Foreign Capital and Finland : Central government's first period of reliance on international financial markets, 1862-1938

The main objective of the study is to evaluate the Finnish central government s foreign borrowing between the years 1862 and 1938. Most of this period was characterised by deep capital market integration that bears resemblance to the liberal world financial order at the turn of the millennium. The main aim is to analyse the credit risk associated with the state and its determination by evaluating the world financial market centres perception of Finland. By doing this, the study is also expected to provide an additional dimension to Finland s political and economic history by incorporating into the research the assessments of international capital markets regarding Finland during a period that witnessed profound political and economic changes in Finnish society. The evaluation of the credit risk mainly relies on exchange-rate risk free time series of the state s foreign bonds. They have been collected from quotations in the stock exchanges in Helsinki, Hamburg, Paris and London. In addition, it investigates Finland s exposure to short-term debt and Moody s credit ratings assigned to Finland. The study emphasises the importance of the political risk. It suggests that the hey-day of the state s reliance on foreign capital markets took place during last few decades of the 19th century when Finland enjoyed a wide autonomy in the Russian Empire and prudently managed its economy, highlighted in Finland s adherence to the international gold standard. Political confrontations in Finland and, in particular, in Russia and the turbulence of the world financial system prevented the return of this beneficial position again. Through its issuance of foreign bonds the state was able to import substantial amounts of foreign capital, which was sorely needed to foster economic development in Finland. Moreover, the study argues that the state s presence in the western capital markets not only had economic benefits, but it also increased the international awareness of Finland s distinct and separate status in the Russian Empire and later underlined its position as an independent republic.

Reinventing Nordic Openness : Transparency and State Information in Finland

The study explores new ideational changes in the information strategy of the Finnish state between 1998 and 2007, after a juncture in Finnish governing in the early 1990s. The study scrutinizes the economic reframing of institutional openness in Finland that comes with significant and often unintended institutional consequences of transparency. Most notably, the constitutional principle of publicity (julkisuusperiaate), a Nordic institutional peculiarity allowing public access to state information, is now becoming an instrument of economic performance and accountability through results. Finland has a long institutional history in the publicity of government information, acknowledged by law since 1951. Nevertheless, access to government information became a policy concern in the mid-1990s, involving a historical narrative of openness as a Nordic tradition of Finnish governing Nordic openness (pohjoismainen avoimuus). International interest in transparency of governance has also marked an opening for institutional re-descriptions in Nordic context. The essential added value, or contradictory term, that transparency has on the Finnish conceptualisation of governing is the innovation that public acts of governing can be economically efficient. This is most apparent in the new attempts at providing standardised information on government and expressing it in numbers. In Finland, the publicity of government information has been a concept of democratic connotations, but new internationally diffusing ideas of performance and national economic competitiveness are discussed under the notion of transparency and its peer concepts openness and public (sector) information, which are also newcomers to Finnish vocabulary of governing. The above concepts often conflict with one another, paving the way to unintended consequences for the reforms conducted in their name. Moreover, the study argues that the policy concerns over openness and public sector information are linked to the new drive for transparency. Drawing on theories of new institutionalism, political economy, and conceptual history, the study argues for a reinvention of Nordic openness in two senses. First, in referring to institutional history, the policy discourse of Nordic openness discovers an administrative tradition in response to new dilemmas of public governance. Moreover, this normatively appealing discourse also legitimizes the new ideational changes. Second, a former mechanism of democratic accountability is being reframed with market and performance ideas, mostly originating from the sphere of transnational governance and governance indices. Mobilizing different research techniques and data (public documents of the Finnish government and international organizations, some 30 interviews of Finnish civil servants, and statistical time series), the study asks how the above ideational changes have been possible, pointing to the importance of nationalistically appealing historical narratives and normative concepts of governing. Concerning institutional developments, the study analyses the ideational changes in central steering mechanisms (political, normative and financial steering) and the introduction of budget transparency and performance management in two cases: census data (Population Register Centre) and foreign political information (Ministry for Foreign Affairs). The new policy domain of governance indices is also explored as a type of transparency. The study further asks what institutional transformations are to be observed in the above cases and in the accountability system. The study concludes that while the information rights of citizens have been reinforced and recalibrated during the period under scrutiny, there has also been a conversion of institutional practices towards economic performance. As the discourse of Nordic openness has been rather unquestioned, the new internationally circulating ideas of transparency and the knowledge economy have entered this discourse without public notice. Since the mid 1990s, state registry data has been perceived as an exploitable economic resource in Finland and in the EU public sector information. This is a parallel development to the new drive for budget transparency in organisations as vital to the state as the Population Register Centre, which has led to marketization of census data in Finland, an international exceptionality. In the Finnish Ministry for Foreign Affairs, the post-Cold War rhetorical shift from secrecy to performance-driven openness marked a conversion in institutional practices that now see information services with high regards. But this has not necessarily led to the increased publicity of foreign political information. In this context, openness is also defined as sharing information with select actors, as a trust based non-public activity, deemed necessary amid the global economic competition. Regarding accountability system, deliberation and performance now overlap, making it increasingly difficult to identify to whom and for what the public administration is accountable. These evolving institutional practices are characterised by unintended consequences and paradoxes. History is a paradoxical component in the above institutional change, as long-term institutional developments now justify short-term reforms.

Encouragement and discouragement : Essays on taxation and government expenditure

This thesis consists of an introduction to a topic of optimal use of taxes and government expenditure and three chapters analysing these themes more in depth. Chapter 2 analyses to what extent a given amount of subsidies affects the labour supply of parents. Municipal supplement to the Finnish home care allowance provides exogenous variation to labour supply decision of a parent. This kind of subsidy that is tied to staying at home instead of working is found to have fairly large effect on labour supply decisions of parents. Chapter 3 studies theoretically when it is optimal to provide publicly private goods. In the set up of the model government sets income taxes optimally and provides a private good, if it is beneficial to do so. The analysis results in an optimal provision rule according to which the good should be provided when it lowers the participation threshold into labour force. Chapter 4 investigates what happened to prices and demand when hairdressers value added tax was cut in Finland from 22 per cent to 8 per cent. The pass-through to prices was about half of the full pass-through and no clear indication of increased demand for the services or better employment situation in the sector is found.