The annual Track & Field dual meet between Finland and Sweden (Finnkampen in Swedish) can possibly be an explanation as to why Finnish T&F is no longer competitive on a world basis. It is a big thing in sports in both countries - a T&F field meet with generally ho-hum athletes that fills big stadia for 2 days straight in late summer. In Sweden, national TV devotes at least 5 hours coverage - straight, without ads - of each day.
[Finland has won eight of the last ten on the men's side, and Sweden all ten on the women's side, but the competitions are close. In 2011, 206-194 among the men and 225-182 among women.]
How can that be bad for Finnish T&F at the Olympics?
How you count means a lot - La Griffe has pointed out that by making tests either insanely hard or laughably simple, it is possible to minimize the race gap in school tests. Similar Principle.
The way that is used to calculate which country wins the competition is really good at doing what it is intended to to - be simple to understand to the casual fan, make all results count, provide human interest stories that the journalists can gobble up, and provide excitement.
Here is how it works: All events in the entire T&F olympic program (except decathlon & heptathlon) are contested during the two days. Each country fields 3 athletes in every event. The winner of an event gets 7 points, the #2 gets 5 points, and so on with 4,3,2, and 1 point for last. Athletes that fail to produce a valid result or a disqualified get 0 points. There are no bonus points for anything - nothing extra for national or world records, nothing.
American high school and college dual meets are typically scored 5 points for first place, 3 for second, and 1 for third, which isn't hugely different, but does mean it's better for the team to have the winner than the second and third place finishers.
Both countries field competitors that are completely team-loyal - there are no primadonnas that put their own race times before the best of the country.
The 7,5,4,3,2,1 points system ensures that all results count, and this makes makes for stories. Since all fans have booklets with all contestants names and Personal Best results, and the emcee really works the crowd, everybody is fascinated by not just who wins, but by who rises to the occasion and does better than expected.
So, it helps to have a lot of nerds in your country who like their spectator sports with large dollops of arithmetic. Electoral Vote forecaster Nate Silver of the 538 blog would love this meet. I would too.
Every year, there is some athlete who was expected to end up last, but managed to beat one guy on the other team, thus giving his team an unexpected point. Since so many of the points are easy to guess beforehand - in many events, the winner is someone who gets invited to bigger meets in Europe, and is head&shoulders over the the rest in both teams - the overall win is often decided on the marginal athletes. These are athletes that struggle to get bronzes in the national championships, and never get sent to International championships. Suddenly, they get thrust onto a field with 40000 wildly cheering fans, who will roar the names of everyone in the right jersey. Every year, some of those marginals rise to the challenge, and push their team over the magic 231 points.
Imagine 40 thousand people roaring SAILER! SAILER! SAILER! while you are completely winded, and trying to overtake some guy who is just marginally better than you with 100 meters left of the 10000 meter race - would you be able to wring out that last ounce of power from your aching muscles?
Then, when the two days are over, the entire team - over a hundred strong - takes a victory lap, and throw their head coach into the water pit of the steeplechase. The marginals who managed to nab a unexpected point become media darlings for a few days, and those are they guys who are used to being no-names outside their club, and they are often no-names in their local Podunk also. Suddenly, Podunk News has a new hometown hero to write about. Journalists love such stories. Imagine a 3rd-string Rhode Island GOP politician who, by lots of campaingning, manages to get 3 votes in the electoral college for the GOP, thereby reaching 271 votes total.
So, there are approaching 100 men and 100 women representing each year their small countries of five million (Finland) and nine million (Sweden), so, that must mean that most people in the country are within a couple of degrees of separation of somebody working out to make the national team: my aunt's best friend's grandson is a definite contender to represent the homeland in the steeplechase.
Since the event is so important for both federations (both for money and attracting new kids to the sport) they really work to win it, and that means reacting to the dictates of the points system. (This is like teaching to the test!) In order the win this event, there is no marginal utility for the Finnish federation in improving a promising young guy who reliably can beat all three Swedes, but is not a major player on the international scene, to something better. Time, money, and effort is much better spent on improving the national also-rans so that your weakest guy can reliably beat their weakest guy, and possibly beat their #2 if everything comes together and the gods are smiling.
However, what is strategically sensible WRT improving winning probablity in the annual mealticket meet is not a good recipe for maximising Olympic medal count. The great majority of those who compete in the annual meet are not going to amount to anything on the Olympic level - personal best results show that at a glance. Yet, money&resources get shunted from the top-10 who would be possible Olympic contestants to a whole pile of inherently weaker athletes.
To contend for Olympic gold in track, it makes sense to hire Africans to move to your country, the way Portugal won a silver medal in the men's 100 meter dash awhile ago with a Nigerian sprinter, or rich, sedentary Persian Gulf oil states buy Kenyan distance runners. But if hiring a foreign superstar just discourages your native talent from bothering, it can backfire in this kind of competition where it's important to have a whole bunch of regular guy athletes train hard in the hopes not of becoming the new Bruce Jenner and never having to get a real job, but of representing their country in front of thousands of cheering fans once or twice in their lives.
That is probably a significant part of the explanation for why Finnish T&F has retreated on the international scene, together with the emergence of the East-African runners at distances of 800 meters and up.