In a world of uncertainty and precariousness, tiny Norway shines as a beacon of stability, prosperity, and innovation. What’s so special about this petite Scandinavian country, and what can countries do to replicate the results?
In recent years, perhaps due to the heightened societal fragmentation and political polarization across the world, individuals have looked to this idyllic northern European country in admiration, and for good reason. Norway ranks the highest on the Human Development Index – a measure of well-being incorporating education, life expectancy, economic conditions and more – in addition to a myriad of other accomplishments. So, what is Norway doing, and what can other countries learn from it?
During a North Sea oil boom, government officials decided to established a sovereign wealth fund for its citizens. The fund is now worth almost $900 billion USD. Norway has a population of 5 million people. Each person is thus entitled to roughly $170,000. To put that into perspective, it would be like if Canada had a sovereign wealth fund of 6 trillion dollars. A baseline 28% federal income tax for high earners makes Norway’s wide array of government spending possible. A textbook example of a welfare state, the Norwegian government covers everything their citizens could ever need: weddings, funerals, paternity leave for both parents, and more. Indeed, mothers receive 10 months of paid paternity leave, while fathers receive 10 weeks fully paid during the child’s first year.
Norway is not part of the European Union, but is, however, part of the European Economic Area. This allows the country to take advantage of the lack of tariffs within EU countries. Because of their membership with the EEA, Norway is only subject to approximately 20% of EU laws. Goods, capital, services and people may flow freely into Norway, as the country is part of the Schengen area. Norway contributes roughly 300 million euros per year to the EU. By comparison, Britain paid 13 billion euros in its last year in the organization.
Social policies in Norway
Norway has an exceptionally homogenous population. As of 2016, 83% of citizens were classified as Norwegian. In Canada, roughly 23% of the population are immigrants, not to mention cultural divides between Quebec and the rest of Canada. In Norway, the tempestuous politics of their relatively heterogeneous counterparts like America and Britain are effectively absent. This allows for improved social solidarity and a higher likelihood of political cooperation.
Every country has its own unique history, culture, demography, and values. This is both encouraging and problematic. The distinctness of each country is a testament to the value of liberal democracies. People can express their beliefs and opinions without fear of repercussions, and collectively contributes to the fabric of global culture. However, what works in Norway may not be feasible in other countries. A generous social welfare system, a massive national bank account, political stability, and ethnic homogeneity make Norway almost uniquely capable of creating such a prosperous, progressive country.
Nonetheless, leaders around the world would be wise to experiment with some of Norway’s policies as a way to holistically improve their countries.