Beyond the resource curse: political and economic dynamics in the institutionalisation of the Norwegian Oil Fund

Abstract

The literature on natural resource dependence generally concludes that social and economic development following a resource boom relies heavily on governmental economic policy. However, little attention has been directed towards theorising how these policies are institutionalised. To address these shortcomings, this study conducts a case study of the Norwegian Oil Fund and its associated fiscal policies, drawing on insights from 26 elite interviews with key political and technocratic actors. This dissertation argues that a comprehensive examination of effective strategies to escape the resource curse must incorporate policymaking dynamics in its analysis. By investigating the political processes and mechanisms facilitating the institutionalisation of the macroeconomic regime designed to manage Norway’s petroleum wealth, this dissertation engages and contributes to academic discussions concerning both natural resource management and broader themes related to policy process theories. By exploring different phases of the institutionalisation of the Norwegian regime, the four appended papers make contributions to advancing theories within the realm of policy process studies. Specifically, they advocate for integrating the normative dimension into the analysis of expert influence on policymaking, broadening the application of the Multiple Streams Framework to decision-making, and expanding the concept of transformative power to include control over future resources. These insights are utilised in a comprehensive analysis of the case context. Drawing upon the theoretical perspectives presented in the papers, this dissertation identifies five key causal mechanisms that contribute to explaining the inception of the Norwegian Oil Fund and the institutionalisation of its associated macroeconomic regime. These mechanisms encompass strategic framing, discursive depoliticisation, control of future resources, layering, and conceptual innovation. Norway´s experiences are influenced by unique factors and the policy processes examined in this study occurred more than two decades ago. However, despite being a historical study of past transitions, elucidating the mechanisms that can contribute to explaining the inception of new policies and ensure their longevity remains relevant in today’s context of transitioning towards more sustainable growth and development.