Hyvä Veli (Finland)

From Global Informality Project
Jump to: navigation, search
Hyvä Veli
Location: Finland
Finland map.png
Author: Besnik Shala
Affiliation: University College London

Original text by Besnik Shala

The Finnish term Hyvä Veli, which in English translates as ‘Dear Brothers’, is believed to have gained common usage and popularity during President Urho Kekkonen’s Presidency (1956-1982) as he habitually addressed his network of political friends with these words. More recently the term has became associated with corruption and favouritism arrangements in the business world and in public tenders in Finland.

Unlike the UK or USA, where ‘Old Boy’ networks (see this volume) exist based on being a member of the alumni of a prestigious school or college, Finland is a country with low social inequalities and does not have ‘elite’ universities. The quality of education is high and it is free of charge, therefore Hyvä Veli networks are not directly analogous with ‘Old Boy’ networks. Hyvä Veli networks are characterised as a phenomenon that occurs in a large number of diverse social circles. It is possible for Hyvä Veli networks to be established within many environments and groups; examples include Hyvä Veli networks within rotary groups, associations, ‘niche’ sports clubs, business networks, religious groups, minorities and the military.

The military and specifically the Reserve Officer School (ROS) is acknowledged to be amongst the most common environments for creating strong interpersonal ties of Hyvä Veli networks (Sutela, 2016[1]), attracting as they do, only the most motivated and best candidates for military leadership training (Finnish Defense Forces, 2014[2]). After graduation the candidates meet annually for training purposes, and some continue to do so for decades (Sutela, 2016[3]). Generally, ROS graduates have excellent leadership skills, and traditionally the majority of the candidates go on to have successful careers. Unsurprisingly, continued networking amongst the group is inevitable.

Likewise, members of minority groups in Finland, such as the Jews, Tatars, Catholics and Mormons are found to have particularly strong links with their communities, therefore Hyvä Veli networks are to be expected within them and are enduring. This is also true within sporting groups, particularly within niche sports such as sailing, golfing, and skiing, which also serve as an opportunity to meet similar minded people and create strong interpersonal ties. Many big corporations organise seasonal sports weekends to bring employees together in completely new environments. Such events are designed to enable employees to have access to management in totally relaxed conditions, which contributes to better relations and strengthens interpersonal ties. The possibility of establishing Hyvä Veli networks can occur anywhere and it is not limited to above mentioned scenarios - rather it is a matter of individuals’ social skills, personality and chemistry with others.

In 2012, Former Prime Minister of Finland Esko Aho (1991-1995), who also acted as a Senior Executive at Nokia, stated that ‘Hyvä Veli networks are good for a small country such as Finland. These networks can consist of hunters, labourers, farmers and business leaders sitting around the same campfire and talking with each other about various issues’ (Helsingin Sanomat 2012[4]). Research shows that in a small country, such as Finland, strong interpersonal ties are to be expected, therefore for the most part, favours are not even considered a form of corruption – they are systemic (Isaksson 2009). However, defining the exact boundary between healthy and corrupt networks is not always easy.

The strength of Hyvä Veli ties depends on the level of interaction between the actors (see Granovetter, 1973, 2005[5]). The most typical characteristics of these interpersonal ties are: gratitude, loyalty, reciprocity, friendship and protection of ‘the members’ (see Salminen & Mäntysalo, (2012)[6]). These ties hold with the appointment of friends to positions (cronyism), preferential treatment (favouritism), favouring relatives (nepotism), and abuse of government resources (kleptocracy), as well as political or professional protection (Salminen and Mäntysalo, 2012[7]; Peurala and Muttilainen, 2015[8]). While Hyvä Veli networks may be considered unethical, it should be noted that from a legal perspective they are not necessarily illegal (Salminen and Mäntysalo, 2013[9]).

