government ministries made the decisions on what municipalities could and should do; all that remained for local governments was to decide how they would produce the services and achieve results. Centralisation was also enhanced by a reform of the system of central government subsidies, which was implemented in 1993. This reform marked a significant departure from the traditional system, in which municipalities were paid a percentage of their actual expenditure. Instead they were now given a lump sum based on population and age structure. With the help of the lump-sum system and reasserted power, the state could cut the resources going to the municipalities. This meant that the central government could lower the level of subsidy to local government without having to make politically difficult and unpopular cuts in public services. Municipalities instead now made those cuts, while the central government was able to concentrate on promoting the new industrial policy with its new resources.

Footnotes

1 Hood, Christopher, ‘A Public Management for All Seasons’, Public Administration, 69, 1 (1991), 3–19.

2 Pollitt, Christopher, Managerialism and Public Services. Cuts or Cultural Change in the 1990s (Oxford: Blackwell, 1993), 1–27.

3 Haynes, Philip, Managing Complexity in the Public Services (Maidenhead: Open University Press, 2003), 5–10.

4 Pollitt, Christopher and Bouckaert, Geert, Public Management Reform. A Comparative Analysis (Oxford: Oxford University Press, 2000), 6–8.

5 Saint-Martin, Denis, Building the New Managerialist State. Consultants and the Public Sector Reform in Comparative Perspective (Oxford: Oxford University Press, 2000), 14–5. See also Osbourne, David and Gaebler, Ted, Reinventing Government. How the Entrepreneurial Spirit Is Transforming the Public Sector (Reading: Plume Book, 1993), 15.

6 Saint-Martin, Building, 25. Path dependency offers an explanation for situations in which a chain of events, evolution or end results of a conflict are impossible to understand without historical context. Preceding nodes or crossroads define the number of choices available in the next phase. ‘Path dependency is a way to narrow conceptually the choice set and link decision making through time’. North, Douglas C., Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990), 98.

7 Kiander, Jaakko and Lönnqvist, Henrik, Hyvinvointivaltio ja talouskasvu (Helsinki: WSOY, 2002), 14–8.

8 The Welfare State in Crisis: an Account of the Conference on Social Policies in the 1980s, OECD, Paris, 20–23 October 1981 (Paris: OECD, 1981), 30–1, 41–50; on the conference in Korpilampi see Saari, Juho, ‘Suomalainen konsensus – Korpilammen konferenssi (1977) käännekohtana’, Yhteiskuntapolitiikka, 75, 5 (2010), 469–87 and Klinge, Matti, ‘Konsensus’, in Meinander, Henrik, Tasavallan tiellä (Helsinki: Schildts, 1999), 451–2.

9 See for example Lähdesmäki, Kirsi, New Public Management ja julkisen sektorin uudistaminen: tutkimus tehokkuusperiaatteista, julkisesta yrittäjyydestä ja tulosvastuusta sekä niiden määrittelemistä valtion keskushallinnon reformeista Suomessa 1980-luvun lopulta 2000-luvun alkuun (Vaasa: Universitas Wasaensis, 2003), 150, 198–202; Temmes, Markku, ‘Suomen hallintopolitiikan pitkät aallot ja käännekohdat’, Hallinnon tutkimus, 3 (2008), 69–79.

10 On recent interpretations of neoliberalisation, see Willem Zuidhof, Petrus, Imagining Markets. The Discursive Politics of Neoliberalism (Rotterdam: Erasmus Universiteit Rotterdam, 2012), 139–50; Van Horn, Rob and Mirowski, Phillip, ‘The Rise of the Chicago School of Economics and the Birth of Neoliberalism’, in Mirowski, Philip and Phlewe, Dieter, eds., The Road from Mont Pélerin. The Making of the Neoliberal Thought Collective (Cambridge, Mass: Harvard University Press, 2009), 159–62; Roberts, Alasdair, The Logic of Discipline: global capitalism and the architecture of government (Oxford: Oxford University Press, 2010), 23–96, 140–6. See also Phillip Mirowski, ‘Postface: Defining Neoliberalism’, in Mirowski and Plehwe, The road from Mont Pélerin, 434–5; Peck, Jamie, Constructions of Neoliberal Reason (Oxford: Oxford University Press, 2010), 9–10.

