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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Governance Issues

Geography and settlement patterns strongly constitute inherent factors of regional policy in most countries. This is particularly the case of Norway, with low population densities, especially in the northern part of the country, as well as a broken, mountainous landscape that renders communication problematic and reduces accessibility to services, economic activities and jobs in large parts of the country. An illustration of this is that 40% of labour market regions consist of only one municipality, as indicated in Chapter 1. Regional policy in Norway thus traditionally seeks to address the issues stemming from dispersion of population and difficulties in access, with most of these areas characterised by lower than average economic performances and demographic stagnation or loss. The challenge of Norwegian regional policy is to compensate for these natural handicaps without stifling chances of ensuring on the longer term economic sustainability based more on endogenous growth than on handouts from the national level.

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