Section II: The Norway Case — Governing Sudden Wealth Without Losing Balance

The Norway case shows how disciplined governance turned oil wealth into lasting prosperity, offering vital lessons for Vietnam’s long-term development.

To understand how industrial policy succeeds in practice, it is useful to study moments of sudden opportunity. Norway offers a rare example of a country that discovered extraordinary wealth and responded not with urgency, but with restraint.

Norway turned sudden oil wealth into lasting national strength through restraint, institutions, and long-term governance — a contrast to Venezuela’s oil trap, and a lesson for Vietnam.

Before oil, Norway was a small, open economy built on shipping, fishing, hydropower, and manufacturing. When large petroleum discoveries were confirmed in the North Sea at the end of the 1960s, the country effectively won a national jackpot. Yet Norwegian leaders understood early that the greatest danger was not scarcity, but excess. The real challenge would not be extracting oil, but governing wealth.

From the outset, Norway established a simple but decisive principle: 

Petroleum resources belonged to the nation as a whole.

This consensus was formed early, before large revenues arrived and before political habits hardened. Rules were written before pressure appeared. That sequencing proved decisive.

Rather than allowing oil income to flow directly into the domestic economy, Norway designed institutions to slow money down. The state imposed high but predictable taxes and retained direct ownership stakes in petroleum fields, ensuring national value capture while leaving day-to-day operations to professional firms. Over time, this model took shape through commercially run entities such as Equinor, combined with clear regulatory oversight and financial discipline.

The most important decision, however, was what not to do. Oil revenue was not treated as ordinary income. Instead, it was saved abroad, invested globally, and introduced into the domestic economy only gradually through strict fiscal rules. This prevented overheating, protected non-oil industries, and ensured that future generations would benefit from a finite resource. Norway chose patience over popularity.

Equally important was the separation of ownership from emotion. The state owned strategically, but governed calmly. Politicians set long-term boundaries rather than issuing operational instructions. Professional management, transparency, and accountability were not slogans, but structural requirements. This insulation reduced corruption, limited short-termism, and forced competence.

Venezuela’s Oil Trap

The contrast with oil-rich countries such as Venezuela is instructive. There, oil income became a shortcut to political power. Spending accelerated, institutions weakened, and savings mechanisms were repeatedly overridden. When prices fell, buffers were gone. Wealth arrived, but discipline did not.

Lessons for Vietnam’s long-term development.

For Vietnam, the lesson from Norway is not about oil. It is about timing, restraint, and institutional design. Vietnam’s future windfalls may come from foreign direct investment, land-value capture, strategic infrastructure, energy transition, or industrial upgrading. The source matters less than the response.

Norway shows the importance of acting early, before money reshapes incentives. It shows the value of separating state ownership from political impulse. And it shows that extraordinary income should be treated as temporary leverage, not permanent entitlement. Save first. Invest carefully. Spend slowly.

In Taoist terms, Norway practiced wu wei in economic governance: acting without forcing, governing without overreaching, allowing well-designed systems to function without constant intervention.¹ Wealth was guided, not chased.

Final Thought

History does not warn loudly; it teaches quietly. Norway’s experience shows that sudden wealth is neither a blessing nor a curse, but a test of judgment. By choosing restraint over speed and institutions over impulse, Norway allowed time to work in its favor. The present often urges nations to spend, expand, and celebrate too quickly. Yet lasting prosperity comes from balance, responsibility, and patience. To understand the challenges Vietnam faces today, it must first learn how others governed abundance before it governed them.

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Footnotes

¹ Wu wei (无为) is a core concept in Taoist philosophy, most closely associated with the Tao Te Ching. It does not mean “doing nothing,” but non-forcing or effortless action — setting wise structures early and allowing systems to operate in harmony rather than through constant control.

References

This article draws on publicly available sources and established literature on petroleum governance and economic development, including 

• Norwegian government publications on oil policy, fiscal rules, and sovereign wealth management; 

• Documentation on Equinor’s governance model; 

• Comparative studies on the resource curse; 

• Historical analyses of oil-rich economies such as Venezuela; 

• and broader academic and policy research on industrial policy, long-term growth, and demographic transition. 

All synthesis and conclusions reflect the author’s own interpretation, informed by historical comparison.

Authorship

This article is written by Dave Huynh, as part of an ongoing series on economic development and Vietnam’s future growth path. It is developed in collaboration with Amanda, an AI research and writing partner, who supports analysis, structure, and language refinement. All interpretations and conclusions remain the author’s own.

Series Note

This article is part of a series on historical development case studies, drawn as lessons for Vietnam’s future. Read the previous and next sections below:

• Previous: Section I: What Vietnam Can Learn from National Industrial Policy
• Next: Section III: Japan and South Korea — Catch-Up Growth Under Discipline (not publish yet)