11 Christopher Pollitt and Dan Sorin: The Impacts of the New Public Management in Europe: A Meta-analysis, COCOP work package 1 – deliverable 1.1 2011, 30–6. http://www.cocops.eu/wp-content/uploads/2012/03/WP1_Deliverable1_Meta-analysis_Final.pdf (last visited 5 June 2014).

12 I will make a detailed analysis of the meaning of the word in its historical context. Reinhart Koselleck's idea is that we can understand the intentions of the actors better if we analyse their concepts thoroughly. Koselleck, Reinhart, ‘Begriffgeschichte and Social History’, Economy and Society, 11, 4 (1982), 409–15; idem, ‘Social History and Conceptual History’, Politics, Culture and Society, 2, 3 (1989), 312.

13 According to Huizinga, a historian must treat a research subject and events as situations in which several different choices are still open with several possible outcomes. See Huizinga, Johan, Historian olemus. Esseitä ja tutkielmia (Porvoo: WSOY, 1967), 49. On crossroads see Bergholm, Tapio and Saari, Juho, ‘Tapahtumaketju ja solmukohdat: Heikki Waris ja ammattiyhdistysliikkeen eheyttäminen 1946–1966’, Yhteiskuntapolitiikka, 75, 3 (2010), 3–18.

14 In Finland ‘the state’ usually refers to the central government. In this article I will use the two terms as synonyms.

15 At the time stagflation was supposed to be impossible. The Phillips curve stated that the lower the unemployment, the higher the rate of inflation, Desai, Megnah, Marxin kosto. Kapitalismin uusi nousu ja valtiokeskeisen sosialismin kuolema (Tampere: Vastapaino, 2008), 95, 275–7.

16 See, for example, Bell, David, The Coming of the Post-Industrial Society – A Venture in Social Forecasting (New York: Basic Books, 1976); Webster, Frank, Theories of Information Society (London: Routledge, 1995), 30–2, 169; Gorz, Andre, Reclaiming Work. Beyond the Wage-Based Society (Cambridge: Polity Press, 1999), 12.

17 Lucas, Robert and Sargent, Thomas J., ‘After the Keynesian Macroeconomics’, in After the Phillips Curve. Persistence of High Inflation and High Unemployment (Boston: Federal Reserve Bank of Boston, 1978), 56–7; Lucas, Robert, ‘The Death of Keynesian Economics’, Issues and Ideas, Winter (1980), 18–19; see also Mankiw, Gregory, ‘The Macroeconomist as Scientist and Engineer’, Journal of Economic Perspectives, 20, 4 (2006), 33–4.

18 Glyn, Andrew, Capitalism Unleashed. Finance, Globalization, and Welfare (Oxford: Oxford University Press, 2006), 15–27.

19 For the critique of the welfare state in the 1940s and 1950s see, for example, Lowe, Rodney, The Welfare State in Britain since 1945 (London: Palgrave, 2005), 13; Smolander, Jyrki, Suomalainen oikeisto ja ”kansankoti” (Helsinki: Gummerus, 2000), 67, 86.

20 Christopher Pierson, Beyond the Welfare State. The New Political Economy of Welfare (Cambridge: Polity Press, 1998), 148.

21 On the attack on the Welfare State and Keynesianism see Landreth, Harry and Colander, David C., History of Economic Thought (Boston: Houghton Mifflin, 1994), 480–1; Mark Blyth, Great Transformations. Economic Ideas and Institutional Change in the Twentieth Century (Cambridge: Cambridge University Press, 2002), 148; Bonoli, Giuliano, George, Vic and Taylor-Gooby, Peter, European Welfare Futures. Towards a Theory of Retrenchment (Cambridge: Polity Press, 2000), 96–118; John Williamson, ‘What Washington means by policy reform’ (1989), http://www.iie.com/publications/papers/paper.cfm?researchid=486 (last visited 20 May 2013). Regarding confrontation and consensus see Geppert, Dominik, ‘Der Thatcher-Konsens. Der Einsturz der britischen Nachkriegsordnung in den 1970er und 1980er Jahren’, Journal of Modern European History, 9, 2 (2011), 184–5.

