Norway

Despite lingering concerns related to the country’s dependence on oil and gas, Norway’s economic policies receive a high overall ranking (rank 8). Its score on this measure has declined by 0.8 points since 2014.

The country experienced a substantial decline in GDP in mid-2020, but bounced back robustly. The economy remains strong overall, with solid public finances. A long-term transition is underway aimed at reducing dependence on oil and gas revenues, and promoting a transition to green industries. High welfare costs remain a challenge over the long term.

Flexible labor-market policies have kept unemployment low and employment rates high, in large part due to women’s high participation rates. Low layoff costs for firms foster considerable labor mobility. Income and consumption taxes are high, though corporate rates are moderate. CO2 taxes are high and poised to rise further, while non-carbon-based transport receives subsidies.

Income in the national petroleum fund remains substantial, and is used to cover the public budget deficit. With the fund’s growth, Norway has shifted from being a petrostate to becoming an investor state. This has reduced the country’s exposure to oil price shifts, but increased its exposure to volatile financial markets. R&D spending targets are very ambitious.

With a wide-ranging social safety net, Norway takes the SGI 2022’s top rank (rank 1) with regard to social policies. Its score on this measure has improved by 0.1 point since 2014.

Education is free at all levels, and attainment is very high, though PISA scores are below average in some areas. Broad and generous social-insurance programs keep poverty rates very low, though the issue is gaining in political significance. Though the universally available health care system is of high quality, hospital consolidation has drawn protests in some local areas.

Generous family benefits and gender-equality programs enable a high employment rate for women. The pension system is based on a model that indexes benefits to wages earned during economically active years, and contains voluntary economic incentives to delay retirement.

Integration policy is well-organized and well-funded, but non-Western immigrants continue to experience higher unemployment rates and are paid less than native Norwegians. Local authorities are compensated economically by the state if they can attract immigrants to settle in their communities. Crime rates are quite low.

Boosted by the country’s strong focus on renewable-energy production, Norway’s environmental policies fall into the top ranks worldwide (rank 3). Its score on this measure has improved by 0.1 point relative to 2014.

The country has set an ambitious goal of being carbon-neutral by 2030. This will involve 1) the purchase of international emissions quotas, 2) reductions in emissions related to oil and gas production via use of renewable energies, 3) the development of carbon capture and storage technologies, and 4) a shift to renewable energies in the transport sector.

With strong hydroelectric and wind power sectors, Norway’s share of renewable-energy use is among the world’s highest. Air and water quality are very good. However, the country has a dismal record on waste management, and is internationally criticized for whale culling.

Taxes on oil are high and increasing. Subsidies have led to strong uptake of electric cars. The country has invested strongly in carbon-capture technologies, but positive results have been slow to emerge.

With strong outcomes in nearly every category, Norway falls into the top group worldwide (rank 3) with regard to the quality of democracy. Its score on this measure has declined by 0.2 points relative to 2014.

The country’s electoral processes are free and fair. Political party financing is mostly public, with strong reporting requirements. Political advertising is extensively regulated to ensure voters are aware of funders. The media are independent, showing considerable plurality of opinion, but digital media and particularly social media platforms are drawing audiences and advertising away from traditional media.

Civil rights and political liberties receive strong protections, and gender-equality provisions are robust, but the labor market remains strongly segregated by gender and occupation. Some labor market discrimination against immigrants persists, despite being illegal.

The legal system is transparent, predictable and respected. Corruption is rare, with considerable social stigma attached.

Reflecting a broadly consensual society, Norway’s scores for executive capacity are in the top ranks (rank 4) worldwide. Its score on this measure has declined by 0.2 points relative to 2014.

Careful strategic planning, with participation by experts, guides decision-making. The Ministry of Finance is a key actor in long-term planning, while the Office of the Prime Minister coordinates rather than evaluates policies, working closely with line ministries. Cabinet cohesion is strong, and the coalition-government tradition necessitates coordination among coalition members.

RIAs are frequently performed but not mandatory. Stakeholders are integrated in the legislative process, with societal consensus the goal, though increasingly compressed decision-making times can limit external influence. Governance is highly digitized. While implementation efficiency is generally good, a gradual decline in government effectiveness has been seen in some areas.

Government communication is normally well coordinated. Laws and regulations are applied in an unbiased manner. A recent scandal in the welfare sector exposed some weaknesses in the ability to apply EU policies correctly. The increase in geopolitical tensions is proving a challenge to Norwegian foreign policy, as it is becoming more difficult for small states to wield influence.

With a wide and effective range of oversight mechanisms, Norway takes the SGI 2022’s top position (rank 1) in terms of executive accountability. Its score in this area has improved by 0.2 points relative to 2014.

Parliamentarians have access to party-based support staff, and have broad executive oversight powers. Governments strongly respect the legislative right to access information. The audit and ombuds offices, both parliamentary bodies, act independently. The decades-old data-protection authority recently stopped use of a COVID-19 contact tracing app due to data-privacy concerns.

The population remains generally well-informed about policy, although traditional media organizations are finding it increasingly difficult to maintain staffing levels and produce high-quality content. Power and resources are shifting from the professionally edited media to new digital actors and unedited social media.

Political parties show considerable internal democracy. While membership rates are low, political parties remain strong organizations compared to counterparts elsewhere in Europe. Economic and other civil-society organizations are both sophisticated and influential.