Understanding policy change: Financial and fiscal bureaucracy in the Baltic Sea Region

Project facts

Project promoter:
Tallinn University of Technology
Project Number:
EE06-0011
Target groups
Researchers or scientists
Status:
Completed
Initial project cost:
€265,000
Final project cost:
€261,645
From Norway Grants:
€ 223,707
The project is carried out in:
Estonia

Description

The project proposes to research financial and fiscal bureaucracy engaged in the supervision of the financial sector and managing and auditing government’s own finances (including the central banks, the ministries of finance, the ministries of economic affairs) of the Baltic Sea region as a case study to understand how policy ideas and their implementation are intertwined. From theoretical perspective the project aims to juxtapose and synthesize the insights of cultural political economy, discursive institutionalism and varieties of capitalism and to outline an analytical framework for understanding the evolution and impact of fiscal and financial bureaucracy. University of Oslo will be leading the project from the Norwegian side and contribute to building the theoretical framework and outlining the empirical strategy for the comparative case studies. Hedmark University College will contribute to theoretical frameworks developed within the project and gather empirical data on the Norwegian case. The theoretical and empirical papers will be joint efforts between the Estonian and Norwegian team members.

Summary of project results

One of the most crucial challenges faced by social scientists is understanding and explaining changes in policies: why certain policy ideas and practices become dominant and persist over others. While there is a large body of research devoted to these issues, this project aims to emphasise the role of micro-level routines within public sector bureaucracy and organisations - an area largely left untouched by existing research. Much of research and debate concentrates on political, policy and institutional issues, leaving the organisational and bureaucratic level almost unexplored. Financial and fiscal bureaucracies (ministries of finance, financial supervisory authorities, central banks) have grown, at least over the last two or three decades, into the focal points of economic governance in many countries. The project focuses on the cases of five countries in the Baltic-Nordic region: Estonia, Latvia, Lithuania, Sweden, and Norway. In EU member states, both financial and fiscal governance are affected by the increasing harmonisation of respective regulations (and supervision). Such influences, however, often collide with the institutional patterns that have evolved in EEA countries over decades, thereby challenging policy makers to provide an effective response to the process of ‘Europeanisation’. Among country-cases studied in the project, various responses to the processes of ‘Europeanisation’ have been identified: from the adoption of financial regulations ahead of the development of financial instruments that would be subject to the very same EU regulation, to perceiving the need to loosen certain regulatory requirements as compared to existing local standards; from the ‘professionalization’ of policy advice following increasing interaction with the EU bodies to outright criticism of imposed rules. In addition, specific attention was paid to the historical legacies of bureaucratic practices in the five countries viewed. Besides purely scientific outcomes and outputs the project offers policy-related lessons for the fiscal and financial policy communities, especially in the Baltic-Nordic countries but not only. The results of these empirical studies can be used for re-assessment of administrative procedures of bureaucracies in charge of financial and fiscal policies in order to better understand how bureaucratic practices, and, in turn, policy capacities, evolve.

Summary of bilateral results

The Norwegian research team contributed significantly to the project by being directly involved in data collection in the Nordic countries, by taking the lead in developing a historical-comparative framework for the country-cases studied (longer-term perspective on varieties of capitalism in Nordic and Baltic countries; historical perspective on economic bureaucracies in Nordic and Baltic countries), and by helping build a conceptual framework based on cases. Therefore the input of Norwegian research team has been instrumental in extending the synthesis of institutional political economy and varieties of capitalism approaches towards longer-term, historical analysis. This has been essential to the general purpose of the research project: to look at evolution of institutional trajectories and bureaucratic practices without attempt to generalize but rather to look at differing patterns. An emphasis on macro-level comparative historical approach is particularly relevant to the country-cases studied in the project due to substantial differences in their political and socio-economic history. By conceptualizing the discussion of bureaucratic practices in public sector organizations, research teams significantly contributed to the advancement of comparative-historical analysis, of evolutionary approach to national public administration (bureaucracies), and of academic multi-disciplinarity in general. Bilateral relations have been steady and constructive, characterized by responsiveness and continuous communication between research teams, benefited from three joint two-day intensive workshops (2014 and 2016 in Tallinn; 2015 in Oslo) and established a solid base for future research collaboration, which is also reflected in the amount of papers currently being written. The Norwegian team has also emphasized the relevance of empirical data collected during the project to their current research interests, which adds to the plans for future collaboration.