Norway is a part of the Scandinavian Peninsula, officially also known as the ‘kingdom of Norway’ and located in Northern Europe. The country shares its eastern border with Sweden and is bordered by Finland and Russia on the north-east, Skagerrak Strait to the south with Denmark on the other side. About 50% of the inhabitants of the country live in the southernmost part, in the region around Oslo, the capital.
About two-thirds of Norway’s landscape is a mountainous region, and off its coastline lie, which is carved by deep glacial fjords, some 50,000 islands. Norway has a long coastline facing the North Atlantic Ocean and the Barents Sea. This has an influence on the climate of the country controlling its rainfall and snowfall with the temperature remaining above the freezing level most of the year. Norway is among the few countries with one of the highest and consistent rankings in numerous world indices like- democracy index, freedom of the press and political freedom, happiness index, the standard of living, gender equality, etc.
Why it is that Norway’s policies are so successful? What are the reasons that this country has been outperforming even the superpowers like the US and China? To understand the reasons we’ll have to first look at the political system of Norway and how it works, then look at its performance in different sectors and finally understand what decisions this country took differently from the other countries making its performance one of the best in the world.
The political system of Norway
According to the Constitution of Norway, which was adopted in 1814 (after Norway left the 434-year union with Denmark), Norway is a monarchy and it divides its power between three branches: legislative, which is also considered responsible for appropriations, called the Storting; executive, that is the government and the judiciary, the courts. The government consists of the Prime Minister and the Council of the state called the Statsrad. It is nominally chosen by the monarch with the approval of the legislature (Storting). Until 2009, the legislature operated as a bicameral body but most of the matters were unicameral subjects in plenary sessions.
A quarter of its members were chosen to form the upper house (Lagting), while the rest of the members formed the lower house (Odelsting). Bills had to be passed by both houses consecutively. In 2009, the upper house got dissolved, and the Storting became unicameral permanently. The constitution of Norway is influenced by British political traditions, the constitution of America, and French revolutionary ideas.
The citizens of Norway pay direct taxes to both federal and municipal governments. Unlike different forms of parliamentary legislatures across the world, the Storting in Norway cannot be dismissed during its four-year term of office (redrafting to remove this restriction have been defeated time and again since 1990). If the majority of the parliament votes against an action initiated by the council of state, then either the minister responsible for it or the whole Statsråd resigns. The monarch has a suspending right of veto, in the legislative matters, but, since the 91-year old union with Sweden was dissolved in 1905, this veto has never been exercised.
The political process is quite simple, the citizens of the age 18 years and above elects the 169 members of the Storting and the seats are filled proportionately. After 1961 there hasn’t been a clear majority in Norway so there is a multi-party system with the coalition government. Norwegians are automatically registered to vote, and 78 percent turned out for the 2018 elections, this percentage is important to see that the right to vote is exercised by the majority.
Another important thing to notice in Norway is that it is different from the other countries’ political system is that from the early 21st century, about 1/3rd and 2/5th of the representatives in parliament are women. That is one of the highest representation of women in the world. Gro Harlem Brundtland became the first woman prime minister of Norway in 1981 and she served for three terms. (This is probably why their policies are so directed towards the health and education sector, as the study suggests higher representation of women leads to higher spending on health and education sector as it affects women and children the most. Indeed the expenditure in these sectors in Norway is one of the highest in the world.)
Now, that we have looked at the working of the basic political system of Norway, we’ll try to look at the different areas and the decisions that have made this economy a success story.
Education is given a great deal of importance in this country. Due to the large investment in this field, a great majority of Norway’s schools are state-run and free; of course, there are private schools also available at all levels. Here, all the students are eligible for government loans. Higher education at public universities is considered to be virtually free as there are no tuition fees to be paid. Life-long learning and continuing education for adults is an important part of the Norwegian educational sector.
In fact, Norway has the second-highest participation rate in job-related continuing education and training (44%) which is equally distributed among men and women. Most worker training in Norway – about 85% – is paid for by employers with an emphasis on continuing vocational training (CVT) rather than more formal courses. This makes it obvious why they have a high skilled labor force and innovations.
There is a Compulsory membership for the national health-insurance system that guarantees all Norwegians free medical care in hospitals, reimbursement for doctors’ fees, and free medicines and drugs, as well as an allowance, to compensate for lost wages. For the salaried employees,’ it is compulsory to pay membership fees to secure cash benefits during illness or pregnancy, which is covered by another insurance fund, and it is optional for the self-employed. There is also a well-developed and equipped system for maternal and child health care, as well as compulsory school health services and free family counseling by professionals. The dental services provided by the state take care of children under age 18. Most of the doctors in the country work in hospitals that are owned by state and municipalities.
As per the 2019 report, Norway ranks 3rd in the world’s happiness index. The country has been doing consistently well in almost all of the criteria in this index. Norway ranks among the top 10 countries of the world in GNP per capita with a very low rate of inequity in the distribution of wealth and because the government looks after most of the needs, Norwegians actually don’t mind paying very high taxes.
Norway’s wealth major reason is its oil resource, but what’s interesting to note that unlike the OPEC countries which too have large oil resources, their economy is not completely dependent on oil exports. They have taken long term policy decisions in this area knowing that petroleum is a finite resource. The extraction is completely controlled by the government so that profits are not generated by the private entities and these profits are used to invest in public infrastructure and in banks which have provided them with even more income due to the generation of interest.
Secondly, Norwegians spent a smaller part of their income on food, beverages, and tobacco then they formerly used to. Activities like travel and leisure have increased their share rapidly, along with household goods like electrical appliances. As per the law, Norwegians are guaranteed every year 25 vacation days. Working hours should not exceed 9 hours a day or 40 hours per week. Working five days a week had become the law by the end of the 1960s. So, they have a great and flexible working environment for their workers.
One of the significant things about Norway include that it is an environmentally friendly country, it generates about 98% of its electricity from renewable energy sources (mostly hydropower) and in terms of percentage of its usage, Norway is ranked 9th globally. What’s interesting to note here, is that in terms of actual electricity generated, Norway generates more than all of the eight countries ranked above combined!
Norway also ranks one on the Democracy index with a score of 9.87/10 (as per 2019, Economics Intelligence Unit report) whereas, the US and India are considered to be a flawed democracy by the index. Norwegians do feel like they’re part of the democracy. They recognize their politicians as not a part of some kind of an elite group, but just regular people. The politicians don’t earn that much money. The basic pay for U.S. senators and representatives is $174,000 — compared to $108,000 in Norway, which functions as a social democracy.
Other factors that possibly contribute to its success are the freedom of the press and political freedom again, the country ranks on the top position in both the indices of the world ranking. Norway has pursued progressive social policies. In 1993 it became the second country to legally recognize unions between homosexual partners. Indeed, in 2002 the conservative finance minister officially registered his partnership and met little public opposition. In 2009 same-sex marriage was legalized.
The citizens of Norway seem to have developed a society with care and connection as its basic principles whether it is for the environment or for the people in general. The success story of this economy can be concluded as a two-way relationship- a responsible government and responsible citizens. This does not suggest that their economy is the best model to be followed by every country. Norway has its own issues with the political system like the growing resistance towards immigration, etc. But, for a country which experiences such harsh weather conditions almost half a year, it is still amazing to see that their people are some of the happiest people in the world.