Corruption is not considered to be a major threat in Finland (see Salminen, 2010[10], 2015; Peurala, 2011). Based on Transparency International’s Corruption Perception Index (CPI), Finland has for many years been ranked amongst the least corrupt countries in the world. In 2015, it ranked as the 2nd least corrupt country in the world out of the 168 countries scrutinised (Transparency International 2015). The Special Eurobarometer on Corruption (European Commission, 2013[11]) also positions Finland amongst the least corrupt countries in the European Union. The majority of EU citizens (76 per cent) believe that forms of corruption are common in their country, but only 36 per cent of Finns think the same about their country. However, based on the same report, 35 per cent of Finnish respondents agree that corruption and favouritism are part of their business culture (European Commission, 2013[12]).

Salminen (2015), describing the different aspects of corruption and corruption control systems in Finland, states that the main weakness of the CPI measurement is that it does not address the problem of Hyvä Veli networks because it does not include the particularities of corruption.

Despite the low corruption perception level (CPI corruption ranking), Finland has been noted by the OECD (Organisation for Economic Co-operation and Development) Working Group on Bribery as needing to do more to counter foreign bribery in high-risk sectors of state-owned enterprises. Bribery occurs mainly in foreign markets where Finnish companies may be pressured to act according to local culture and violate OECD conventions. Based on OECD reports (2006[13]), bribery in overseas markets has been the subject of media attention, with some investigations reaching Finnish courts. For instance, according to Finnish broadcaster Yle, in 2015, a court found the Finnish arms company Patria and two of its executives guilty of charges relating to foreign corruption (Yle, 2015[14]).

Further concerns were also raised with regard to the financing of political parties, due to funding disputes during election campaigns. In a report from 2009, the Ministry of Justice of Finland considered Hyvä-Veli networks as a problem at national level, especially in municipal government, which it found to be particularly susceptible due to its small size. It found that at municipal level strong ties were likely to develop between public decision-makers and the private sector (Joutsen and Keränen, 2009). The Ministry of Justice of stated that there is reason to believe that ‘favours are exchanged among insiders in government and businesses on the basis of informal relationships’ i.e. Hyvä-Veli networks.

A study conducted in 2010 (Salminen 2010[15]) measured the perception of Finnish citizens to corruption in general, as well as to the occurrence of Hyvä Veli arrangements in Finland. This large national citizens’ survey (N=5000) found that corruption in Finland in general was low. However, violations relating to Hyvä Veli networks, such as nepotism, close relationships in business and administration were highlighted as problems in the survey. Hyvä Veli network and other forms of favouritism were perceived by Finns to be of greater concern than widespread corruption in the politico-administrative system (Salminen, 2010[16]; Peurala and Muttilainen, 2015[17]). These networks, like other forms of corruption in general, are difficult to spot by competent authorities even though they are part of everyday life, because they are considered normative.

Although Hyvä Veli networks have been recognised as harmful to the Finnish society and economy by scholars, the government, and the EU, there is no evidence of its impact in monetary value or value ‘in kind’. Literature on the issue is also very limited. Finnish investigative media has been active in recent time and has identified numerous deals characterised by favouritism and brought them to the attention of the public (Salminen and Mäntysalo, 2013[18]). Nevertheless, a study by Tuominen (2012)[19] on the local media of the Tampere region of Finland showed that there was evidence of constant external and internal attempts to influence the content of publications when there was a perceived threat of ‘Hyvä Veli arrangements being made public. The study found that some Editors were members of Hyvä Veli networks, and therefore were compromised by having strong interpersonal ties with other group members (Tuominen, 2012[20]), which prejudiced their ability to report proceedings openly and without bias. Hyvä Veli networks are generally dominated by men, as is the case in ‘Old Boy’ networks in the UK, as well as Amukudari networks in Japan. This may change in the future as a result of the appointment of an increasing number of women to managerial positions, as well as the establishment of rival ‘female networks’. Hyvä Veli networks are unlikely to disappear from Finnish society anytime soon, however public awareness is increasing regarding the potential negative effects of such networks.