22 Bonoli, George and Taylor-Gooby, European Welfare, 59–62.

23 Desai, Marxin kosto, 326–8.

24 Magnusson, Lars, ‘Do the Nordic Lights Shine Bright Again? – Sweden's Response to the 1970s and 1980s Crisis’, Journal of Modern European History, 9, 2 (2011), 212.

25 On the economic crisis and its links to the size of the public sector see ‘Hallituksen tavoitteet ja toimenpiteet talouden tasapainottamiseksi ja työllisyyden turvaamiseksi’ 1976, Uab 12, Department of Budget, The Archive of the Ministry of Finance, The National Archives of Finland, Helsinki; ‘Toimitusjohtaja Max Jakobsonin vastaukset Etelä-Suomen Sanomien kysymyksiin’ 1975, 32, The Archive of the Finnish Business and Policy Forum, The National Archive of Finland, Helsinki; Holkeri, Harri, Itsenäisiä ajatuksia (Helsinki: Kirjayhtymä, 1977), 71–8.

26 Uljas, Päivi, Hyvinvointivaltion läpimurto (Helsinki: Into, 2012), 247–62.

27 Pekkarinen, Jukka and Vartiainen, Juhana, Suomen talouspolitiikan pitkälinja (Porvoo: WSOY, 1993), 343–4.

28 Kettunen, Pauli, Työjärjestys. Tutkielmia työn ja tiedon poliittisesta historiasta (Helsinki: Tutkijaliitto, 1997), 115–23.

29 Lundin, Per and Stenlås, Niklas, ‘Technology, State Initiative and National Myths in Cold War Sweden: An Introduction’, in Lundin, Per, Stenlås, Niklas and Gribbe, Johan, eds., Science for Welfare and Warfare. Technology and State Initiative in Cold War Sweden (Sagamore Beach: Watson Publishing International, 2010), 6–8.

30 In Finland the governments are multiparty governments.

31 Governments listed on the official site of Finnish government: http://valtioneuvosto.fi/tietoa-valtioneuvostosta/hallitukset/vuodesta-1917/tulokset/fi.jsp?report_id=V2 (last visited 6 September 2013).

32 Suomi, Juhani, Umpeutuva latu. Urho Kekkonen 1976–1981 (Keuruu: Otava, 2000), 33–5.

33 On the history of the Agrarian-Centre Party see Isohookana-Asunmaa, Tytti, Maalaisliitto-keskustan historia 5 (Keuruu: Otava, 2006), 434–532.

34 On the reasons for this see, for example, Hobsbawm, Eric, Äärimmäisyyksien aika (Helsinki: WSOY, 1999), 387; Wirsching, Andreas, ‘European Responses to the Crisis of the 1970s and 1980s: Introductory Remarks’, Journal of Modern European History, 9, 2 (2011), 167–8.

35 Blyth, Great Transformations, 148–50.

36 Harvey, David, The Condition of Postmodernity (Oxford: Blackwell Books, 1989), 354.

37 With regard to ‘governmentality’ see Dean, Mitchell, Governmentality. Power and Rule in Modern Society (London: Sage, 1999), 16–20.

38 On the ways in which OECD materials are used in Finland to justify different political stances see Alasuutari, Pertti and Rasimus, Ari, ‘Use of the OECD in Justifying Policy Reforms: The Case of Finland’, Journal of Power, 2, 1 (2009), 89–109.

39 On the methodology of the history of ideas see Hyrkkänen, Markku, Aatehistorian mieli (Tampere: Vastapaino, 2002), 136–57, 209–10.

40 All OECD materials used in this piece are located in the Finnish archives. I have not been able to link the OECD discussions about industrial policy more clearly to the Finnish ones; archival connection and the similarity of the themes discussed are the only connections at this point of my research. What is clear is that OECD material about the content of NPM reforms per se and the OECD material about the reforms in other OECD countries were actively used as role models and justifications in almost all Finnish NPM reforms. This applies to the reforms analysed in this article too: see, for example, Maailman paras julkinen sektori. Julkisen hallinnon kansainvälinen vertailuprojekti (Helsinki: Valtiovarainministeriö, 1993), 7–10, 20, 49–50, 59, 81, 131.

