OECD Territorial Reviews: Norway 2007

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Few other countries feature the combination of very low population densities and difficult topography that hinders communication, in addition to a variety of contrasting climates. But the “Nordic welfare model” strives, with a good degree of success, to offer equal living conditions to all citizens by providing proper access to quality public services across the country. This comes, however, at great cost. This publication asks whether such a model can be sustainable in the long run, when population ageing and the reduction of petroleum reserves will reduce the leeway that the rapidly growing economy offers.  It examines whether competitiveness and innovation could be further developed, given the high share of resource-based and traditional activities and whether urban policy could be better integrated into regional policy so as to better harness the energy of regional growth engines in different areas of the country, including the northern most parts. Lastly, it looks at whether impending regional reform could facilitate the necessary adaptations by transferring more power to regional councils.

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Assessing Regional Policies

Regional policy in Norway began in the post-war period in response to devastation produced by the conflict and, specifically, the need to reconstruct the northern parts of the country where damage to economic and social infrastructure had been very severe. Initial policy responses tended to be mostly local in scope, to answer immediate needs. In 1951, a more strategic view was introduced with the North Norway Plan, followed over the next decade by economic development measures in other parts of the country. By the early 1960s, the need for a central institution to co-ordinate the range of locally based business support schemes appeared. To this end, a Regional Development Fund was set up in 1961 under the auspices of the Ministry of Local Government and Labour. More generally, regional policy was seen as a way to balance government efforts to stimulate industrial growth in the south and east. As such, regional policy was closely linked to national economic planning, with the goal of ensuring a more balanced and equitable territorial distribution of national income.

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