Gronland, a bustling neighborhood in central Oslo, may be the Platonic ideal of European multiculturalism. Outside a polling station on a pedestrian square, young couples — some Norwegian, others immigrants from Pakistan, Syria, Poland and Somalia — strolled along pushing prams.

Ayaan Aden, a 28-year-old student in a black headscarf, had just cast her vote for the opposition Labour Party. She was angry at the anti-Muslim rhetoric of Norway's immigration minister, who belongs to the populist Progress Party (FrP). "They're saying we're forced to wear the hijab," Aden said. "It's my own decision!"

The immigration minister, Sylvi Listhaug, had spiced up an otherwise dull campaign by traveling to Sweden and impugning its laxness toward migrants.

Labour, traditionally Norway's largest party, hoped her polarizing rhetoric would turn voters away from the government, a minority coalition between the Conservatives and Progress. It also promised a 15 billion kroner ($1.9 billion) tax hike to redress inequality and shore up government finances. It was a poor campaign strategy. When the polls closed on Sept. 11, Labour had 27.4 percent of the vote, its second-worst result in 93 years. Prime Minister Erna Solberg became the first right-wing leader to win re-election since the 1980s.

Norway still has Europe's most generous welfare policies, backed by its oil reserves and a sovereign-wealth fund. Smaller left-wing outfits did well in the election, especially the Centre Party, which caters to regional resentment against Oslo. There has been no overall shift to what Norwegians call the borgerlige partier ("bourgeois parties"); even Trond Helleland, the Conservatives' leader in parliament, calls their win "more a matter of a weakening of the Labour Party." That is a problem Labour shares with many of Europe's struggling social democrats.

But from an international perspective, the most interesting story was that of the Progress Party, once a libertarian fringe group. When it joined the coalition, many expected its support to collapse as it was forced to take responsibility for government policies. Instead, its vote share fell only slightly, to 15.2 percent from 16.3 percent in 2013.

Progress leader Siv Jensen serves as finance minister, and she shares political credit for Norway's strong economy and for the government's business-friendly tax cuts. The election cements the party's role as a serious player. That holds ­lessons for anti-immigrant populists across Europe and for other parties that need to deal with them.

"The Progressives are the most liberal and moderate populist party in Europe," said Kristin Clemet of Civita, a think tank in Oslo.

Their ideological roots differ from those of most other European right-wing populists. The Danish People's Party, the Sweden Democrats, the Finns Party (once known as the True Finns), France's National Front, Italy's Northern League and the Dutch and Austrian Freedom Parties have always been primarily about national identity. They have concentrated on opposition to immigration and Islam, and on resistance to the European Union, which Norwegians voted to stay out of in 1994.

The FrP shares these positions, but its main goal since its founding in the 1970s has been to shrink the welfare state. "They are very neoliberal, they very much believe in the free market and low taxes," said Cas Mudde, an expert on populism. In a country where the rest of the political spectrum backs generous benefits and a regulated labor market, Mudde said, that makes them a protest party.

Its focus on libertarian economics means the Progress Party has never been ostracized as other populists have. That may have helped Norway to develop a healthier debate. The Sweden Democrats, who evolved out of neo-Nazi groups, have been shunned by every other party, silencing Sweden's conversation on migration — and driving skeptics to the extreme right. Polls show they are now Sweden's second-largest party, with some 20 percent of the vote. "Sweden didn't take the cultural backlash seriously," says Bard Larsen, of Civita. "We [Norwegians] are more open about it."

Most populist parties find entering government traumatic. The Finns Party's support fell from 18 percent to less than 10 percent after it joined the coalition in 2015, and it has since split in two. The Danish People's Party has more or less run the country's immigration policy ever since the late 1990s, but has never joined a coalition, preferring supply-and-confidence deals.

The Progress Party, in contrast, has become a relatively normal coalition member.

Many see Listhaug's rhetoric on Islam as an effort to keep it in play. A ban on the full veil in schools is already expected to pass in parliament, and Listhaug wants to ban the hijab in elementary schools as well. "We need to fight the culture of social control and controlling women," she said. But the rest of the coalition opposes the idea.