41 Meeting memo, 28 Nov. 1975, Experimental Project on innovation in the procedures and structures of government, Foreign Contacts 1972–1978, Hd 20, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

42 OECD, Paris, 17 Oct. 1977, TECO(77)11, Scale 2, Technical cooperation committee (TECO). Joint activity on public management improvement: policies and institutions, Foreign Contacts 1972–1978, Hd 20, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

43 The size of the public sector equals the proportion of public expenditures in relation to GDP.

44 OECD, 22 Oct. 1976, TECO(76)12, Technical Cooperation Committee (TECO) proposed joint activity in the field of public management, 4, Foreign Contacts 1972–1978, Hd 20, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

45 OECD/TECO, Paris, Mar. 1979, CT/PUMA/500, Cooperative action programme. Joint activity on public management improvement. Seminar for Controlling Public Expenditure, Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

46 OECD/TECO, Paris, 27 June 1980, C(80)115, Council Programme of Work of the Organisation for 1981: General lines of the Secretary-General's proposals, 10, Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki; OECD, Paris, 14 Apr. 1980, TECO(80)4, Appendix A(1), Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

47 OECD/TECO, Paris, 15 Apr. 1980, TECO(80)7, Technical Cooperation Committee. Outline of the Co-operative Action Programme for 1981 (Note by Secretariat), Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki; OECD, TECO, Paris, 25 Aug. 1980, CT/PUMA(80)1, Co-operation Programme. Steering Committee of the joint activity on Public Management Improvement, 2–3, Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

48 OECD/TECO, 22. Oct. 1976 TECO (76)12, TNAF, HD20. See also OECD/TECO, Paris, 27 Jun. 1980 C(80)115, TNAF, Hd22.

49 One of the goals behind the new mandate was the wish to strengthen the relationship of the committee's activities with the mainstream of the OECD's work. OECD, Paris, 14 Apr. 1980, TECO(80)4, Technical Cooperation Committee. Report on the Cooperative Action Programme for 1979, 1–2, Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

50 Pietarinen, I., Sauna-aho, J. and Takanen, I., ATK-politiikka ja tietoliikennepolitiikka. Report from the Computer/Telecommunications Policy-conference February 1975 (Helsinki: Ministry of Finance, 1975), 11–2.

51 Webster, Theories, 11, 30–2.

52 OECD/TECO, Paris, 20 Jun. 1980 TECO(80)9, 2, Technical Co-operation Programme. Joint Activity on Public Management Improvement. Summary Report on the Seminar on Controlling Public Expenditure (note by the Secretariat), Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

53 OECD, Paris, 15 Apr. 1980, TECO(80)7, TNAF, Hd22.

54 OECD, Paris, 14 Apr. 1980, TECO(80)4, Appendix A(iii), Hd22, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

55 Concerning the history of public research and development and venture capital see Kenneth Arrow, ‘Economic Welfare and the Allocation of Resources for R&D’, idem, in, Essays in the Theory of Risk Bearing (Chicago: Markham, 1971), 144–50; Fabrizio, Kira R. and Mowery, David C., ‘The Federal Role in Financing Major Innovations: Information Technology during Postwar Period’, in Lamoreaux, N. R. and Sokoloff, K. L., eds., Financing Innovation in the United States, 1870 to the Present (Cambridge MA: MIT Press, 2007), 283–300; Campbell, John L. and Lindberg, Leon N., ‘Property Rights and the Organization of Economic Activity by State’, American Sociological Review, 55, 5 (1990), 643–7.

56 Zysman, John and Newman, Abraham, ‘The State in the Digital Economy’, in Levy, J. D., ed., The State after Statism. New State Activities in the Age of Liberalization, (Cambridge MA: Harvard University Press, 2006), 280–2; Cowhey, Peter and Richards, John, ‘Building Global Service Markets: Economic Structure and State Capacity’, in Levy, J. D., ed., The State after Statism. New State Activities in the Age of Liberalization (Cambridge MA: Harvard University Press, 2006), 320–1.

