Processes of municipal and regional reform are currently on the agendas of all Nordic countries. The need to find new modes of territorial responsibility, to cope with globalization to manage an ageing population and to provide for effective and efficient service provision while addressing the challenges of both regional competition and cohesion drive the process. The means by which these goals are pursued however differ markedly as witnessed by the emergence of varying national processes of structural reform.
The paradox of decentralization
In parallel with these pressures 'decentralization' has emerged as a policy antidote. Paradoxically however the most active "decentralizers" are those that already enjoy the highest degree of decentralization. Although the Nordic countries are already rather decentralized, it is clear that a significant level of
variation exists.
Territorial coherence
On 27 February 2007 the Swedish Committee for Public Sector Responsibility concluded that, for three reasons, fewer counties are necessary: (1) the state should be reconstructed to achieve a territorial rather than sectoral division of responsibilities; (2) the process of knowledge acquisition in health and medical services was to be better facilitated and restructured and (3) regional growth would be promoted by adapting regional borders to future local labour market regions. Each of these tasks entails the drawing up of a different map. Achieving territorial coherence thus remains a difficult task.
No one size fits all solution
While the similarity of shared pressures and experiences provides the context for reform such justifications only scratch the surface of the debate. In reality specific national discourses have emerged from endogenous not exogenous concerns and as such remain specific to each country. Finland focuses on regional competitiveness and growth-oriented aspects. Iceland is concerned with municipal amalgamation to create economies of scale. Denmark has focused on simplifying citizen access to public sector services and on the "marketisation" of the welfare state. In Norway focus remains on the unique nature of regional and local competencies, regional distribution and inter-sectoral integration. In Sweden the need for more knowledge-based and coherent governance structures and equality among the regions is stressed.
Regional policy - a non-issue in the reform processes?
The Danish process is distinct not only because of its speed but also because of the political commitment of the government. Indeed the Minister of the Interior was decisive in driving the reform through in a rather "non-Danish" manner.
In Norway structural reform implementation is largely a bottom-up process focussing on voluntary amalgamations driven by the counties and municipalities. Imbedded interests can however stymie the process with decisions not leading to action as a coherent pro-reform alliance does not exist while supporters of central government and sectoral interests remain both numerous and vociferous in their opposition. In Sweden and Denmark the process is driven by the central level even though the cumulative effect is to increase responsibility and participation at lower levels. In the Finnish case the original initiative for the reform was driven by the government though implementation has relied on bottom-up and local/sub-national processes. Only in Denmark and Norway is the issue of regional reform highly politicised.
In Iceland the regional question is effectively a non-issue while local governance and municipal mergers generate heated debate. Little has been achieved while the reasons for this are revealing. Referenda, thought to be the "democratic way" were more or less forced upon the municipalities, rather than being
initiated from below while the task portfolio the municipalities were to inherit after amalgamation was never specified. The future of municipal reform in Iceland thus remains uncertain.
Although interest in the territorial dimension of various policies is increasing, interest in regional development per se, is not. The regional level is simply not where the money is. At the same time a growing discrepancy is emerging between functional and administrative regions, potentially hampering such processes and making policy challenges such as transport, energy use and the ramifications of climate change more difficult to address.
Finland – regional reform the "Nokia way"?
The new Finnish model was, it is often argued, originally inspired by Nokia, which saw the traditional top-down regulative model replaced by 'network governance', even though 'networking' is facilitated through a top-down initiative. The national government plays the role of facilitating the interplay between the
different actors within regional development seeking to foster the conditions for more bottom-up initiatives to emerge. European policies, e.g. the Structural Funds may however be partly responsible for this change.
Norway – a need for crisis management?
In contrast to Finland where new solutions have emerged as responses to external threats and internal crisis it may, paradoxically, be the 'wealth' of the welfare state that is the problem in Norway. Despite numerous reports and proposals from the government on the need for regional reform, decisions remain to be followed by action. The reasons for this are numerous but are perhaps most often linked to the fact that the need for reform has, thus far at least, simply not been pressing enough. As such a coherent alliance of vested interests at the regional and local levels has not yet emerged while the supporters of sector interests have been able to mobilise significant opposition to the new proposals. Moreover, compared to Denmark, in Norway a clear process-owner or "manager" at the national level has simply not emerged.
Size does matter in Denmark - bigger is better?
The need to improve quality and effectiveness in the healthcare sector was the main Danish reform driver accompanied by the argument that "bigger is better". Easy access and transparency have also emerged here as governance-based ideals. Ensuring the quality of services remains a priority, but the tax level simply cannot be increased further: improved efficiency and "cutting red tape" remain at the core of the process.
The notion that "money follows the task" is not central to the Danish process. The newly instigated regional level has similar responsibilities, but no tax levying powers to implement them, although block grants from the centre and contributions from the municipalities remain. Regional development responsibility became something of a concession to the regions as the power associated with this issue is more symbolic than substantive: the share of the regional budget for regional develop-ment is 2-3% while the role of the regions remains that of "process consultant" or facilitator. Is the weak role given to regions then attributable to the underlying 'conspiracy theory' entertained by some, namely, that the politicians actually want the regions to fail, so that the project can be conveniently terminated in eight to twelve years time?
Lessons for the central level: A new role for the state?
What then is the role of the regions? Perhaps it is to aid the state in renewing the Nordic welfare systems? The regional level provides a natural arena for debate and economic activity by, for instance, facilitating new forms of network governance, positive dynamics and creative solutions. This 'model' however demands that a new role for the state is also crafted.
And the Swedish regions - what will happen to them?
The current Conservative government thinks that there should be no 'regions' at all. Swedish industry has however reacted positively to the regional proposals, reflecting an understanding within the Swedish business community that growth has a 'regional logic'. The first action to be taken here is the appointment of three 'promoters', with the regional map being settled in late spring 2008 and, in theory, the formal decisions being taken in December 2009. For constitutional reasons however, the issue could be delayed until after the next elections, i.e. in 2010, with the brand new Swedish regions
emerging by 2011.
By Kaisa Lähteenmäki-Smith, previous Senior Research Fellow at Nordregio and Lisa Van Well (right), Senior Research Fellow at Nordregio
Regions a là Sweden
The main point of the proposal from the Swedish Committee on Public Sector Responsibility was that the current regional level of 21 county councils should be replaced by 6 to 9 directly elected regions. These regions should have the former responsibilities of county councils (hospitals, health care, and public transport), as well as participating in the shared task of regional development and growth, including industrial and infrastructure development, administration of EU Structural Funds, culture, equal opportunities, environment, and public health. The previous state regional level (county administrative boards) will follow the same geography as the new regions, as will all other state authorities on the regional level. In order to improve effectiveness and efficiency, the interaction between the regional and state levels becomes essential. The Committee recommended that each region should include 1-2 million inhabitants (and not below 500,000), one regional hospital or institutionalised co-operation in the hospital sector, as well as one major university.
The new model could be implemented, at the earliest by 2010, after the next elections, requiring the rapid mobilisation of all of the levels involved. Central government is to support the process by employing three process managers to support the reform in the southern, northern and central parts of the country.