Norway

Through its declining aid shares in the mid-1990s, Norway seemed bent on becoming the first member state ever to reach the UN 0.7% aid target in a downward movement from the top. But in 1997 the Norwegian aid volume was stabilised at 0.88% of GNP. That year, the new centre coalition government declared that it intended to increase aid anew, restoring the 1% level by the year 2001. However, in 1998 ‘the market’ punished expansive Norwegian financial and income policies by pressing the local currency down and forcing interest rates up. Backed by an overwhelming parliamentary majority, the minority government felt forced to introduce more contractive policies. In its budget proposition for 1999 it stated that the aid escalation plan had to be postponed by one year.