57 Temmes, Markku, ‘Ohjaus-ja johtamisajattelun kehityksestä valtionhallinnossa’, in Tulosajattelu etenee valtionhallinnossa (Helsinki: VAPK-kustannus, 1990), 10; Stenvall, Jari, Herrasmiestaidosta asiantuntijatietoon: virkamiehistön asiantuntemuksen kehitys valtion keskushallinnossa (Helsinki: VAPK-kustannus, 1995), 253.

58 platform, Government, Talous-ja työllisyyspolitiikka, http://valtioneuvosto.fi/tietoa-valtioneuvostosta/hallitukset/hallitusohjelmat/vanhat/sorsaII/fi.jsp (last visited 2 March 2015); see also Hämäläinen, Sirkka, ‘Mauno Koivisto ja Suomen Pankki’, in Immonen, Keijo, ed., Pitkä linja. Mauno Koivisto. Valtiomies ja vaikuttaja (Helsinki: Kirjayhtymä, 1993), 151.

59 Kalevi Sorsa's statement in the Social Democratic Party meeting, 18 Aug. 1979, Minutes of the party council, Cb22, The Archive of the Labour Movement, Helsinki.

60 Östberg, Kjäll, När vinden vände. Olof Palme 1968–1986 (Stockholm: Leopard, 2009), 193–4, 234.

61 Kalevi Sorsa in a television interview, 28 Aug. 1979. The Finnish Business and Policy Forum Archive, 86, The National Archive of Finland, Helsinki.

62 Social Democratic Party meeting, 9 Mar. 1977, 14, The Archive of the Labour Movement, Helsinki.

63 Callon, Michel, ‘The Sociology of an Actor-Network: The Case of the Electric Vehicle’, in Callon, Michel, Law, John and Rip, Arie, eds., Mapping the dynamics of science and technology (London: Macmillan, 1986), 21–5; see also Hecht, Gabrielle, Radiance of France: nuclear power and national identity after World War II (Cambridge, MA: MIT Press, 1988), 330–1.

64 For the intellectual influences of Finnish youth see Kolbe, Laura, Eliitti, traditio, murros. Helsingin Yliopiston Ylioppilaskunta 1960–1990 (Helsinki: Otava, 1996), 250–63; For the intellectual influences of NPM see Hjerppe, Reino, Tutkimustyötä ja kehittämistä (Helsinki: VATT, 1980), 8–11, 14–5.

65 Horn, Gerd Rainer, The Spirit of '68. Rebellion in Western Europe and North America, 156–1976 (Oxford: Oxford University Press 2009), 1–4. For the original analysis see, for example, Poulantzas, Nicolas, State, Power, Socialism (London: Verso, 1980), 25–32, 55–6, 169, 190.

66 Kolbe, Eliitti, traditio, murros, 338–44.

67 Jalava, Marja, The University in the Making of the Welfare State (Frankfurt: Peter Lang, 2012), 90–3.

68 Isohookana-Asunmaa, Tytti, Maalaisliitto-keskustan historia 5 (Helsinki: Otava, 2006), 309–20; Kalevi Sorsa, Kansankoti ja punamulta, 448; Seppo Salminen, Hallinnon kehittämisen painopistealueet 1980–luvulla. Pohjoismaisen rationalisointikonferenssin RAKO-82 avajaiset 1.6.1982, Hg 51, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

69 Letter of Olof Palme to Willy Brandt and Bruno Kreisky, in Brandt, Willy, Kreisky, Bruno, Palme, Olof, Demokraattinen sosialismi. Kirjeitä keskusteluja 1972–1975 (Helsinki: Tammi, 1976), 86–7.

70 Östberg, Kjäll, När vinden vände. Olof Palme 1969–1986 (Stockholm: Leopard, 2009), 193–4, 234.

