Designing policies for a wellbeing economy — learnings from Finland

Finland, recognized as the happiest country in the world for 4 years in a row, has been one of the international frontrunners in promoting a wellbeing economy. After years of active engagement with the topic on the international stage, Finland is designing a governance model based on wellbeing economy principles — like access to affordable housing or a sense of safety. 

As we facilitate this process, we have learnt a lot. We now open up these learnings, not only to facilitate the discussion domestically but also to support similar efforts internationally.

What we’ve learnt so far: 

• In the process of designing a new governance model, the benefits of the wellbeing economy were well understood—both for developing operations and fulfilling the government’s objectives.
• The concept of wellbeing tends to be used in vague and abstractly positive ways in public discussion. 
• Wellbeing should be discussed and operationalized with the same rigour and clarity as conventional economic concerns in policy discussions, requiring a multidimensional conception and metrics that mirror this. 
• The holistic thinking necessary for a wellbeing economy causes some tension, as it requires traditionally influential departments to collaborate between them and with others. 
• The wellbeing economy is sometimes seen as a competitor, hindrance or replacement to established economic goals.
• If the wellbeing economy does not offer concrete policy alternatives and choices to policymakers, its adoption as a policy tool will be challenging. 
• The economy of wellbeing should be politically unaffiliated.
• The indicator toolkit developed in Finland is seen to influence decisions indirectly, by making central aspects of wellbeing visible and enabling prioritization between goals. 

 

By Kari Jalonen and Satu Korhonen

Making our economies work for our wellbeing 

The recurring and escalating crises of recent decades — from financial (slow or no growth) to social (inequality), political (polarization), ecological (biodiversity and climate breakdown), and now health crises — have exposed the need for a more holistic approach. The pandemic has offered an opportunity to meet this disruption with a people-centric roadmap for sustainable progress. It is in this setting that the neoliberal economic paradigm has started to falter. At the very least, GDP needs to be complemented by other metrics of success. This is where a wellbeing economy can start to materialize.

The wellbeing economy complements the goals of public policy and public-sector organizations (traditionally measured by neoliberal economic tools and a focus on public services) with an increased emphasis on the wellbeing of citizens and communities. It does so through enriching the information available for decision-makers with a social and ecological perspective, thus supporting holistic assessment and encouraging cross-sectoral collaboration. As a result, the inherent cross-functional nature of a wellbeing economy challenges the traditional silos in public policy and surfaces underlying tensions in the public sector. Below we discuss the main tensions that emerged during the development of the Finnish governance model, and the promising avenues of the wellbeing economy to mitigate these tensions.

 

Identified tensions from the Finnish case

1: Holistic approach VS. silos

Wellbeing could serve as a people-centric “umbrella goal” through which the Finnish government can evaluate and prioritise policies — including economic policy.

According to the experts we worked with in the national and local government, the benefits of a wellbeing economy were well understood—both for developing operations and fulfilling the government’s objectives. A practical challenge lies in how different public-sector departments are organized and siloed, without incentives to collaborate—which is precisely what the wellbeing economy demands. Additionally, abstract and broad definitions of wellbeing can lead to unavoidable differences in its operationalization. Wellbeing means one thing in the ministry of education and another in the management of a rural health centre. 

Government departments and specialized units are thus called to commit to the goals of a wellbeing economy, but without the necessary capabilities or shared direction to do so. One way around this is to ensure the methodical translation of wellbeing goals into everyday work. Moreover, developing new collaborative capabilities and introducing new expertise should serve as essential ingredients to build a governance model that can support a wellbeing economy.

 

2: Wellbeing economy VS. economy as we know it

Our expert interactions illustrate that there is a risk that the wellbeing economy is seen as a competitor or replacement to traditional economic goals. Indeed, clarifying the links between the economy as we know it and wellbeing is often especially challenging. In practice, wellbeing economy projects and metrics end up presenting wellbeing-related goals as dependent on economic performance. 

