Planet Money Explains: How Norway Overcame the Resource Curse—Economic Lessons from Oil and Salmon

▶ Original episode: https://www.npr.org/2026/07/29/nx-s1-5909323/summer-school-norway-glut-resource-curse-oil

It has been a year since the federal parliament voted to cut funding for public broadcasting. NPR remains committed to providing information. This edition of Planet Money Summer School visits Norway, which has achieved a level of prosperity that exceeds the United States in GDP per capita. In a project where host Robert Smith visits all seven continents every Wednesday until Labor Day, he explores how other countries have overcome economic challenges. Hilde Bjørnland, a professor of economics at the BI Norwegian Business School, joins the program as a local expert and was encouraged by Robert Smith to call her "Hilde."

Although the country is one of the world's leading oil producers and the largest in Europe, it has succeeded in avoiding the "resource curse" that plagues many resource-rich nations. This was made possible by the visionary recommendations of Farouk Al-Kasim, a geologist from Iraq, and remarkable self-restraint by the government.

The program also introduces the case of salmon, another abundant resource, where the government and the industry worked together to build the "Norwegian Salmon" brand, successfully opening up the Japanese market, which had previously viewed eating raw fish as a taboo. Through these two case studies, we explore important economic lessons regarding wealth management, social trust, and market creation through public-private partnerships.

The Light and Shadow of the Norwegian Economy

Robert Smith points out that while Scandinavian countries, including Norway, are often praised as ideal social models, they are not leaders in fields like entrepreneurship, productivity, or cutting-edge technologies such as AI. Professor Hilde Bjørnland agreed that in that sense, Norway is a safe and wealthy welfare state, but perhaps not a leader in invention at this moment. In particular, she noted that Norway is one of the few countries in the world to introduce a wealth tax—taxing investments, housing, and owned assets annually rather than just income—which may be dampening the desire for new investment and entrepreneurship. When Robert Smith asked if this wealth tax dulls the competitive spirit to start internet or AI companies, Professor Bjørnland replied that it is certainly part of the problem, and most Norwegian economists believe this tax hinders desirable investment. While a reduction of this wealth tax is currently being proposed and debated, she pointed out that it is not working in favor of new investment at this time. Robert Smith mentioned that in the U.S., new billionaires are being created alongside new investments, and that there is a debate about introducing a wealth tax there. Professor Bjørnland added that other tax systems, such as inheritance taxes, property taxes, or higher income taxes, could also be considered.

She also pointed out that regarding the use of oil revenues, there is significant pressure on politicians to spend, and funds could be used for purposes that do not necessarily lead to productivity or sustainability in the Norwegian economy, such as building roads to small islands without considering future maintenance costs. When Robert Smith asked if it is possible to "become too rich" or "have too much money," Professor Bjørnland replied that while she is not sure if they have too much, having too much can make it difficult for politicians to set the right priorities. Inefficiency due to wealth has become a challenge.

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Lecture 1: Oil and the Resource Curse—Norway's Miraculous Avoidance Strategy

Now, let's move on to the first case study. This story was broadcast in 2011 and was covered by David Kestenbaum and Alex Blumberg. The resource curse, or the "paradox of plenty," refers to the paradoxical phenomenon where a country that discovers natural resources like oil and gas becomes poorer after their extraction. Professor Hilde Bjørnland confirmed this definition, explaining that finding resources can be a "curse" rather than a blessing. Factors include the spread of corruption and "Dutch Disease," where resource exports drive up the currency and squeeze other industries. The program introduces how Norway found a secret amulet to break the resource curse for this classic international economics problem.

The key to Norway avoiding this curse was the presence of Farouk Al-Kasim, a geologist from Iraq. He had worked for an oil company in Iraq for over a decade and was trained as a geologist. In the 1960s, because his wife was Norwegian and his son needed treatment for cerebral palsy, the family decided to move to Norway. The Norwegian Geological Survey at the time had concluded that "there is no oil," so it seemed like the worst place for his career. Farouk Al-Kasim thought that if he were lucky, he might find work in Europe, North Africa, or the Middle East and commute long-distance from Norway, or in the worst case, he considered becoming a taxi driver in Norway.

