by Will Wachtmeister | Dec 18, 2015 | News
Finland is putting basic income on the map and has attracted worldwide media attention by spearheading plans for the world’s largest basic income pilot.
Over the past month, the planned Finnish experiment has fascinated such a large number of readers and news outlets that – perhaps inevitably – many aspects of what is happening in the Nordic country have been misconstrued or exaggerated.
At the same time, most reports have overlooked the underlying reason why Finland is able to even contemplate a basic income experiment at such a comprehensive scale.
During the past year, Finland has been exploring possibilities to reform policymaking, with the aim of moving from a speculative approach to one that is experimental and evidence-based. This allows the government to systematically test new policies, such as a basic income, before introducing them on a larger scale.
Finland’s approach exemplifies a completely new way of doing politics, based on scientific research on how people react to new policies and policy changes. This policymaking approach is expected to spread to other countries, potentially bringing basic income experiments with it.
Why Finland?
Anyone trying to figure out why Finland has taken the lead needs to take into account that the new policymaking approach gives governments the knowledge and confidence to engage in large-scale experimentation. This is exactly what Finland is now doing with basic income, along with other policies.
Future designs: Students participate in a hands-on course in Design for Government at the Finnish Prime Minister’s Office. (Picture: Demos Helsinki)
Demos Helsinki, a Nordic think tank, is behind the experimental policymaking approach that is paving the way for the Finnish basic income experiment, among other research initiatives. Working with Aalto University and fellow think tank Avanto Helsinki, Demos Helsinki developed the Design for Government model, having been commissioned by the Prime Minister’s Office who wanted an “agile, human-centric and evidence-based” factor underpinning experiments and behavioral approaches.
The European Commission and the OECD have recently issued recommendations to their respective member states to use behavioral insights in their policymaking processes. This reflects a widely recognized need for innovative policymaking processes that are more efficient and allow policies to be tested before implementation.
This is why, according to Demos Helsinki, Finland’s basic income experiment is “only the tip of the iceberg” of a major paradigm shift that could well spread across borders.
A step further
While other countries like the UK and Denmark have taken tentative steps towards experimental governance, Finland has gone all the way. “It’s bizarre that the rest of our society works with testing, prototyping and then scaling, but not governance. It makes politics very theoretical, slow and reliant on guesses as opposed to evidence,” says Demos Helsinki researcher Mikko Annala, who was part of the team that produced the Design for Government model.
Taking it a step further: Demos Helsinki researcher Mikko Annala. (Picture: Demos Helsinki)
Annala mentions the UK’s Nudge unit and Denmark’s Mindlab as significant examples of this new type of experimental government innovation. “But,” he says, “we wanted to take this a step further, with large experiments and scaling up to the policy level.”
As a result, the Finnish Design for Government initiative is much more ambitious and comprehensive than any other projects in experimental governance. It is founded on the careful study of the effects of policy changes and the accumulation of a mass of knowledge and models. This will allow policymakers to make bold changes, because their effects will have been properly tested and modeled beforehand. At the same time, the experimental approach will make it easier to fine-tune new policies in response to feedback.
“What the typical government innovation units lack is a feedback loop to policy,” Annala explains. “That is different with the Design for Government initiative. Now the experiments are designed to scale from the start.”
Design for Government
This political direction was set by the Finnish Prime Minister’s Office. Wanting to explore the opportunities offered by behavioral science, the government commissioned a consortium to carry out the Design for Government project, under the leadership of Demos Helsinki.
The Prime Minister’s Office is now setting up an experimentation office to oversee the experiments and scaling. In addition to the basic income experiment, Finland’s ministries are testing other innovative initiatives — such as over a hundred planned or on-going mobility experiments across the country. Eventually, the Ministry of Traffic and Communications aims to “turn Finland into one giant Mobility Laboratory”. Additionally, of more direct relevance to the basic income project, Demos Helsinki is also investigating ways to transform to the funding mechanisms for the experiments themselves. Finally, Finland is sponsoring a project to create advanced communication platforms for experiments so that information, know-how and practices are more easily and more quickly shared.
Radical and fast
“There are clear reasons for Finland to change its governance this radically and this fast,” says Annala. He says the motivations for the change are both “qualitative and quantitative”.