Perhaps an important contribution to the public discourse is that the wellbeing economy can complement GDP as a central measure of societal development—not replace it (this point was developed in a recent report by Norden). It simply addresses the need to assess economic development and growth with other metrics and indicators that analyze the effects of the economy on wellbeing—whether individual or societal. For the wellbeing economy community, this requires a multidimensional conception of wellbeing and metrics that mirror this. 

 

3. Defining VS. embracing wellbeing

The concept of wellbeing tends to be used in vague and abstractly positive ways in public discussion. This creates a risk that wellbeing becomes a formless virtue that is impossible to oppose. Who could be against people feeling well? 

If wellbeing remains abstract and undefined, the Finnish participants voiced that it becomes a difficult comparative or instructive tool. They recommended that wellbeing be discussed and operationalized with the same rigour and clarity as traditional economic concerns in policy discussions. Clarity and tangible measures for wellbeing could both enable clear-headed comparison with traditional economic goals and more directly inform decision making.

Our Finnish experts described this problem as the lack of alternative policy choices or priorities resulting from a goal of improving abstract ‘wellbeing’ goals. If the wellbeing economy does not offer such concrete alternatives and choices to policymakers, it can hardly be called a useful policymaking tool. “The stone becomes too round to lift”, as one expert put it.

 

Addressing the tensions bottom-up

Acknowledging the conceptual richness of wellbeing is instrumental to its development as an integrative tool for decision making. A strict top-down definition of wellbeing into a list of measures or assigning ownership of it to a specific department would strip the perspective of its ability to integrate public discussion and decision making around a naturally versatile goal. The goal of improving the wellbeing of citizens is by necessity a political one: different people and political groups see it in different ways, and emphasize some aspects over others. Wellbeing should not become an instrument owned by some group presenting itself as its sole advocate.

Many of the public servants involved emphasized that the wellbeing economy should be “ideologically neutral”: it should make visible relationships between the economy and the wellbeing of citizens and thus help decision-makers assess the implications of their work. There is still room for improvement in the inclusion of relevant stakeholders (including citizens or civil society) in the model development. This has also been recognised in cases like Italy or Wales. Ideally, the design process of an economic model of wellbeing would include participation from all levels of administration, as well as citizen participation when appropriate. 

 

Momentum for shared action

The indicator toolkit developed in Finland is seen to influence decisions indirectly, by making central aspects of wellbeing visible and enabling prioritization between goals. However, the task of developing a successful model is challenging: it calls for new practices and approaches across government. Nevertheless, our contributors agreed that keeping a high level of ambition is positive and that there is momentum for this discussion.

We are convinced that the tensions presented above are not limitations of the wellbeing economy. Instead, we hope that these learnings help us build bridges between people and perspectives. At the very least, we hope they generate shared pockets of action, until our “economies are managed by the people, and not the other way around”.  

 

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This account is based on workshops and analysis performed in the project “Social security indicators in the welfare economy — a governance model for decision-making and monitoring”, funded by the Finnish Prime Minister’s Office. The project is led by Demos Helsinki, in cooperation with the Finnish Federation for Social Affairs and Health (SOSTE) and the Finnish Institute for Health and Welfare (THL). Additional information from Senior Consultant Satu Korhonen can be found here.

Finland is undergoing a thorough reform of its social security system. The goal is to create a coordinated system for supporting citizens and fitting together work and social security under changing circumstances. As part of this work, Demos Helsinki is involved in the design of a wellbeing economy governance model, to make visible the wellbeing effects of policies and decisions. Rather similar governance models and indicator toolkits have been adopted e.g. in Italy, the Netherlands, Scotland, New Zealand and Wales, and the discussion on their importance in and outside the public sector runs hot.

 

Feature Image is from Matt Mitchell, our colleague who happens to be a great photographer and tree enthusiast. Taken in a thriving Finnish forest.