Bertelsmann Stiftung
Doi:
https://www.sgi-network.org/docs/2024/country/SGI2024_Norway.pdf
Norway is a consolidated multiparty democracy with a parliamentary
constitution, where the rule of law guarantees fundamental civil and political
rights. Policymaking is transparent, and corruption is minimal. Social and
economic interests are well organized within a robust civil society, represented
at the national level through media, political parties, and interest organizations.
A tax-financed welfare state provides universal health and welfare services
throughout the country, with social rights based on citizenship rather than
employment. This contributes to high labor market mobility and economic
modernization. Education, including university, is free, leading to a highly
educated population.
This favorable situation can be understood through three key factors:
First, there is a historical tradition of democratic politics as a problem-solving
enterprise, ensuring that all affected societal interests are heard. While political
parties are positioned along a left-to-right ideological spectrum, coalitions and
alliances can change, as coalition governments are necessary due to the
constitutional rule requiring a majority in parliament. This fosters a political
culture of pragmatic compromise.
Second, the state benefits from solid financial foundations, primarily through
taxes from petroleum extraction and increasingly from income generated by
the state’s petroleum fund’s global investments. Despite significant revenue
from oil, gas, and financial assets, high taxation on income and VAT has been
maintained. This strong fiscal position enables the state to address challenges
such as the COVID-19 pandemic and the influx of refugees from the war in
Ukraine without resorting to austerity measures.
Third, there is a high level of popular trust in the political system and a
tripartite regime for economic policymaking involving the state, labor, and
capital. Income distribution is relatively egalitarian, and policies promoting
equal opportunities and anti-discrimination have been fairly successful.
Norwegian politics also has a territorial dimension, balancing the interests of
the center and the periphery. The population of 5.4 million is spread over a
large area, with significant portions sparsely populated. There are 357 municipalities, half of which have fewer than 5,000 people. These
municipalities have their own democratic systems and are responsible for
providing education and welfare services according to national quality
standards and citizens’ rights. Tensions exist between local autonomy and
national objectives, paralleling a similar tension between a financially robust
central state and resource-constrained local authorities. Initiatives to merge
municipalities, regions, and hospitals into larger units typically encounter
strong local opposition.
The national governance system is fragmented. The government consists of 16
line ministries, each with defined sectoral responsibilities. The Ministry of
Finance coordinates public expenditures, but each ministry is responsible for
infrastructure investments, planning, research, and policy assessments within
its sector. Cross-sectoral policy challenges often lead to coordination issues
and weak implementation capacity at the national level. There is a significant
backlog of investments in physical, digital, and social infrastructure.
Consequently, while there are numerous good intentions and plans, there is no
effective institutional mechanism to implement national policy.
Norway is a strong promoter of international cooperation and legal regimes,
with a tradition of effectively incorporating such agreements into national
legislation. This is most explicit in European cooperation. Although Norway is
not an EU member, it is part of the European Economic Area and the
Schengen Agreement. Almost all EU legislation, with some exceptions in
agriculture and fisheries, is implemented into Norwegian law through effective
national procedures. When international commitments are less binding and
more aspirational, their incorporation into domestic law is less systematic and
often left to sectoral authorities. All new national legislation requires a
systematic assessment of EEA commitments, whereas the implementation of
the UN’s sustainability goals and climate commitments is more decentralized.
Overall, Norway’s democratic institutions, rule of law, social protection
system, and state finances are solid. On paper, this provides an excellent
foundation for a future-oriented reformed system of national governance.
However, because contemporary institutions have performed so well, there is
hesitancy to reform core features of the Norwegian government. In practice,
the drive for transformation to a sustainable society often becomes an elite
message from the center, with little appeal throughout the country.