“The need for experimental governance has been recognized in many nations,” he says. “One reason for this is the simple fact that the world is changing faster than ever: for example digitalization, immigration, aging populations and such phenomena bring up situations which we have never encountered before. In these situations it’s almost impossible to plan, and it’s better to experiment.”
The UK’s Nudge initiative has shown that experimental governance can unlock real potential and that there is every reason to take them to a larger scale, he says. “Many [Finnish] ministries are exploring the possibilities of doing large scale experiments and the Prime Minister’s Office is building structures for supporting the experimental culture. On this scale, the basic income experiment is one single experiment among many. Yet it is an intriguing one, of course.”
Annala points out that the Finnish basic income experiment has been misunderstood in some quarters.
Referring to articles in The BBC, Forbes, The Independent, Mashable, The Telegraph, Time and Quartz, among others, Annala also says that “none of the articles uncover the reason why Finland can pull off such ambitious policies in an age where so many government are left powerless with even smallest of changes in the way society works.”
He adds that Finland has taken a promising course, which could spread to other countries in the future. “If steered well, it can turn Finland into the world’s first country with truly experimental governance.”
FURTHER READING:
Demos Helsinki “Design for Government” Demos Helsinki website, accessed 14 December 2015
Vito Laterza, “FINLAND: Basic income experiment – what we know” Basic Income News, 9 December 2015
Mark Easton, “How politicians learned the power of the gentle nudge” BBC News, 22 July 2015
by Tyler Prochazka | Dec 13, 2015 | News
Amid the many dramatic headlines about Finland’s Basic Income, Dylan Matthews breaks down the history and elements of the plan, which he describes as “the most methodologically rigorous and comprehensive test of basic income to date,” in a recent Vox article.
After taking office last May, Finland’s center-right Prime Minister Juha Sipilä began pushing for a basic income trial. The currently planned experiment, which will be conducted by a team off experts from think tanks, universities and other research centers, will begin in 2017 and end two years later.
According Olli Kangas, director of research at Kela, the Finnish Social Insurance Institution, which is tasked by the government with presenting proposals for testing the basic income, Finland has several potential models for testing a basic income: a full basic income, a partial basic income, and a progressive negative income tax, in addition to miscellaneous other approaches, such as monetary incentives for desirable behavior. For the full context of these proposals click here.
It is possible that the trial will include both a nationwide random sample, with participants selected in a lottery, and the selection of districts in which all households will receive a basic income. The former approach will allow researchers to observe effects across demographics, while the latter will provide evidence of the effect of a basic income on an entire community.
Dylan Matthews, “Finland’s hugely exciting experiment in basic income, explained”, Vox, December 8, 2015.
by Guest Contributor | Dec 11, 2015 | Opinion
By Otto Lehto
People have different ideas on what society should look like, but they can still agree that a Basic Income Guarantee (BIG) is a good idea. The struggle for BIG should be the struggle for a specific policy measure, not for a utopian ideal. We are trying to make BIG a reality. That’s it. We are engaged in an ambitious project with limited boundaries. We are not trying to find a panacea for world hunger, domestic abuse or global warming. All we need is for a critical mass of people, and a few shrewd politicians, to do the right thing and vote for BIG.
In Finland, nearly 70% of the population supports basic income. For the first time ever, more than half of members of parliament do too. Historically, BIG has been advocated in Finland by the Green Party, the Left Alliance and the Center Party, joined recently by the Pirate Party. Advocates are found in all political parties and across all sectors of society. The Finnish National Union of University Students has officially endorsed a universal basic income, and so have many academics and think tanks. Post and neo-Keynesians are calling for it, as are leftist intellectuals. Even the banker Björn Wahlroos repeatedly endorsed BIG on newspapers and TV shows. He is one of the richest men in the country and a free market enthusiast.
We need a broad consensus if we want basic income to become reality. As recently reported in mainstream news across the world, a basic income experiment is about to be implemented, under the new center-right government headed by Prime Minister Juha Sipilä from the Center Party. The experiment is set to begin in 2017. Hopefully, this is just the prelude to a nation-wide implementation of a universal basic income.
