Who Owns the State? A Contemporary Theory of Public Ownership

Image: Ververidis Vasilis / Shutterstock

In Greece, national assets are up for sale. Everything from Athens’ water infrastructure, to the Olympic stadium, to the country’s main ports at Piraeus and Thessaloniki. As part of the bailout deal struck in July 2015, the proceeds of these sales must go into an independent fund to repay Greece’s international creditors.

For many Greeks, this feels like selling off the family silver, only to hand the proceeds back to those demanding its sale. The programme was controversial, and only went ahead after major concessions, including that the privatisation fund be run from Athens and that part of its proceeds must be spent locally in Greece. Ultimately, the demand for local control and benefit was a plea for ownership.

Greece offers a more extreme but not isolated example, as the past decade has witnessed the resurgence of the ‘owner state’. Government economic intervention and national bailouts have signalled a new era of public indebtedness, whilst in other states oil revenues or trade surpluses have seen governments storing impressive levels of wealth in new Sovereign Wealth Funds.

Who is liable for state debts, and who benefits from state dividends? These are tough choices for governments, and raise pressing questions of political theory. Who is the rightful owner of state property: citizen, tax-payer or government? Can the state be an “owner” in its own right, or is it always merely a steward of others’ property?

By re-evaluating the classic theories of the state, and developing a new framework for the relationship between states and citizens, this project offers a practical framework which can guide the distribution of the benefits and burdens of the modern state’s public property. Based on extensive interviews with treasury officials across the globe – from key figures in Greece’s Syriza government, to off the record discussions with the managers of the UAE’s vast holdings, the value of which has never been disclosed, this research will provide practical solutions to difficult theoretical problems.


Project Objectives

The project answers the overarching question of 'who owns the state' by addressing four sub-questions, each with a distinct objective:

1. Descriptive Objective: What does today's 'owner state' own and how is this new?

2. Clarificatory Objective: What does existing theory on the state and public property in political philosophy say about the status of government assets and liabilities?

3. Theoretical Objective: Assuming state and property theory must be refined to accommodate the challenges posed by the contemporary 'owner state' to the citizen-state relationship, what would a modern framework of public ownership look like?

4. Prescriptive Objective: What does this new public ownership framework imply for the distribution of benefits and burdens of the modern state's public property?

The ultimate objective of this research is practical. The findings will produce an exposition of public ownership in theory and practice, and an updated conceptual model of state ownership to assist  governments and their citizens in leaveraging the full potential of state economic assets.

Project Outputs

Forthcoming book: Citizens' Wealth Why (and How) Sovereign Funds Should be Managed by the People for the People

Published 15 August 2016. Yale University Press

One aspect of the owner state phenomenon is the build up of substantial national capital in Sovereign Wealth Funds. These powerful and increasingly prolific entities transform the citizen-state relationship by amassing national capital in government hands, often outside traditional agencies of the state, for financial investment on behalf of the nation. Although more than two-thirds of the world's sixty sovereign funds came into existence since the year 2000, and collectively hold almost USD 7 trillion in assets, ethical analyses of the entities are sparse. Yet their organizational design, investment behaviour and distributional implications pose tough normative questions.

Political philosophers have resources to address these issues by asking fundamental questions about the purpose of the state and what this implies for government as an economic manager on behalf of its citizens. My forthcoming manuscript tackles these issues by exploring three key questions:

(1) how should government investors investing national capital in private markets be controlled;
(2) should the investment mandate of sovereign wealth funds be subject to higher ethical duties than that of private market actors given the public character of the national capital invested;
(3) to what particular uses should these funds and their returns be put?

To address these questions, the manuscript examines SWFs from the standpoint of ownership. Much definitional ambiguity exists in scholarly, regulatory and popular discourse regarding the ownership status of sovereign funds. Moreover, this uncertainty has translated into real-world rivalry between states and their citizens over sovereign wealth. Recent episodes of conflict have been observed in states as varied as China, Australia, Ireland, Chile, Nigeria and Libya. This suggests that neither economic development nor political regime type immunize communities from struggles over their sovereign wealth. Instead, competition over sovereign wealth is a product of the harmful ambiguity concerning the rightful beneficiary of national capital in sovereign funds, an ambiguity which this research seeks to dispel.


Blog posts:

A citizen’s income and wealth fund for the UK: Lessons from Alaska





Two reports published by the Belfer Centre at eth JFK School of Government, Harvard University as part of a series on institutions and policies for managing sovereign wealth funds.

Sovereign investor models: Institutions and policies for managing sovereign wealth, by Khalid A. Alsweilem, Angela Cummine, Malan Rietveld,  Katherine Tweedie


A comparative study of sovreign investor models: sovereign fund profiles, by Khalid A. Alsweilem, Angela Cummine, Malan Rietveld,  Katherine Tweedie