Notes

  1. Sutela, P. (2016). Hyvä Veli Networks. In-Person Interview by Ledeneva A., London. Swedish School of Economy and Business Administration.
  2. Finnish Defense Forces, (2014). Finnish military fosters future leaders. [Online]. Available at: http://finland.fi/life-society/finnish-military-fosters-future-leaders/ [Accessed: 1 May 2016].
  3. Sutela, P. (2016). Hyvä Veli Networks. In-Person Interview by Ledeneva A., London. Swedish School of Economy and Business Administration.
  4. Helsingin Sanomat (2012). Esko Aho Protects hyvä veli -networks. [Online]. Available at: http://www.hs.fi/kotimaa/a1345260273825 [Accessed: 30 April 2016].
  5. Granovetter, M. (1973). The Strength of Weak Ties. Amer. J. of Sociology, Vol. 78, Issue 6, May 1360-80.
  6. Salminen, A., & Mäntysalo, V. (2012). Old-boys’ networks and administrative corruption case of external election finance in Finland. Presented at the European Group of Public Administration Annual Conference in Bergen. Study Group: Ethics and Integrity of Governance, September 5.9, 11 pages.
  7. Salminen, A., & Mäntysalo, V. (2012). Old-boys’ networks and administrative corruption case of external election finance in Finland. Presented at the European Group of Public Administration Annual Conference in Bergen. Study Group: Ethics and Integrity of Governance, September 5.9, 11 pages.
  8. Peurala, J. and Muttilainen, V. (2015). Korruption Riskikohteet 2010-luvun Suomessa. Tampere: Poliisiammattikorkeakoulun Raporteja, 115.
  9. Salminen, A. and Mäntysalo, V. (2013). Epäeettisestä Tuomittavaan: korruptio ja hyvä veli -verkostot Suomessa. Vaasan Yliopiston Julkaisuja Selvityksiä ja Raportteja. Vol. 182.
  10. Salminen, A. (Ed.). (2010). Ethical governance: A citizen perspective. Vaasa: Research Papers
  11. European Commission, (2013). Special Eurobarometer 397. Corruption. [online] Brussels: European Commission. Available at: http://ec.europa.eu/public_opinion/archives/ebs/ebs_397_en.pdf [Accessed 26 May 2016].
  12. European Commission, (2013). Special Eurobarometer 397. Corruption. [online] Brussels: European Commission. Available at: http://ec.europa.eu/public_opinion/archives/ebs/ebs_397_en.pdf [Accessed 26 May 2016].
  13. OECD (2006). Follow-Up Report on the Implementation of the Phase 2 Recommendations on the Application of the Convention and the 1997 Recommendation on Combating bribery of Foreign Public Officials in International Business Transactions. Paris: Directorate for Financial and Enterprise Affairs, pp. 3-4.
  14. Yle, (2015). Patria executives found guilty of bribing Croatian officials. [online] Available at: http://yle.fi/uutiset/patria_executives_found_guilty_of_bribing_croatian_officials/7809283 [Accessed 26 Jul. 2016].
  15. Salminen, A. (Ed.). (2010). Ethical governance: A citizen perspective. Vaasa: Research Papers
  16. Salminen, A. (Ed.). (2010). Ethical governance: A citizen perspective. Vaasa: Research Papers
  17. Peurala, J. and Muttilainen, V. (2015). Korruption Riskikohteet 2010-luvun Suomessa. Tampere: Poliisiammattikorkeakoulun Raporteja, 115.
  18. Salminen, A. and Mäntysalo, V. (2013). Epäeettisestä Tuomittavaan: korruptio ja hyvä veli -verkostot Suomessa. Vaasan Yliopiston Julkaisuja Selvityksiä ja Raportteja. Vol. 182.
  19. Tuominen, T. (2012). Tokihan Tää Suomi on Hyvä Veli-maa Vielä. Paikallislehtien päätoimittajien näkemyksiä lehteen kohdistuvista vaikutusyrityksistä.. Tampereen Yliopisto
  20. Tuominen, T. (2012). Tokihan Tää Suomi on Hyvä Veli-maa Vielä. Paikallislehtien päätoimittajien näkemyksiä lehteen kohdistuvista vaikutusyrityksistä.. Tampereen Yliopisto