There is nothing wrong in being utopian and in favor of radical solutions. But utopianism is not a necessary condition for engaging in the struggle for BIG. Sometimes it can be a hindrance. As basic income supporters, we may disagree on how high a basic income should be. We may have different views on whether to use the tax system, as in the case of a negative income tax, or social welfare instruments, as with most other forms of BIG. We may see basic income as a socialist principle or a free market mechanism. But we all acknowledge the need for a universal, unconditional and simple solution. We do not have to agree on anything else. We believe that BIG is important, because it does three things:
1) it eradicates absolute poverty;
2) it reduces bureaucracy;
3) it lays the foundation for a new, sustainable relationship between states and markets.
In order to achieve this, we need to build alliances between utopians and realists of different persuasions. At BIEN-Finland, our national branch, we are confronted every day with the various political leanings and aspirations of our members. Our diversity is something we celebrate, even if sometimes it causes friction and animosity. A one-sided approach to basic income would seriously hurt the prospects of BIG becoming a reality.
We should learn from popular struggles that have rallied mass support, such as the campaign for extending the right to vote to women in the late 19th and early 20th century. Universal suffrage was advocated by various classes and social groups. Driven by the same goal, farmers and workers marched together. Women were joined by their husbands. Newspapers representing different interests endorsed the idea. After some time, opposition to it was frowned upon. It was not the exclusive battle of Marxists, or trade unionists, or social liberals, or enlightened aristocrats. It was a struggle owned by the whole population. From a marginal idea, universal suffrage became common sense. The opposition did not disappear overnight. But it gradually lost steam, until it became a remnant of the past, deprived of any real power. BIG will succeed when it will achieve the same broad consensus. Our goal is to make opposition to BIG unfashionable and a little reprehensible.
The danger is not that the “wrong people” like the idea. Rather, the problem is that some people want to appropriate the name to implement different policies. If a proposed basic income is not high enough to cover basic human necessities, like food, shelter and clothing, then it cannot be called basic income. BIG should also not be confused with means-tested grants or workfare schemes. We need to be clear about this. In Finland, the government’s position oscillates between a real basic income and austerity or workfare policies, but public pressure and intellectual debate are creating a space for a BIG experiment.
A universal basic income should gain the support of Marxists, trade unionists, neoliberals, businessmen, teachers, farmers, feminists, tech nerds, American billionaires and Nigerian chicken farmers. The alliance must be broad and deep, and focus on common human needs. The emerging domain of populist politics, increased media attention and the growing intellectual debate around BIG, provide an unprecedented opportunity to further our cause.
Of course, we should not kid ourselves that humanity would finally overcome its differences under the guise of a BIG campaign, nor that left-wing and right-wing interpretations would lead to the same result. BIG organizations should be democratic forums for people from different backgrounds. Some of them are naturally inspired by a variety of utopian visions. Broad-based BIG has the potential to act as a true meeting ground for popular struggle, in which conflicting visions of the good society can strategically talk to each other and put forward a shared, simple solution. People should be able to set aside their differences – at least for a short while.
We may not like all our friends in the movement. Some of our allies are horrible people. (By the way, they probably think the same about you.) But we still have to live together in the same house. If people can, for the time being, agree on basic income, then we have already won. Bickering partisans can still keep on fighting over other issues. Trust me, there will always be something to fight about.
So bite your nails and be wise about strategy. Smile to your enemies. Shake hands with the most awful people. The smiling basic income activist is a silent, deadly assassin. If we want to think BIG, we need to act stealthily. We do not have the luxury to choose our political allies.
Otto Lehto is a philosopher and a political activist. He is the chairman of BIEN Finland.
by Vito Laterza | Dec 9, 2015 | News
In the last week, the basic income experiment in Finland has gone viral, making headlines around the world, from UK-based Telegraph to Russia Today. Not all the reports however were correct. Here is what we know.
Update March 2016: KELA has published its recommendations – see a summary here.
Some articles mistakenly gave the impression that the Finnish government has already made plans to introduce a nation-wide basic income. As we reported before here and here, for now the government has committed to implement a basic income experiment. KELA, the Finnish government agency in charge of welfare benefits, rectified the misperception on Tuesday.
In a previous statement released on November 19, KELA provided additional information about the experiment. It highlighted four objectives behind the program. It aims to find feasible options for an overhaul of the social security system in response to labor market changes. Some of these trends include the growth of temporary contracts and freelance work that is not covered by the current work-based benefits structure. The experiment will also explore how to make the system more effective in terms of providing incentives for work, and avoiding the poverty trap – benefit recipients are discouraged from taking up employment, if the additional income received from a job is only marginally higher than means-tested benefits. Another goal is to reduce bureaucracy and simplify complex and costly procedures for administering benefits.
