The conference was opened by Karen Helene Ulltveit-Moe, Head of the Department of Economics at the University of Oslo, who introduced the theme of this year’s event: government spending and the efficient use of public resources. The aim of the conference was to present different perspectives on why public spending in Norway has increased over time and to explore the potential consequences for the Norwegian economy in the years ahead.
The first speaker was Martin Blomhoff Holm, NFS affiliate and Associate Professor at the Department of Economics. He highlighted how political priorities have shaped the composition and growth of public spending in Norway. Holm emphasized that Norway, unlike many other countries, has been able to expand the size of its public sector - largely due to revenues from the Government Pension Fund Global (SPU). At the same time, he warned that current trends may not be sustainable in the long run, noting that “we cannot afford to continue in the same way as we do today.” He also discussed the relevance of the Baumol effect, arguing that rising costs in public services are to some extent a natural consequence of structural changes in the economy.
To see Holm's presentation, click here.
The second speaker, Martin Bech Holte, economist and author of ''Landet Som Ble For Rikt'' and ''Alternativt Statsbudsjett'', argued that Norway has both the resources and the opportunities to perform better economically - and should therefore aim higher. He illustrated his points by discussing developments in infrastructure investment, declining educational outcomes (as measured, for example, by PISA scores), and the high cost of public services in Norway compared with other European countries. Holte also raised concerns about moral hazard, warning that abundant public resources may reduce incentives to prioritize spending carefully. Overall, he argued that Norway receives too little value for money from parts of the public sector and that spending should be reoriented more strongly toward core welfare services such as education and health care.
To see Bech Holte's presentation, click here.
The third speaker was Gaute Torsvik, Director of Norwegian Fiscal Studies (NFS) and Professor at the Department of Economics. Torsvik introduced the concept of the ''Buddenbrooks syndrome'', discussing the risk that societies with long periods of prosperity may become less focused on work and productivity, instead relying on the fruits of past economic success. At the same time, he emphasized that Norway’s economic situation is not bleak: productivity remains relatively high, income inequality is moderate, and employment rates are strong by international standards. He also emphasized that Norway scores highly on measures of adult skills and work-related competencies, as documented by the OECD’s PIAAC surveys, suggesting that the Norwegian workforce remains strong by international standards. A key message in his presentation was that meaningful prioritisation of public spending requires clear evaluation standards, and that such standards must be grounded in theory and data rather than intuition. Furthermore, Torsvik noted that while the Norwegian state is large compared to other countries, it is still unclear whether its size is optimal. Given future demographic and fiscal challenges, he argued for what he termed ''knowledge-based public spending''. He also presented recent research from NFS on the effects of reducing the top marginal tax rate, as well as ongoing work related to the upcoming tax lottery experiment, discussing the potential implications for Norwegian society going forward.
To see Torsvik's presentation, click here.
The conference concluded with a panel debate moderated by Bård Bjerkholt, commentator at Dagens Næringsliv. The discussion featured Kristin Clemet, Managing Director of Civita, together with the conference speakers, and addressed key questions about how public spending should be designed in the future. The debate also included questions and reflections from the audience, contributing to a lively and engaged discussion.