Local Government in Finland

Author:Angel-Manuel Moreno

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1. Brief historical evolution

Local self-government and local democracy have a long tradition in Finland, which goes back to the late Middle Ages. General legislation on local government was first adopted in the 19th century, when separate laws on rural and urban municipalities (1865 and 1873) were enacted. The new laws made it possible to arrange the first municipal elections.

Finland gained independence from Russia in 1917. An express provision on municipal self-government was included in the first Constitution in 1919, when new comprehensive municipal laws were adopted for rural and urban areas. In all municipalities, the council must be elected in free and democratic elections. The municipal functions remained limited during the first half of the century.

With the evolution of the welfare society (1950-1980), most public services (health care, social benefits, basic education) were assigned or transferred to the municipalities. Consequently, they become a local extension of the State under ministerial tutelage. To counteract this development, an experiment was initiated in 1989 to re-empower municipal autonomy. State regulation and control of the municipalities were significantly reduced and the state subsidy system was reformed, which included the introduction of non-earmarked block grants.

The current Municipal Act (1995) continued this decentralisation trend by allowing more municipal diversity and conferring wider powers to the municipalities to manage their functions and administrative structures independently. New market-oriented techniques have become more common in managing municipal functions that include outsourcing of services, Public-Private Partnership arrangements and the introduction of more managerial models in municipal administration.

Maintaining the financial basis of municipal services and meeting the challenges to the municipal economy are two important current issues. An ambi-

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tious project has been launched to overhaul the municipal administration by vitalizing self-government, strengthening the sustainability of municipal economy, expanding local democracy and reforming the structure of municipal administration.

2. Basic facts and figures

Finland is a bilingual (Finnish and Swedish) republic, with a population of
5.4 million and an area of 337,000 sq. kilometres. The combined population of the capital city, Helsinki, and neighbouring areas is one million residents. Municipalities have a predominant role in providing public services, and are an essential element of the Nordic welfare society.

The basic unit of local government is the municipality ([c4e][c58][c51][c57][c44][c0f][c03][c4e][c52][c50][c50][c58][c51]). There are presently 336 municipalities, of which 108 are cities ([c4e][c44][c58][c53][c58][c51][c4e][c4c][c0f][c03][c56][c57][c44][c47]) and the rest are regular or ordinary municipalities. The municipalities are uniform in that they enjoy the same legal status, bear the same responsibilities, exercise equal authority, and have the same kind of democratic and executive bodies. Despite this, there are differences such as the number of residents, the economic base, the geographic location, size and the level of employment. An average municipality has 16,000 residents. One third of the country’s population lives in the eight Finnish municipalities (cities) with over 100,000 residents. The capital city, Helsinki, has no special constitutional or legal status in domestic legislation, and there is no legal procedure to designate the capital of the country. The capital city’s status is regulated by the Municipal Law as one of the municipalities. Although there are no specific provisions concerning the capital, it is generally recognized that framework legislation is necessary to govern an area of this type.

Inter-municipal cooperation plays an important role in the provision of public services. The «joint municipal authority» ([c4e][c58][c51][c57][c44][c5c][c4b][c57][c5c][c50][c6c][c0f][c03][c56][c44][c50][c4e][c52][c50][c50][c58][c51]) constitutes the basic form of cooperation between municipalities, and Finland’s 184 joint municipal authorities also form the second tier of municipal government.

On the other hand, there are also 19 «provinces» ([c50][c44][c44][c4e][c58][c51][c57][c44][c0f][c03] [c4f][c44][c51][c47][c56][c4e][c44][c53]), which are are formed by municipalities. Therefore, provincial self-government is constituted «from the bottom up», and provinces rely heavily on municipalities. Provinces have limited functions as regional development and planning authorities and promoters of regional interests, except for the province of Åland that was granted special status and wide autonomy including legislative powers, by the Constitution.

The state administration also has offices at the regional and local levels. At the regional level there are Regional State Offices (aluehallintovirasto, region-[c49][c7c][c55][c59][c44][c4f][c57][c51][c4c][c51][c4a][c56][c59][c48][c55][c4e][c48][c57]) and several other regional state agencies. The local state administration consists of police, prosecutor’s offices, registry offices and tax authorities.

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3. Legal framework of local self-government
3.1. The role of the European Charter of Local Self-Government

Finland signed the Charter on June 14, 1990, with no reservations or limitations. On the basis of a government bill, the Parliament passed an Act on the adoption of certain provisions of the European Charter of Local Self-Government, in 1991. This general incorporation Act contains only two brief provisions: Section 1 states, «insofar as the provisions of the Charter fall within the scope of leg islation, they are in force as has been agreed»; Section 2 dictates that the act will enter into effect by a government decree. Consequently, the act became effective on 10 October 1991, following the decree of 6 September 1991.

The actual text of the Charter was published separately. No specific legislation was required to vest it with legal force. Since the Charter was incorporated by an ordinary Act of Parliament, its provisions have the same rank as ordinary laws, and are directly applicable by courts and administrative authorities. In the preamble to the bill, the relationship between each of the articles of the Charter and relevant national legisla
tion was examined, and the conclusion was that Finnish legislation contained no provisions that would conflict with the Charter, so no laws had to be amended. The only reason why the Charter was allowed to regulate areas pertaining to national legislation was that the Act on the Autonomy of the Åland Province had already given exclusive power to the legislature of the autonomous province of Åland to regulate its municipal administration.

In actual judicial practice, however, the provisions of the Charter may be too imprecise and vague to have direct legal effect, or to be the sole basis for a judgment in an individual case. It is more likely that the role of the provisions would be to serve as legal principles to inform and influence the interpretation and application of domestic statutes. Moreover, there was little public debate on the rights and obligations when the Charter was incorporated, which was due mainly to the opinion that it would add nothing substantively new to the existing legal system.

3.2. Domestic constitutional framework

Municipal autonomy is expressly recognized in Section 121(1) of the Constitution (1999). Accordingly, Finland is divided into municipalities, «whose administration shall be based on the self-government of their residents.»1The

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Constitution also specifically guarantees municipalities the right to levy municipal tax. Provisions on the general principles governing municipal administration and the duties of the municipalities are laid down by law. New functions or duties may be entrusted to the municipalities only on the basis of a specific provision in an act of Parliament.

According to the established practice of the Constitutional Law Committee of Parliament2, the following features are considered fundamental characteristics of municipal self-government:

(a) The municipality has the right to take charge of its administration and finances independently. State authorities have no general power to control municipalities or to issue binding directives or administrative orders that may affect them. State authorities may intervene only to a limited extent as specifically provided by law enacted by Parliament.

(b) Municipal decision-making powers are held by the bodies elected by direct and secret ballot in municipal elections. The municipality may delegate these powers within the municipal organisation and for the purpose of inter-municipal cooperation.

(c) Municipal...

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