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2018 OECD Economic Surveys: Norway 2018

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Norway has high levels of GDP per capita and inclusiveness, helped by business dynamism, sound petroleum-wealth management and comprehensive welfare and public services. Retaining these successful outcomes will require the business sector to diversify and successfully exploit opportunities from globalisation and technological change, while continuing to contribute to inclusiveness. This is the theme of Chapter 1 of this Survey. In general the policy environment is business-friendly and adjustment from a “4%” to a “3%” fiscal rule has demonstrated continued good macroeconomic management. However, the house-price correction currently underway poses challenges. Also there is scope to strengthen Norway’s business environment, including through attention to competition and business insolvency, reduced state-stakes and encouragement of new “disruptive” businesses.

Norway’s economy would benefit from improving value for money in public spending. This would create room for lowering taxes, including those that most strongly impact businesses. There is a tendency for high-cost options in policies and inertia in reform. Chapter 2 of this Survey focuses on transport infrastructure investment. Such investment can widen economic opportunities for business and increase welfare for households. However, realising these returns requires that transport-infrastructure investment is well chosen and implemented efficiently.

SPECIAL FEATURES: BUSINESS ENVIRONMENT; TRANSPORT INFRASTRUTURE

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Maintaining a successful business sector in a changing world

Norway’s success in maintaining high living standards, low inequality and good progress in gender balance owes much to its business sector. High-productivity business-sector jobs support high wages and profits, providing capacity to fund comprehensive public services and inclusive employment practices. Ensuring that the business sector thrives as globalisation and technologies evolve further and as the oil and gas sector enters long-term decline requires maintaining business-friendly conditions. This chapter examines framework conditions, notably competition legislation and policy affecting firm entry and exit (“firm dynamics”). It evaluates how best to encourage new business models, as well the growing issue of labour supply among older cohorts. Education policy’s role in providing skills conducive to good lifetime earnings is also discussed.

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