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Resource curse avoidance: Governmental intervention and wage formation in the Norwegian petroleum sector

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  • Jan Morten Dyrstad

    (Department of Economics, Norwegian University of Science and Technology)

Abstract

A likely channel for Dutch disease turning a presumably blessing resource windfall into a curse, is the wage formation process. By utilizing the shift from decentralized and uncoordinated wage bargaining in the Norwegian petroleum sector to co-ordinated bargaining, this paper analyzes the effectiveness of a governmental intervention aimed at preventing the extraordinary petroleum wage inflation to become detrimental to the economy. The empirical analysis shows that the intervention was successful as insider weights and insider hysteresis effects were effectively reduced, and that the system of coordinated wage bargaining was re-established. The principal conclusion is that institutions and institutional setting play a crucial role in avoiding adverse economic development.

Suggested Citation

  • Jan Morten Dyrstad, 2015. "Resource curse avoidance: Governmental intervention and wage formation in the Norwegian petroleum sector," Working Paper Series 16715, Department of Economics, Norwegian University of Science and Technology.
    • Handle: RePEc:nst:samfok:16715
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    File URL: http://www.svt.ntnu.no/iso/WP/2015/6_Dyrstad.pdf
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    References listed on IDEAS

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    Cited by:

    1. Roberto Iacono, 2019. "The Norwegian Oil Bonanza and the Scandinavian Model in Comparative Perspective," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 63-82, March.

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    More about this item

    Keywords

    Resource curse; Wage formation; Insider-outsider forces;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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