Trends in quantitative economic planning in Norway

This article was first published inSosialøkonomen, February, 1965. It has been translated from Norwegian into English by Mrs. Janet Aagenæs, Central Bureau of Statistics. Good friends in the Ministry of Finance and the Central Bureau of Statistics have been kind enough to read the Norwegian version of this article in manuscript form, and they have made valuable comments or suggested improvements.

As a curiosity it can be mentioned that at the University of Oslo's Institute of Economics there is a note filed away written by Professor Ragnar Frisch, dated January 29, 1940, and being entitled “National Budget” (as opposed to national accounts). Frisch at that time was thinking of making estimates for Norway similar to those which Professor J. M. Keynes had published for Great Britain relating to the supply and use of real economic resources. When the Ministry of Finance began the project in the autumn of 1945, the name national budget was copied from Frisch.

The production budget was specified by 13 industries and the investment budget by 12 industries for the year 1947. The latter was further specified by 4 kinds of investments and 3 owner groups. Moreover, the export budget was specified by 16 commodity groups, the import budget by 18 commodity groups and the budget for private consumption by 12 commodity groups. The group consisting of food commodities in the budget for private consumption was further specified by 15 sub-groups. The import licence budget, as well as the budget for building licences and building materials, had about the same grouping by industry as the investment budget. The import licence budget was first published after 1949 inclusive, and it was then that the commodity specification for budgeted delivery of imports was omitted.

The effects of the government budget on disposable income and savings for enterprises and consumers were, to a certain extent, analyzed in the Storting report on the national budget for 1948. The national budget publication for 1949 indicates that for this year, additional progress was made in this way, and that, in addition, an attempt was made to analyze the government budget's effect on credit. Beginning with 1950 the central government's income was discussed in a separate section of the national budget publications. Beginning with 1953 the tax policy was discussed more explicitly, and beginning with 1958 a table was included showing, inter alia, tax revenues expressed as a percentage of gross domestic product.

St. meld. (Storting report) nr. 1 (1953), p. 54.

See:St. meld. (Storting report) nr. 75 (1952).

Kredittmarkedsstatistikk (Credit Market Statistics) 1955, NOS XI 281.

St. meld. (Storting report) nr. 43 (1950), p. 3. A corresponding report in 1947, which coincidentally also has the number 43, wasnot presented as a supplement to the Storting report on the national budget.

The preparation of plans for the use of direct controls were, of course, discontinued as the controls were gradually abolished. The last time an import licence budget was published with groupings by principal commodities was in the national budget publication for 1951; for later years only a total estimate for licenced imports was published as long as this was of a noteworthy magnitude. In a corresponding manner the scope of the building licence budget was reduced as more and more areas became exempt from building regulation. The last budget for building licences and building materials which covered most of the building activity, was included in the national budget publication for 1965. Since that time only program figures for the quotas which the County Supply Boards could allocate, and for the few areas of building activity regulated through a central allotment of building licences, have been published.

The specification by industry for the years 1961–1964 was entirely omitted inSt. meld. (Storting report) nr. 1, but included in a report on the execution of the national budget.

The transfer was, of course, also related to the abolition of direct controls.

Ragnar Frisch: Økosirksystemet (The Economic Circulation System),Ekonomisk Tidskrift, 1943, pp. 106–121.

At that time the Central Bureau of Statistics used the terms value added concerning the gross domestic product and net real income about the net domestic product. See:Nasjonalinntekten i Norge (National Income in Norway)1935–1943, NOS X 102.

See: Reperkusjonsanalytiske problemer som kan studeres på grunnlag av vare- og tjenestetilgangen oppdelt etter tilrekningsandeler, hovedkategorier av goder og næringssektorer (Analytical problems of repercussion which can be studied on the basis of the supply of goods and services classified according to accountable shares, major categories of benefits and industrial sectors). Professor Ragnar Frisch's lectures, autumn semester 1952, further elaborated in spring semester, 1953. Memorandum from the University of Oslo's Institute of Economics, Oslo, November 6, 1952.

Per Sevaldson: Kryssløpsanalyse av produksjon og innsats i norske næringer 1954 (Input-Output Analysis of Norwegian Industries 1954),Social Economic Studies, nr. 9, Central Bureau of Statistics of Norway, Oslo, 1960.

