Austerity and sustainability: ‘common-sense' neoliberalism in a Finnish city

Abstract

The 2008 financial crisis and the subsequent austerity measures were harsh on cities. Despite receiving little academic attention, in progressive Nordic countries, such as Finland, cities faced fiscal stress and implemented austerity. As a solution to cities’ budget deficits, austerity became a widely accepted ‘common-sense' policy. During this time, the seemingly contradictory sustainability policies increased support. This article analyses how austerity and sustainability, narrated as common-sense solutions, changed the urban development policy in Tampere. The narrative analysis identifies a significant change in urban policy that occurred during the recession. At first, an ‘austerity for efficiency' narrative argued that urban development and sustainability must meet the budget and service provision should be economically efficient. During the recession, a ‘green growth' narrative began to assert that growth investments in sustainable city development could be financed with debt, while service provision must meet fiscal austerity. The city’s political elite made narrative arguments to justify downsizing the public sector while at the same time using sustainability to justify debt investments in urban development, enabling private investments. Despite containing contradictory elements, the ‘common-sense' neoliberalism of the Finnish city is to boost sustainable city development and gradually shrink the welfare state.