State ownership and innovation in the Norwegian corporate governance debate

Liberal philosophers have a clear position regarding the role of the State in economic life: The State should not own, nor run, it should only regulate. It should be the task of citizens to run businesses, the function of the State should be to put down the rules of the game, and to make framework conditions fair and predictable. In real life, government institutions play a significant role in business, both as owners, in running operations, and in specifying tailored rules for specific types of businesses. Most of the time, people at the government level interact with people from business in order to develop rules and regulations in ways that are compatible with the needs of business firms, today, and even more importantly, in the future. The relationships between the government institutions and the business firms are in reality very complex, and far from as impersonal and neutral as liberal philosophy and normative economic theory would like them to be. Debates on what role the institutions of the Government and the State should play in an economy are older than capitalism itself. Such discussions are a key feature of sociology, as well as the classical economics concerned with institutions and change. This is immediately obvious when the works of Marx, Weber, Schumpeter, Parsons and Habermas are considered. To discuss these various theoretical contributions is beyond the scope of this paper. Our focus is upon state ownership in a corporate governance perspective.