The experiment will be carried out in a context marked by three years of economic downturn, which has led to rising unemployment and pressures on public spending. The current center-right government took office after general elections in April this year, and is carrying out a wide-ranging program of cuts that will affect education, health and welfare provisions.
A working group has been created with the task of providing a preliminary study that will lead to the actual experiment. The study will identify a model for basic income to be tested. The experiment will evaluate the effects of giving a basic income to members of different population groups, and produce an overall cost estimate.
The preliminary study is a collaboration between Kela’s Research Department, the Universities of Helsinki, Tampere, Turku and Eastern Finland, the Sitra Innovation Fund, the think tank Tänk, and the VATT Institute for Economic Research. Kela’s research director Professor Olli Kangas is the project’s head. The study is already under way. A decision by government on the details of the basic income experiment is expected in the second half of next year. The experiment is scheduled to start in 2017.
The American news website Vox published a PowerPoint presentation by Kangas that highlights some of the issues currently under discussion in the working group. BIEN-Finland President Otto Lehto stresses that this should be read as a general indication, rather than an official position of government or the working group.
The government has set aside 20 million euros for two years for the experiment. There are several options that the working group will consider. The first is a full basic income, where the amount paid to participants would be high enough to replace “almost all insurance-based benefits”, hence a significant monthly sum. As in other European welfare states, Finland has an insurance system where workers receive their unemployment and pension benefits from sector-specific funds. These are usually higher than the basic benefits administered to welfare beneficiaries regardless of their occupational status. The figure of 800 euros per month circulated by many news outlets is to be read as a possibility under this option, rather than anything set in stone.
The second option is a partial basic income that would replace basic benefits, but leave intact almost all existing insurance-based benefits. The presentation notes that, in this case, the monthly sum should not be lower than the existing level of basic benefits, which is around 550 euros per month. The same figure was reported in several media without the appropriate context.
A third option is that of a negative income tax, where income transfers are made through the taxation system. Other models might also be considered, including the option of a participation income given to unemployed people as an incentive to seek additional income – this alternative is discussed by Kangas himself and Jan Otto Andersson in a 2002 paper.
The size of the sample and the geographical areas covered are other key topics to be addressed. According to Kela, the next step will be the delivery of a review of available evidence from universal basic income models tested in other countries, which will be presented to government in spring 2016. In a recent survey carried out by Kela, nearly 70% of respondents support the idea of a universal basic income, and most of them think it should be set at around 1000 euros per month.
Here is a list of relevant sources for more information:
Kela, “Universal basic income options to be weighed,” November 19, 2015.
Kela, “Contrary to reports, basic income study still at preliminary stage,” December 8, 2015.
Kela, “Experimental study on a universal basic income.”
Olli Kangas, “Experimenting basic income in Finland,” presentation, December 8, 2015.
Liam Upton, “Finland: New government commits to a basic income experiment,” Basic Income News, June 16, 2015.
Stanislas Jourdan, “Finland: Government forms research team to design basic income pilots,” Basic Income News, October 15, 2015.
“Kela to prepare basic income proposal,” Yle, October 31, 2015.
Ben Schiller, “How Finland’s exciting basic income experiment will work – and what we can learn from it,” Fast Company, December 7, 2015.
Dylan Matthews, “Finland’s hugely exciting experiment in basic income, explained,” Vox, December 8, 2015.
Jan Otto Andersson and Olli Kangas, “Popular support for basic income in Sweden and Finland,” Conference paper presented at the 9th BIEN Congress, 2002.
by Will Wachtmeister | Dec 3, 2015 | News
Finnish politics commentator and French basic income pioneer Alain Lefebvre writes an in-depth article detailing Finland’s plans for a national UBI.
Alain Lefebvre
The central government in Helsinki has called on experts to put forward different implementation schemes that are consistent with the Finnish Constitution by March 2016, in order to make a final choice by November 2016 and then launch a nationwide pilot in 2017.
Lefebvre offers a range of insights into the Finnish initiative, which at present is placing more emphasis on cutting red tape and marginal tax rates for lower incomes, as opposed to ending poverty as such.
Alain Lefebvre, “Basic income: How Finland Plans to Implement The First Nationwide Project in the EU,” Finland Politics, 5 November 2015