After arriving in Norway, he had a six-hour wait for his train. To make good use of that time, he looked up the Ministry of Industry in the phone book, visited it on foot, and tried to get a list of companies looking for oil. At the ministry, the response was not as simple as he had expected; the staff sat him down and bombarded him with various questions. In fact, the ministry staff had been waiting for someone who could interpret the exploration data sent by oil companies. Thus, Farouk Al-Kasim was hired by the Ministry of Industry and given the task of analyzing the oil companies' test drilling data. His field changed from the deserts of Iraq to the cold, rough seas of Norway near the Arctic Circle, but the principles of geology remained the same. From the test drilling data, he discovered that although they had not reached commercial scale, oil had clearly already been discovered four times. What oil companies look for in a new region are not small signs like "foxes, rabbits, or mice," but giant oil fields called "elephants." The data showed small signs, but Farouk Al-Kasim stated that a good geologist should understand that if given time, there is a possibility that not just one, but 20 of those "elephants" could be found.

In his report, he told the government two things. One was the fact that, contrary to the official view, oil existed. The other was that there was likely a massive amount of oil, and Norway needed to prepare for the resource curse. The government was initially surprised by the report's contents and reacted by saying they would wait and see. He was desperate to persuade Norway to start preparing. His persuasion soon became easier. In 1969, shortly after the report, an "elephant" was discovered. It was the Ekofisk oil field, a massive reservoir that still produces about 300,000 barrels of crude oil per day. Norway found itself with a massive amount of oil and, at the same time, a person from Iraq urging extreme caution in handling it.

Here, we summarize why finding a pot of gold is considered a "curse" by economists. The first reason is that it corrupts human nature. When something valuable is discovered, conflict arises over it, and dictators often monopolize the wealth to maintain power. The second problem is more mathematical and is called "Dutch Disease." This is named after the phenomenon that occurred in the Netherlands after it discovered natural gas. When a product that the whole world wants to buy is suddenly created, funds flow into the country, and the currency value rises. To buy Norwegian oil, one needs Norwegian kroner, and demand for the krone, which previously had little global demand, surges. A strong currency brings a difficult situation for local industries. For example, in the Norwegian fishing industry, cod becomes much more expensive than cod from countries that are not oil producers. Because of the oil discovery, other sectors of the economy may shrink or die out.

In response to this situation, the government consulted Farouk Al-Kasim and others on countermeasures. He and his colleagues needed a quiet place, so they holed up in a cabin in the woods owned by a colleague. It was an environment where everything was available—food, beds, fishing rods—and they could work hard and relax when tired. Of the one-week grace period they were given, they actually wrote the first draft of the white paper in four and a half days. This white paper was reviewed by senior government officials, incorporated into the Ministry of Finance's plan, and saved Norway from the resource curse. Farouk Al-Kasim clearly states that he was just one of many people who contributed to this plan.

The core of that plan had two parts. One was to establish a strong, independent regulatory body to impose a high tax rate of 78% on oil companies, ensuring fair competition and tax revenue. The other was to limit the annual allocation of drilling rights to a very small number (3-4 blocks per year), developing it slowly over decades rather than all at once. This remarkable self-restraint prevented the hollowing out of domestic industries due to a strong currency. The entire country did not question this restraint. When the white paper was first published in 1974, it was received with skepticism by the industry, which wanted full-scale development, but by the time the debate settled, the politicians' opinion was clear: "Let's go slowly."

