Norway Matters
I recently decided to learn Norwegian because I have been increasingly interested in Norway as a nation. Below are some interesting facts about Norway you may (or may not) already know, why I believe Norway has the potential to be a strong(er) presence on the global stage in the years to come, and what I believe the United States can learn from Norway.
Government Structure
Norway is a constitutional monarchy, which means they have a monarchy, but the country is really run by a parliament. Countries run by parliaments do not share many of the shortfalls currently curtailing America’s democracy. One example is how, since the parliament chooses the prime minister, the prime minister is always in agreement with the majority of the parliament, and, by extension, the majority of the people. This makes decision making smoother and more efficient. Another benefit of a parliamentary system is the lack of a senate. While many view the American senate as a necessary chamber to provide checks to power and to allow less densely populated states to have a voice in the federal government, it could be argued that the American senate in its current form is an extra layer of bureaucracy preventing a truly representative democracy.
Government Pension Fund of Norway
Norway’s success is not due entirely to its parliamentary system. Norway also got lucky, as a lot of oil has been found off the coast of Norway. Typically this is not a good thing for the stability of a country (look at the Middle East or Venezuela) but Norway took advantage of its luck in just the right way. Instead of giving its citizens tax cuts and other temporary benefits, the government decided to invest the money. Crucially, Norway did not invest any of this newfound money in other oil-related industries, nor did Norway invest any of its oil-related money into Norway in any capacity. While not investing this money back into the Norwegian economy might seem like a dumb move, this deliberate decision to diversify increased the stability of the fund, which has grown steadily throughout its twenty-plus years of existence.
Although the current economic crisis threatens the fund, the worst possible scenario is far better than it would have been if the fund had not been diversified. Because of its long-term growth, Norway’s sovereign wealth fund is now the largest in the world, and three times larger than the entire economy of Norway. The Norwegian government only allows itself to spend 3% of the fund per year (they have never spent close to this limit), which ensures that the fund continues to grow and allows the government to spend a lot of money on social services.
Trust in Government
Another factor in Norway’s success is the people’s trust in their government. Because the Norwegian government has proven to help the citizens of Norway, Norwegians are more likely to trust their government. Because the people trust the government, they are accepting of higher taxes, which they know will ultimately be spent to make their lives better across many dimensions. Contrary to popular belief, the Norwegian people’s trust in their government does not exist because Norway is a homogenous country. In fact, 24.51% of the country was not born to two Norwegian parents and immigration accounts for the majority of Norway’s recent population growth. The trust in the Norwegian government exists because Norway (and to be fair, the other Nordic countries) have truly served their people by investing a lot of its GDP back into social services. Even though the Norwegian people pay more in taxes, they can clearly see how that money is being spent to enrich their lives. This leads to everyone in the country being cared for, which, in turn, helps the economy and reduces violence caused by poverty.
Lessons Learned
While there are certain elements of Norway’s government and landscape the United States cannot emulate, such as Norway’s parliamentary system or the fact that most of Norway is literally rising above sea level, there are still many lessons to be learned from Norway. The United States has plenty of economic resources, and yet our resources are not managed as carefully as Norway’s resources. Norway’s successful social services are proof that if you put in effort to help your people today, people will trust that you will help them in the future. This circle of trust is critical in allowing a government to operate in an effective and efficient manner. By better understanding Norway’s government and political culture, it is clear there are many small steps we can take to make our country more stable, more humane, and a better place for everyone.
