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Drawing Lessons from Pioneering Countries for Finland's Well-being Economy Steering Model

Ministry of Social Affairs and Health
Publication date 11.12.2023 13.00 | Published in English on 28.12.2023 at 14.56
Kuvassa panelistit

A project at the Finnish Institute for Health and Welfare (THL) is working on a proposal for a well-being economy steering model for Finland that would strengthen wellbeing-oriented policymaking in Finland. A workshop, organized by THL and the OECD WISE Centre on 21–22 November 2023, brought together officials from pioneering countries to discuss the functionality and application of governance practices for a well-being framework. Furthermore, the workshop provided insights for Finland to develop its own steering model.

A well-being economy approach aims to ensure a better balance between ecological, economic, and social sustainability in decision-making. It also aims to understand the reciprocal relationship between the sustainability dimensions. The goal is to secure the well-being of people and nature while considering the opportunities for sustainable well-being for future generations.  THL's project is developing a proposal with ministries and other key stakeholders on how to improve decision-making by more effectively acting on information related to a well-being economy.

Internationally, there are already many impressive examples of how well-being economy and a well-being lens are integrated into national decision-making. The workshop organized by THL and OECD WISE centre gathered government representatives from Sweden, Iceland, the Netherlands, Italy, Scotland, Wales, New Zealand, Canada, and Ireland to discuss practical experiences and potential development directions for national practices. The Finnish administration was represented by Ilpo Airio, Senior Specialist in the Strategy Department of the Prime Minister's Office, to hear international lessons and present national plans for promoting well-being.

"This is just about good policy making" was a phrase heard repeatedly during the workshop

Participants said the workshop helped them frame their own country's practices, and that the comparison with other countries helped them to see the strengths and weaknesses of their own approach. Countries have many commonalities and similar challenges with implementing their approaches. 

One of the topics of particular interest was how to maintain continuity as political landscapes change. Among the countries, there were many examples of parliamentary commitment to the principles of well-being economy. The steering model can be designed to allow for changes in political priorities while maintaining a continued focus on broad well-being and sustainability over the long term.

In addition to parliamentary support, steering models have also been embedded through more assertive means. For example, in Wales, legislation mandates public actors to focus their decision-making on prevention, long-term effects, and cross-government cooperation. In addition to defining ways of working, another approach has been to assign roles and responsibilities to different actors, ensuring that well-being information is channelled into decision-making.

In its simplest form, the well-being approach is in fact about following good decision-making practice - taking a holistic, far-reaching, long-term, evidence-based approach to policy issues, and integrating actors and objectives. Introducing a well-being economy perspective into governance processes can face resistance if its added value is not clear. At its best, a well-being economy perspective helps officials and decision-makers perform their tasks better and work more effectively in cross-ministerial co-operation.

One example of how a well-being approach has changed decision-making is by prioritizing consideration of long-term impacts of policies and decisions. In Wales, considering long-term impact is strongly supported by legislation and the Welsh Commissioner for Future Generations helps public actors (including the government) to consider the broader well-being impacts of their actions beyond a ten-year time horizon.

Well-being economy is part of the budget process in many countries

Well-being information is widely used at the national level in all steering areas, ranging from strategic to normative steering. In several countries, well-being information is integrated into resource steering and  the budget process. In Italy, the national statistical authority produces a monitoring and forecasting report on the development of equitable and sustainable well-being in the light of indicators as an annex to the Economic and Financial Document of the Ministry of Economy and Finance. This practice broadens the perspectives of the economic debate, and the timely production of information enables high-quality decision-making.

In Iceland, indicator data on social, ecological, and economic well-being is part of the annual five-year fiscal strategy. According to budget law, each minister is required to describe how policy measures in their area of responsibility contribute to the well-being priorities agreed for the government term. In New Zealand, the Public Finance Act requires governments to set annual well-being objectives and explain how the associated measures support well-being in the long term. The assessment covers the development prospects of financial, social, and natural capital resources.

In the workshop, integrating well-being information into the budget process was seen as a way to strengthen the steering effect of information. Simply informing about the past and future development of well-being does not generate well-being effects unless the information is designed to guide economic policy decisions.

Finland received tips from pioneers for the development of the steering model

All countries practicing a well-being approach have had individual starting points for developing their own steering models, and they have evolved at different rates. Hence, comparing them was initially challenging for workshop participants. In Finland, the task of preparing a national steering model proposal has been assigned to a research institute, and the work focuses on the importance of steering effect and on building the proposal on existing governance processes. This was considered a very reasonable approach by participating countries.

An often-repeated guideline was to consider what the steering model aims to correct and what its added value is: better coordination between ministerial projects, improving cost-effectiveness, bringing long-term sustainability-thinking into decision-making, or something else?

Another key lesson was to consider how the model could change and evolve in practice. Importantly, this needed to be considered during the design stage of the steering proposal. Planning for a phased roll-out and co-development of the model with potential implementers will help the model to become established in practice, serve its practitioners and work in an appropriate way to address well-being and sustainability problems. Learning from other countries' practices is important, but for the model to be successful it must be suitable for the national context and specificities of a given country.

A new Knowledge Exchange Platform to support the production and application of well-being information 

To support international knowledge exchange on well-being measurement and policy practice, the OECD WISE Centre launched the Knowledge Exchange Platform on Well-being Metrics and Policy Practice (KEP). The launch event was held in conjunction with the workshop, featuring speeches from representatives of funding countries and the Secretary-General of the OECD. Finland’s speech was delivered by Veli-Mikko Niemi, Permanent Secretary of the Ministry of Social Affairs and Health. The launch event concluded with a panel discussion on the challenges and achievements of implementing well-being policy practices and the opportunities for peer learning. THL’s research professor Heikki Hiilamo represented Finland in the expert panel, emphasising the importance of taking inequality and disadvantaged groups into account when developing a well-being economy.

As part of the KEP-platform, OECD WISE centre will be organizing Knowledge Exchange workshops in the future. These will aim to share experiences and solutions between countries on the development of well-being metrics and steering mechanisms as well as their policy application. As Finland takes its first steps toward developing a well-being economy model, it is worth utilizing the Knowledge Exchange Platform and using our voice to influence which issues should be addressed and prioritized in the KEP platform and accompanying workshops in the future.

Saija Iivonen, Researcher, Finnish Institute for Health and Welfare (THL)
Heikki Hiilamo, Research Professor, Finnish Institute for Health and Welfare (THL)
Satu Korhonen, Development Manager, Finnish Institute for Health and Welfare (THL)
Ilpo Airio, Senior Specialist, Prime Minister's Office 
Riikka Pellikka, Senior Specialist, Ministry of Social Affairs and Health 

THL’s project (2022–2024) is funded by the EU's Recovery and Resilience Facility (RRF) as part of Finland's Sustainable Growth Programme.

Read more:

THL's Well-being Economy project website
The Knowledge Exchange Platform on Well-being Metrics and Policy Practice (KEP) website
OECD Centre on Well-being, Inclusion, Sustainability and Equal Opportunity (WISE) website