Agrarian Party and Kela: Evolutionary Development of Finnish Social Policy

Kansaneläkelaitos (Kela) is a vital actor in the Finnish welfare state, established to administer the National Pension Act in 1937. The enactment of the Act was strongly influenced by the urban–rural social cleavage in Finnish politics. While the Social Democrats sought to protect the interests of wage workers, the Agrarian Party worked toward universal interests of all citizens. Through an interdependent relationship with the Agrarian Party, Kela expanded its operations to health insurance in the 1960s, and since the 1970s, various services have been transferred from the Ministry of Social Affairs and Health and municipalities to Kela, making the latter an institute of comprehensive basic security in Finland. However, the intentions of the Social Democrats have developed outside Kela, a genuine public scheme. Through conflicts and compromises, Finnish welfare systems such as pension and health insurance have been formed in a complex and unique way compared with other Nordic countries. This chapter will present the Finnish case of building the Nordic welfare state with the dominance of the Agrarian Party and Kela, which was founded under the influence of the party, and examine the nature of Finnish social policy through the perspective of those impacts.