71 Tiihonen, Seppo and Ylikangas, Heikki, Virka, valta, kulttuuri. Suomalaisen hallintokulttuurin kehitys (Helsinki: VAPK-kustannus, 1992), 203.

72 Harisalo, Risto, Rajala, Tuija and Ståhlberg, Krister, Kunnallispolitiikkaa, (Helsinki: VAPK-kustannus, 1992), 67–8.

73 Finnish Law 665/1967.

74 Tiihonen, Seppo and Tiihonen, Paula, Suomen hallintohistoria (Helsinki: VAPK-kustannus, 1984), 214.

75 Soikkanen, Hannu, Kunnallinen itsehallinto kansanvallan perusta. Maalaiskuntien itsehallinnon historia (Helsinki: Maalaiskuntien liitto, 1966), 566.

76 Keskushallintokomitea KM 1978:22 (Helsinki: Valtion painatuskeskus, 1978), 3–10; Osallistumistoimikunta KM 1981:54 (Helsinki: Valtion painatuskeskus, 1981) 1–2; Lähidemokratiatoimikunta KM 1982:22 (Helsinki: Valtion painatuskeskus, 1982), 1–6; Kuntien itsehallintokomitea KM 1983:3 (Helsinki: Valtion painatuskeskus, 1983), 1–3.

77 Inspiration for this close reading of the changing meanings of concepts comes from Koselleck.

78 Luonnostelua komiteamietinnon 2. lukua varten, 2, 1 Jun.1984, 1, Archives of the Committee for Decentralisation, The National Archive of Finland, Helsinki.

79 H. Aaltonen, Tehtäväsiirtojen arviointi keskushallinnon sisäisen järjestelmän kannalta, 4 Dec. 1984, 2, FO 1, Archives of the Committee for Decentralisation, The National Archive of Finland, Helsinki.

80 T. Vuorela, Hallinnon hajauttaminen byrokratian vähentämisen keinona, 11. Oct. 1985, 9, FO 7, Archives of the Committee for Decentralisation, The National Archive of Finland, Helsinki.

81 New central agencies were founded especially during the 1960s and 1970s and constituted the basic infrastructure of the welfare state. The power struggle between central agencies and the ministries had a long history.

82 hajauttamiskomitea, Hallinnon, Hallinnon hajauttaminen KM 1986:12 (Helsinki: Ministry of Finance, 1986), 12–5; see also H. Aaltonen, Keskustelumuistio komitean tavoitteista, 8. 3. 1984, luonnos, 6–7, FO 2, Archives of the Committee for Decentralization, The National Archive of Finland, Helsinki.

83 hallitus, Suomen, Katsaus hallinnon kehittämiseen. Eripainos liitteestä 3 hallituksen esitykseen eduskunnalle valtion tulo-ja menoarvioksivuodelle 1988 (Helsinki: Valtion painatuskeskus, 1987), 12.

84 Summa, H., ‘Tulosohjaus hallinnan rationaliteettina ja tekniikoina. Arvioita tulosohjauksen valtionhallintoon jättämistä jäljistä’, Hallinnon tutkimus, 2 (1995), 144–5; see also Seppo Salminen, ‘Tuottavuuden kohottamistarve julkishallinnossa – keinot ja mahdollisuudet, Hallinnon kehittämisen luottamuskurssi 14.10.1981’, 4, Hg 51, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki.

85 Carter, Neil, Klein, Rudolf and Day, Patricia, How Organisations Measure Success. The Use of Performance Indicators in Government (London: Routledge, 1993), 7.

86 The other major party in government was the Social Democratic Party.

87 The Government of Finland, Katsaus hallinnon kehittämiseen, 12.

88 Proposal, 1 Feb. 1988, Valtioneuvoston toimenpiteistä hallinnon uudistamiseksi, meeting 4/88, H64:1, Ministerial Committee on the Improvement of Administration (HALKE), Archive of Prime Minister's Office, Helsinki.

