OECD Economic Surveys: Norway 2018
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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How to improve transport-infrastructure investment
Norway makes substantial public investment in transport and this has intensified in recent years. There is potentially large economic benefit from such investment, particularly as good transport infrastructure can help Norway’s transition away from oil-related activities. However, realising these gains requires sound processes for selecting and delivering projects. This chapter assesses the investment process from initial proposals through evaluation, discussion, selection, approval, implementation, and ex post evaluation. It finds that, although the policy process at each stage is clear, and the planning framework has central oversight, final choices of project are often sub-optimal. The chapter identifies a need for stronger top-down influence in the planning process and more influence of economic-efficiency considerations in project selection. It also calls for efforts to broaden ex post assessment of transport investment projects and reduction in project delays.
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