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Musings, The Finland Chapter

Finland’s Basic Income Experiment “Failed”, But It’s A Success In Policymaking

It seems paradoxical to characterise Finland’s universal basic income experiment as a success in policymaking, especially after global news outlets rushed to pronounce its failure. In fact, the experiment was scheduled – from the start – to conclude at the end of 2018, and it is also not ending because of “failure”: Kela, the country’s national welfare body, “has refused to publish any results until it is finished, for privacy reasons and to avoid biasing outcomes”. In this vein, with the initial hypothesis that a basic income would “promote employment” and the implementation of a two-year trial to test this hypothesis with 2,000 unemployed Finns, the more precise “failure” is the government’s decision to reject extra funding, even before the pilot has run its full course, and its findings, studied.

Notwithstanding the premature termination, the endeavour has been successful for three reasons. First, this iterative, evidence-based approach to policymaking eschews the conventional assumption that the government necessarily knows best, and instead embraces experimentation and innovation. And the empirical findings also challenge the I-say-you-say narrative of whether basic income – or any policy, in general – is positive or negative. By gathering data from participants who receive 560 euros per month (S$895) per month, the researchers can find out whether (and how) employment statuses have changed, if they have taken up job training or started endeavours of their own, and the extent to which their well-being may have improved. Additional surveys or interviews would yield findings about attitudes and motivations too, and furthermore the research findings could inform the reform of the Finnish social security system.

And by situating Finland’s experiment within a wider field of research around the world – with ongoing basic-income experiments in Canada, Kenya, the Netherlands, and the United States (though none in Asia yet) – its second success is a better understanding of welfare programmes in different cultural and socio-economic contexts. One might consider the basic income as part of a broader policy debate between conditional and unconditional cash transfers, or whether government money or aid should be transferred to those in need only if those in need fulfil a set of criteria. With an emphasis on resilience as well as personal and family responsibility in Singapore, for instance, a “Many Helping Hands” approach means that welfare programmes such as Workfare are contingent on fulfilment of some criteria.

Which is why Finland’s trial needs to be contextualised. “The New York Times” proffered an explanation for the perceived redundancy of basic income in a country which already has a generous safety net: “Healthcare is furnished by the state. University education is free. Jobless people draw generous unemployment benefits and have access to some of the most effective training programmes on earth”.

Finally, these questions about research findings and context are not posed in a vacuum. Societies ought to have discussions about the plight of the unemployed and of the low-income, before collective decisions on preferred policies and their trade-offs, and Finland’s basic income experiment has encouraged conversations about the benefits and the costs of a basic income policy. In 2016, having read a working paper published by Kela, I wrote that while 69 per cent of sampled Finns were in favour of basic income, high-income earners in particular were more critical “when they were told the tax rates needed to finance basic income”. How would that pan out in other countries, including Singapore? Policies – like research questions – are not designed or implemented in a vacuum, and evidence helps.

Implications of the endeavours, in other words, go beyond that of the basic income and welfare programmes. And with the growing popularity of research and data-driven outcomes, an iterative, evidence-based approach to policymaking should continue to gain traction.

About guanyinmiao

A man of knowledge lives by acting, not by thinking about acting. Carlos Castaneda.

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