Norway has a very efficient and well-maintained system for conserving and utilizing its petroleum wealth. Norway’s sovereign wealth fund, which currently holds more than $656 billion, has a fiscal rule that ensures its petroleum wealth is not consumed, but converted into financial wealth, which can be used to aid in financing a comprehensive welfare state in the future. Its wealth fund is used as a stabilizing mechanism for exchange rates and its has a high degree of transparency and accountability as a result of its elaborate checks and balances system. The Norwegian system of labor ensures pay guarantees which allows the stabilization of the average wage and contributes to the essential elements of Norway’s success in managing its oil wealth.
Norway’s tax revenue provides foundation for a comprehensive welfare system, which results in one of the lowest levels of inequality in the world. The principles that the labor relations system is premised on, as well as the strategies used and management of Norway’s petroleum wealth, make up the foundation of its successful economy.
Source:
Bruce Campbell, “Norway Imposes 78% Tax On All Gas and Oil Companies,” The Monitor (Canadian Center for Policy Alternatives), November 1, 2012. http://pdc-connection.ebscohost.com/c/articles/84309448/norway-imposes-taxes-78-all-oil-gas-companies
Student Researcher: Paige Fischer, Sonoma State University
Faculty Evaluator: Andy Deseran, Sonoma State University