89 Stenvall, Herrasmiestaidosta, 254–7.

90 This goal was mentioned in many occasions: 19 Sep. 1985, Järjestelyosaston lausunto Resurssihallinnon organisaatiotyöryhmälle, UAC 1, The Archive of the Ministry of Finance, The National Archive of Finland, Helsinki; Ministry of Finance, Tulosbudjetointi ja tulosohjaus (Helsinki: Ministry of Finance, 1990), 36; hallitus, Suomen, Julkisen sektorin uudistaminen: hallituksen päätös julkisen sektorin uudistamiseksi (Helsinki: Valtion painatuskeskus, 1992), 2, 6–7.

91 Hallinnon hajauttamiskomitea, Hallinnon hajauttaminen KM 1986:1, 3–9.

92 Isohookana-Asunmaa, Keskustan historia, 372–5.

93 See, for example, ‘Pesola ja Halonen kaavailevat kunnille tehokkuusbonuksia’, Helsingin Sanomat, 2 Dec. 1989.

94 Timo Lankinen, 20 Sept. 1991, Hallinnon hajauttamishanke ja opetustoimen hallinto, H65:1, The Ministerial Committee of Improvement of Administration (HALKE), Archive of Prime Minister's Office, Helsinki.

95 Fukuyama, Francis, State Building. Governance and World Order in the Twenty-First Century (New York: Cornell University Press, 2004), 67–76.

96 Actually, Japanese car companies originally copied this from the United States, but in the 1980s the direction was reversed.

97 Jensen, Michael, Foundations of Organizational Strategy (Cambridge: Harvard University Press, 1998), 2.

98 Fukuyama, State Building, 67–76.

99 On the victory of employers over industrial democracy see Manser, Markku, Suomalaista yhteiskuntaa rakentamassa. Suomen Työnantajain Keskusliitto 1980–1992 (Helsinki: Elinkeinoelämän Keskusliitto, 2005), 330–1; for performance-related pay as empowerment see ‘Työryhmä esittää aluekohtaisia palkkajoustoja’, Kauppalehti, 3 Dec. 1986; ‘STK käy hyökkäykseen byrokratiaa vastaan’, Kotimaa, 3 Feb. 1987; ‘Heikki Tuominen: Kannustepalkkaa pitäisi kokeilla kaupan piirissä’, Kauppalehti, 10 Feb.1987.

100 Finnish Law 688/1992.

101 Kokonmäki, Lasse, ‘Tärkeintä on viedä uudistus loppuun’, Hallinto, 4 (1995), 8–9.

102 Temmes, Markku and Kiviniemi, Markku, Suomen hallinnon muuttuminen (Helsinki: Edita, 1997), 39.

103 On public choice theory see Buchanan, James M., Theory of Public Choice. Political Applications of Economics (Michigan: The University of Michigan Press, 1972), 135–6; idem, Economics. Between Predictive Science and Moral Philosophy (College Station, Texas: AM University Press, 1987), 5–20, 71–5; idem and Musgrave, Robert, Public Finance and Public Choice (Cambridge MA: MIT Press, 2001), 111–2.

104 Kuntien valtionosuus-ja avustusjärjestelmän kehittäminen. I Järjestelmän yleiset perusteet KM 1976:24 (Helsinki: Valtion painatuskeskus, 1976), 10–1.

105 Hallituksen periaatepäätös hallituksen toimenpiteistä julkisten menojen kasvun hidastamiseksi, 20 Jan. 1989, Minutes of the government, Archive of the State Council, Helsinki; Suomen hallitus, Julkisen sektorin uudistaminen, 9–12.

106 By the original aim, I mean the autonomy of the municipalities. With regard to the criticism see Esko Aho, Hallinnon uudistamisesta 16 Feb. 1988, 4, H65:1, The Ministerial Committee of Improvement of Administration (HALKE), Archive of the Prime Minister's Office, Helsinki; Tiihonen, Paula, ‘Hajauttaminen hallitusmuodossa’, Hallinnon tutkimus, 1 (1987), 39.

107 The other major party in the government was the Coalition Party.

108 Suomen hallitus, Julkisen sektorin uudistaminen, 9–12; Ministry of Finance, Talouden näkymät ja talouspolitiikan linja vuoteen 1996 (Helsinki: Ministry of Finance, 1992), 69–72.