Even more importantly, the government did not spend much of the oil revenue, but instead saved it in a fund for the future. They reinvested almost all of the oil revenue into the development of the oil industry, such as drilling new wells, new exploration, and developing new technologies. The story of this Oil Fund (Government Pension Fund) is something the program learned from an article by Martin Sandbu, a Financial Times editorial writer from Norway. By the time of the program's first broadcast in 2011, the fund had already reached about $500 billion, becoming an asset of about $100,000 per citizen. According to the latest figures from Professor Hilde Bjørnland, this fund has now swelled to $2.3 trillion, which translates to $400,000 per Norwegian citizen for a population of about 5.5 million. Even so, the government follows the rule of not touching the principal for future generations and using only a portion of the investment returns for annual fiscal spending.

In parallel with high taxation, the government also focused on research and development and training engineers to drill in the harsh environment of the North Sea. As a result, not only did they gain tax revenue from oil companies, but an industry was born with Norway's own advanced subsea oil field development technology and expertise, and now they even export technology and engineers to other countries. Today, there are Norwegian drilling engineers, Norwegian drilling companies, Norwegian subsea robots, and a Norwegian high-tech oil industry. Professor Hilde Bjørnland explains that while a typical oil-producing country is a small nation without knowledge, where large companies like those in the U.S. have all the expertise to drill and the government wastes the revenue, leading to the resource curse, Norway took a different path.

Professor Hilde Bjørnland cited as a prerequisite for this success that Norway was originally a democracy and that there was a high level of "social trust" among the public in the government and the judiciary. Because people believed that the government would make the best decisions for the Norwegian economy, they were able to suppress pressure from the industry wanting rapid development and accept the political decision to "go slowly." The majority of Norwegians trust the government, parliament, and the high court, and Professor Hilde Bjørnland stated that while not all lawyers are trusted, the high court is. Having a good fiscal tax system in place was also an important factor.

Norway's Unexpected Irony: An Oil Power That Is an Electric Vehicle Leader

Norway's wealth comes from oil, yet a seemingly contradictory situation has emerged where 96% of new cars sold in the country are electric. When Robert Smith confirmed this figure, Professor Hilde Bjørnland replied that it is absolutely true, adding that she owns an electric car herself and loves it.

Behind this rapid EV adoption were massive tax incentives from the government. Professor Hilde Bjørnland points out that while these incentives worked effectively at first, they became excessive subsidies once the price of electric vehicles dropped. The structure where revenue from oil exports is effectively used to subsidize electric vehicles illustrates the complex steering required by a resource-rich nation.

Lecture 2: Salmon and Market Creation—Selling "Norway"

The second case after oil is salmon. Both are abundant in Norway, but while demand was concentrated for oil, salmon faced a lack of demand. Through this case, Professor Hilde Bjørnland says she wants students to think about what trade barriers are and why markets alone are not always sufficient.

When we talk about international trade, we often focus on things like tariffs and quotas. And there is the idea that if those barriers are removed, new products will flood across borders all at once. However, that is not always the case. Sometimes you have to spend years and years of effort, pleading and convincing an entire country that what you have in abundance and want to sell is something they actually want to buy. Norwegian salmon is a prime example of this.

This case study, broadcast in 2015 and hosted by Jess Jiang and Jacob Goldstein, begins at Jewel Bako, a sushi restaurant in Manhattan. Chef Shimao Ishikawa, a sushi chef with nearly 40 years of experience who even holds licenses to prepare sea urchin and fugu, had surprisingly never eaten any raw salmon—despite the fact that tuna is the most popular item at his restaurant, and salmon is the second.

In the past in Japan, eating raw salmon was considered akin to eating raw pork and was a cultural taboo. The story of how Norway established raw salmon in the Japanese market was a grand experiment that went beyond mere commerce, aiming to change perceptions and culture. The narrator of this story is Bjorn Edek Olsson. He joined the program via a broadcast from a studio in Tromsø, a small island in northern Norway. At the beginning of the program, there is also a lighthearted exchange about whether "Planet Money" would be translated as "muni planet" in Norwegian.

