Product Market Competition and Economic Performance in Norway

Norwegian growth has been strong over the past decade. This development has been supported by the off-shore sector, but depleting oil reserves implies that growth will have to rely increasingly on the mainland economy. Empirical work shows that competition is important for promoting economic growth. Recognising the benefits of competition, the government wants to introduce regulatory reforms to stimulate economic growth. However, the promotion of competition has often conflicted with other policy objectives, such as maintaining a regionally dispersed population and a high degree of public ownership. This has lead to weak competition in a number of sectors, resulting in high prices, weak innovative activity and inefficient resource allocation. Reforms to promote product market competition in Norway should therefore inter alia focus on separating the public sector’s roles and functions as owner and regulator. This requires an increase in the independence of sector ...