Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book focuses on clustering incentives and the optimal government response to observed changes in localization strategy. It provides a summary of the proposals made by the Commission to deal with this and other deficiencies that were identified in its report, in particular barriers to entry due to lack of interest compensation for losses carried forward. The book presents a model-based analysis that provides answers to the question: how efficient higher oil prices or tax rebates are in getting more out of the fields. It discusses the level of consumption in Norway on a background of the estimated permanent income from petroleum wealth. The book also presents three different institutional mechanisms for allocation and management of petroleum income funds with different degrees of defence against rent seeking and deterioration.