Decades ago, when Olsson graduated from university, the Norwegian government had been subsidizing the fishing industry for decades, essentially paying people to catch fish. If you subsidize something, it naturally increases. It was not a very wise way to spend money, and the more they used it, the worse the situation became. While the government reduced subsidies, it did not abandon the fishing industry, instead seeking ways to have the world buy Norwegian fish. And the country they set their sights on, as one that loved fish and needed to increase fish imports, was Japan.

However, at the time, there was no culture of eating raw salmon in Japan. Salmon sushi did not exist in either Japan or Norway. There was salted or smoked salmon, but people did not eat chunks of raw salmon. In fact, the idea for salmon sushi began as a very small experiment at the Norwegian Embassy in Tokyo. The people at the embassy were looking for ways to offer Norwegian products in a Japanese style. They tried it at the embassy, thinking, "Let's try a little raw salmon." The chef and the ambassador said, "This is actually quite delicious."

During this same period, Olsson was hired by the Norwegian government to sell fish to the Japanese. He was a former fisherman who spoke Japanese, making him the perfect person for the task. His goal was clear. Since the Japanese were already eating grilled salmon, it could be sold cheaply. But if it were fish for sushi, the same fish could sometimes be sold for five times the price. If they could popularize salmon sushi in Japan, the value of Norwegian salmon would increase significantly.

Olsson went to Tokyo, gathered executives from the Japanese fishing industry in a conference room, and presented the next big hit product: salmon sushi. They told him directly across the table, "It's impossible. Japanese people do not eat raw salmon." Even when Olsson pushed back, saying, "But it's delicious," he was dismissed with, "No, it's not." Everything was rejected: the color was too pale, it had to be redder, it had a smell, the shape of the salmon's head was different, the shape of the gills was wrong—everything. Olsson's great challenge was to change the perception of an entire country. The perception of people who thought even the color and the shape of the head were "wrong." If you want to change perceptions and make people buy something, the strategy is obvious: launch an advertising campaign. Olsson and his colleagues started TV commercials and decided to create a cute cartoon character. According to Olsson, it was a very silly Viking, a ridiculous drawing with a helmet and a big head. He actually sent a photo of the mascot, which said "Norwegian seafood," and it looked like something an outsider had come up with to pander to a Japanese audience: a very cute little Viking boy with a big head and big eyes, holding a giant fork as tall as himself. This Viking strategy, naturally, did not succeed.

The Japanese had an image that the type of salmon they were eating at the time had parasites and that eating it raw would make you sick. Olsson explained that Norwegian salmon was completely different and that parasites were not an issue. However, you cannot run an ad saying, "Rest assured, there are no parasites in Norwegian salmon." So what they conveyed to consumers was information about "cold, clear Norwegian seawater," adding photos of fjords, mountains, and glaciers to give the impression of something pure and fresh. However, just being pure and fresh was not enough to make Japan eat raw salmon.

Looking at Norway, the salmon industry was desperate. Overproduction continued to worsen, and they were in a situation where tons of salmon were being piled up in giant industrial freezers. Olsson was desperately looking for a partner in Japan who would buy into his dream of getting Japanese people to eat raw salmon. In the midst of this, there was one company he had built a relationship with for many years: Nichirei. Nichirei is a company everyone in Japan knows, selling frozen foods, gyoza, chicken nuggets, squid, and more. Olsson proposed to Nichirei, "I will sell you 5,000 tons of frozen salmon very cheaply, so please try selling it in grocery stores for sushi." Nichirei said "Yes." For Olsson, it was the moment the deal was closed, and he recalls that his happiness that day was "like ascending to heaven." That happiness was widely shared.