The first results were printed inStatistiske Meldinger (Statistical reports), nr. 2, 1955, pp. 39–55. See also: A Preliminary Report on Regression Studies of Consumers Expenditures in Norway, Central Bureau of Statistics, May 1958, (stencilled);Forbruksundersokelsen (Survey of Consumer Expenditures) 1958, Part III NOS A 41, 1961; Arne Amundsen: Metoder i analysen av forbruksdata (methods in the Analysis of Consumer Data),Artikler nr. 6, Central Bureau of Statistics, Oslo, 1960; and Arne Amundsen: Konsumelastisiteter og konsumprognoser bygd p∢ nasjonalregnskapet (Elasticities of Consumption and Forecasts of Consumption Based on National Accounts Data),Artikler nr. 7, Central Bureau of Statistics, Oslo, 1963.

A more detailed and precise clarification of the model utilized in the preparation of the national budget for 1961 is given in Per Sevaldson: En produksjons-konsumkryssløpsmodell for økonomisk planlegging i Norge (A Production-Consumption-Input-Output Model for Economic Planning in Norway),Statsøkonomisk Tidsskrift, 1962, pp. 69–98.

Arne Amundsen: Vekst og sammenhenger i den norske økonomi 1920–1955 (Growth and Interdependence in the Norwegian Economy),Artikler nr. 2, The Central Bureau of Statistics of Norway, Oslo, 1957.

Petter Jakob Bjerve:Planning in Norway, Amsterdam, 1959. Contributions to Economic Analysis, 16.

The author presentedmodis ii in a lecture held at Statsøkonomisk Forening in December, 1965. The lecture has been published in the seriesArtikler from the Central Bureau of Statistic, no. 18, 1966: Teknisk revolusjon i økonomisk analyse og politikk? (Technical Revolution in Economic Analysis and Policy?). See also Arne Øien:modis ii. En samfunnsøkonomisk modell med kryssløps-, konsum-og prisrelasjoner (An Economic Model with Interindustry-, Consumption-, and Price-Relationships),Working Papers, Central Bureau of Statistics, Oslo, February, 1966.

An account of this model is given in Ragnar Frisch: Els∢smodellen og dens utbygging for programmeringsform∢l (The Els∢s model and its amplifications for programming purposes), Memorandum for the Institute of Economics, Oslo, March 15, 1959.

See Petter Jakob Bjerve: Ziele und Mittel der Norwegischen Kreditpolitik,Kieler Vorträge 1963, pp. 14–15.

Lists of the memoranda on the problems of planning have been prepared by the Institute of Economics and are provided in Ragnar Frisch: The Oslo Refi Interflow Table (Memorandum from Institute of Economics, Oslo, June 27, 1960) and Ragnar Frisch: Preface to the Oslo Channel Model, A survey of types of forecasting and programming (Memorandum from Institute of Economics, Oslo, October 22, 1961).

In December 1964 by governmental decree all ministries and important governmental institutions outside the ministries were to appoint liaison men for the national budget work. These contacts shall be responsible for part of the functions previously held by the members of the National Budget Committee.

In the long-term program for 1958–1961 the instruments were neither discussed verbally. The Storting reports on the long-term program for 1954–1957 more or less described in detail the developments in various parts of the country. A corresponding analysis was published for 1958–1961, but to a much lesser extent, and in the Storting report on the long-term program for 1962–1965 this analysis was completely omitted. Instead, this report provided a survey of the measures which were effected and of the adoptions to develop the districts as well as a brief presentation of the guidelines for the district development policy in the future.

St. meld. (Storting report) nr. 54 (1960–61), pp. 162–164.

See Petter Jakob Bjerve: Den konjunkturpolitiske handlefridomen i finanspolitikken (Cyclical Policy and Freedom of Action in Fiscal Policy),Sosialøkonomen, Oslo 1962, pp. 4–12.

By first obtaining a long-range sector plan adopted after isolated discussions in the Cabinet, they could get into a strong bargaining position toward the Ministry of Finance regarding certain budget items.

St. meld. (Storting report) nr. 69 (1952), p. 2, andSt. meld. (Storting report) nr 47 (1954).

It can be mentioned that the Divisions for regional planning in the North Norwegian counties took part in the preparation of the development program for North Norway which the Ministry of Trade presented to the Storting in 1951, and the Division for regional planning in Trøndelag took part in the preparation of a corresponding development program for the coastal regions of these counties. See:St. meld. (Storting report) nr. 85 (1951).

St. prp. (Storting proposal) nr. 1Tillegg (Supplement) nr. 1 (1962–63).

The comparisons between the budget and the accounts were otherwise considerably easier after the real economic items in the national budget after 1952 inclusive were evaluted both at the prices applicable at the end of the year and at average prices for the preceding year.

St. prp. (Storting proposal) nr. 1.Tillegg (Supplement) nr. 1 (1962–63).