A study of why Norway did so much better than UK and Greece in the Dissertation

A study of why Norway did so much better than UK and Greece in the financial crisis - Dissertation Example It is obvious though that government economic policy does shape the quantitative results as can be determined from the GNP and GDP. Because of this, the global financial crisis also highlighted the different approaches that governments employ in managing the economies of their respective countries. The experiences of Norway and Greece expose the fundamental differences in government’s type of leadership in the economic sphere, particularly in finance. While many countries, including the economic powers reeled in the midst of recession, Norway’s economy grew stronger by almost 3 percent while its government enjoyed an 11 percent surplus budget (Thomas 2009). Greece’s economy, on the other hand, started to plummet at the onset of global financial crisis. While Norway, despite its relatively robust economic policies, managed to institute reforms to cushion the impact of the recession, Greece continues to experience worsening social turmoil brought about by the crisi s. The Greek government gets a huge part of the blame as it failed in the area of financial management. According to the Global Financial Integrity analyst Dev Kar, â€Å"over the past decade ending 2009, Greece lost an estimated US$160 billion in unrecorded transfers through its balance of payments† (2010). This extremely blatant example of economic mismanagement is just one of the major factors that have caused the current financial crisis in the Mediterranean country. Further explications of the reasons why Norway fared much better than Greece during the global financial crisis would be presented in this literature review. The development of Norway’s economy took a long and tedious process before it achieved its current healthy conditions. While the uncertainties plagued the country in the decades and centuries before, it has been able to sustain its growth since the 1970s. There were times since the mid-1970s when the growth rate slowed but, compared to the respect ive economies of its European neighbours, Norway’s steady development has been considered as unprecedented. Ola Honningdal Grytten of the Norwegian School of Economics and Business Administration points out that there are three major factors that contributed to the economic growth of the country, particularly in the 19th and 20th centuries. Grytten identifies these as the country’s richness when it comes to natural resources, its skilled labour force, and its willingness to make use of the latest technology for productive endeavours (2010). In his article, Grytten acknowledges that government policies play a very important role in the maximisation of the said assets. For a long time, since the years of the economy’s rapid development, Norway was led by the Labour party. The Labour-dominated government initiated countercyclical policies which resulted in deindustrialization in the 1970s, a process which many economists, was regressive in essence. Countercyclical policies include the imposition of heavy taxes on business to generate funds for the government, particularly for its welfare programmes. During those times, the country was on the path of becoming one of the most advanced welfare states in Europe. Grytten’