When Nichirei started selling salmon for sushi, the concept of salmon sushi began to feel much more normal than before. It is like, for example, if Danone started selling yogurt in this country with raw pork at the bottom. It is a combination you would never think of yourself, but if you have been eating Danone yogurt and have never gotten a stomach ache, you might feel like putting it in your cart along with the strawberry banana flavor. Eventually, salmon sushi was seen everywhere in Japan, especially at conveyor belt sushi chains, and almost everyone tried raw salmon. Sushi chef Tadashi Ono was 53 at the time, and the first time he ate salmon sushi was about 20 years ago, but that first experience was not good. He was scared and could not enjoy the taste. His head was filled with the thought, "Am I going to get sick?" rather than how it tasted. However, as he tried it a second and third time, he began to like it. He says it is buttery, creamy, and has a texture that melts in your mouth.

According to a recent survey by the Norwegian Seafood Council, 59% of Japanese people who eat salmon when dining out now prefer to eat it raw.

Professor Hilde Bjørnland analyzes this success as the resolution of a "coordination problem" and the avoidance of a "free-rider problem." If one company had spent a huge amount of money alone to develop the Japanese market, that success would have been free-ridden by other companies that did not invest. That is why it was necessary for the entire industry and the government to unite to market not just one company, but Norwegian salmon as a whole brand. It was not just selling salmon, but selling "Norway" itself.

Summary: Lessons from Norway

Robert Smith pointed out that this salmon case was not just selling Norwegian salmon but selling "Norway," and stated it is a good example of "soft power" seen around the world. It is the same as South Korea selling its entire culture as cutting-edge and cool, which benefits all its companies, or France selling high gastronomic standards. This was an opportunity for Norway to develop a brand of "pure nature, quality." Professor Hilde Bjørnland completely agreed, mentioning the attempt to brand through Vikings, and stated that today that Viking image can even be seen at the World Cup. She also mentioned the potential for increased tourism. When Robert Smith suggested selling plastic Viking helmets with horns, Professor Hilde Bjørnland laughed, saying no one would want them, and added that they would be made in China anyway.

Professor Hilde Bjørnland emphasizes that the biggest lesson the U.S. can learn from Norwegian economics is that "it is not just the luck of finding resources, but how that wealth was managed" that is important. Norway redistributed the vast wealth of oil to society as a whole, realizing a society with low income inequality. She states that thinking about the direction of turning massive national wealth into the benefit of the entire citizenry is a suggestion for the U.S.

At the end of the program, the key economic concepts of this episode were reviewed. The "Resource Curse" or "Dutch Disease" is a phenomenon where the discovery of natural resources makes a country poorer than before. And a "Free Rider" is someone who gets a benefit by riding on the results of others' investments or efforts. Furthermore, the definition of "Social Trust" was confirmed. This is the belief that other members of society are basically honest, fair, and reliable. The fact that Norway has skillfully avoided or overcome these problems based on high social trust is at the core of this series of successes.

For those who want to learn more about how to skillfully profit from oversupply, I recommend the chapter on raisins in the new Planet Money book. Try opening to page 32. It tells the story of how raisins were just worthless dried grapes until someone found a way to brand them. The show also featured clever economic hacks from around the world submitted by listeners. For example, in Taiwan, every commercial receipt also serves as a lottery ticket, with the government awarding prizes to winners every few months. This is said to be effective in preventing companies from conducting off-the-books transactions to evade taxes. The show further invites listeners to send economic hacks they have found around the world to planetmoney@npr.org with the subject line "summer school," and the best ideas will be featured in the final graduation episode of the series. The Summer School producer is Sofia Polisakar, edited by Alex Goldmark, fact-checked by Sierra Juarez, engineered by Sina Lafredo, with support from An Lee Huang and Robert Rodriguez. Robert Smith mentions that when he is not doing Summer School, he talks about business history on his new podcast, "Business History."

▶ Previous episode in the same series: Planet Money Summer School: Economic Experiments in Kenya and Nigeria—Randomized Controlled Trials and Cash Transfers to Entrepreneurs https://note.com/yondo/n/n4a9f5bebeeb6

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