One Size Doesn't Fit All: Challenges to Exporting the "Norwegian Model"
On February 18, Stanford University's Mark Thurber delivered a research paper co-written with Revenue Watch Legal Analyst Patrick Heller and David Hults, also of Stanford University, to the 2010 International Studies Association Conference. The paper, "The Limits of Institutional Design in Oil Sector Governance: Exporting the Norwegian Model," published by Stanford's Program on Energy and Sustainable Development, studied eight resource-rich countries to explore the obstacles to exporting Norway's lauded model of resource management to other nations.
Oil-producing countries face steep challenges in building political institutions that maximize the public benefit generated by the industry and ensure the accountability of government officials and oil companies. One of the trickiest barriers relates to dividing responsibilities for government participation in commercial activities and oil operations oversight among a range of public bodies, which can include ministries, national oil companies and independent regulatory agencies.
Many international experts have argued that the best structure for promoting sectoral efficiency and minimizing conflict of interest is the so-called "Norwegian Model," in which powers are formally separated among three distinct public bodies and the national oil company is strictly excluded from an oversight or policy-making role.
However, paper authors Thurber, Hults and Heller found that the Norwegian separation-of-powers model has less relevance in countries like Nigeria, Algeria and Angola, where technical capacity is relatively weak and there is no entrenched practice of democratic institutions. These countries may be better served by consolidating commercial, policy and regulatory functions into a single body until institutional capacity has improved, and/or by pursuing incremental reform that creates islands of technical competence. While the Norwegian Model may unquestionably be a "best practice" of sorts, it is not the best prescription for every ailing oil sector.
Read more and download the full paper … (Stanford University)
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- Good Governance of the National Petroleum Sector (Chatham House)
- Stanford Research Project on National Oil Companies (Stanford University)
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