Affiliations: Research Director, Centre for Industrial Organisation and Economic Policy, Institute for Research in Economics and Business Administration (SNF), Breiviksveien 40, 5045 Bergen-Sandviken, Norway
Note:  Programme Coordinator, Centre for Industrial Organisation and Economic Policy, Institute for Research in Economics and Business Administration (SNF), Breiviksveien 40, 5045 Bergen-Sandviken, Norway. E-mail: Grete.Rusten@snf.no
Abstract: The Norwegian concessionary policy for managing water resources has recently been put under pressure. The immediate background is a lack of ownership neutrality: public companies obtain a concession with no time limit, whereas private companies are granted concessions with a time limit and a required reversion of ownership to the state after the concessionary period. This reversion is called the ‘hjemfall’. A hundred years ago, such a concessionary regime was deemed necessary to gain public control of an important natural resource. In this paper, we will place the Norwegian practice in a historical context and argue that ‘hjemfall’ represents an institutionalization of the old Roman law, which states that running water belongs to the public. We will also discuss the Norwegian government's options to respond to the increasing pressure against the current concessionary regime by the regulatory, institutional, and technological development that we have witnessed since the laws were passed almost a hundred years ago. Finally, we will discuss some of the challenges that a reform of the concessionary regime represents with respect to investment incentives and windfall gains and losses.