ABSTRACT
The history of Norwegian economic development is a Cinderella story. At the turn of the 19th century, Norway was a poor, underdeveloped country on the margins of Europe: there were no banks, no institutions of higher learning, not even an indigenous daily newspaper. Most impressively, Norwegians have engineered this growth while maintaining a vibrant rural constituency, a relatively egalitarian income distribution, and a wide array of public social services. In many ways, the Norwegian record in the second half of the 20th century is a model of social democratic economic management. Social democracy depended on an autonomous tax base that is difficult, if not impossible, to sustain in a world where capital flees in search of the largest returns and the smallest tax burden. More importantly, social democracy relied on the state's ability to provide political, not economic, targets for the rate of social investment. The chapter also presents an overview of the key concepts discussed in this book.