109 Social Democratic Party Council, meeting memo, 9 Mar. 1977, 14, ALM, Helsinki.

110 Isohookana-Asunmaa, Maalaisliitto-keskustan historia 5, 474.

111 Mannermaa, Kauko, Ohjailusta kilpailuun. Suomen hallitusten kasvu-ja rakennepolitiikka vuosina 1962–1999 (Helsinki: VATT, 2007), 10, 107.

112 Tiihonen, Seppo, ‘Poliittisen hallitsemisen ja julkisen hallinnon kehitys 1980–2003’, in Heiskala, Risto, ed., Artikkelikokoelma tutkimushankkeesta sosiaaliset innovaatiot, yhteiskunnan uudistumiskyky ja taloudellinen menestys (Helsinki: Sitra, 2004), 60–4, 80.

113 Tiihonen, Seppo, From Uniform Administration to Governance and Management of Diversity. Reforming State Functions and Public Management in Finland (Helsinki: Ministry of Finance, 2000), 4.

114 Timo Luhtala, ‘Suomi ja Ruotsi panostavat eniten T&K-toimintaan’, Tieto & trendit, 6 (2010).

115 Lemola, Tarmo, ‘Tiede- ja teknologiapolitiikan muotoutuminen’, in Tommila, P., ed., Suomen tieteen historia 4 (Helsinki: WSOY, 2002), 482; see also Särkikoski, Tuomo, Sitra – tulevaisuus tehtävänä (Helsinki: Edita, 2007), 269–80.

116 Kaukiainen, Yrjö, Pihkala, Erkki, Hoffman, Kai and Harmo, Matti, Sotakorvauksista vapaakauppaan (Helsinki: KTM, 1988), 284–8.

117 Lemola, ‘Tiede- ja teknologiapolitiikan muotoutuminen’, 482; see also Reinboth, Ritva, ‘Valtionosuudet supistuvat ensi vuosituhannelle saakka’, Hallinto, 4 (1995), 3–4.

118 See, for example, Meeting of the Social Democratic Party Council, appendix 443, Teollisuuspoliittinen työryhmä, Teollisuuspoliittinen muistio 22.10.1982, 2, Ca 94, The Archive of the Labour Movement, Helsinki; Koivisto, T., ‘Aluepolitiikan uudistus on välttämätön’, in Pakarinen, Pete and Varila, Kirsi, eds., Kokoomus? (Helsinki: Kansallinen sivistysliitto, 1993), 27.

119 Vartia, Pentti and Ylä-Anttila, Pekka, Kansantalous 2028 (Helsinki: Taloustieto, 2005), 236.

120 Kantola, Anu, ‘Kilpailukyky politiikan valtastrategiana’, in Kaisto, J. and Pyykkönen, M., eds., Hallintavalta. Sosiaalisen, politiikan ja talouden kysymyksiä (Helsinki: Gaudeamus, 2010), 103, 110–3.

121 Porter, Michael, The Competitive Advantage of Nations (New York: Free Press, 1990).

122 Särkikoski, Sitra – tulevaisuus tehtävänä, 246–54, 273–9.

123 In 1992 70 per cent of venture capital was public.

124 Särkikoski, Sitra – tulevaisuus tehtävänä, 291, 301.

125 Gray, John, False Dawn. The Delusions of Global Capitalism (London: Granta Books, 1998), 28; Gray, John, Endgames: questions in late modern political thought (Cambridge: Polity Press, 1997), 104–5, 113–4.

126 Peck, Constructions of Neoliberal Reason, 9–10, 15–21.

127 Arrighi, Giovanni, The Long Twentieth Century (London: Verso, 2009), 219–46.

128 Jensen, Lotte and Wanna, John, ‘Better guardians?’, in Wanna, John, Jensen, Lotte and de Vries, Jouke, eds., Controlling public expenditure: the changing roles of central budget agencies (Northampton: Edward Elgar, 2003), 251–5.

129 Roberts, The Logic of Discipline, 23–96, 140–6.

130 Mirowski, Phillp, Never let a serious crisis go to waste: how neoliberalism survived the financial meltdown (London: Verso, 2013), 84.