The Public Wealth of Nations: How Management of Public Assets Can Boost or Bust Economic Growth

by Dag Detter, Stefan Fölster

Overview

We have spent the last three decades engaged in a pointless and irrelevant debate about the relative merits of privatization or nationalization. We have been arguing about the wrong thing while sitting on a goldmine of assets.

Don’t worry about who owns those assets, worry about whether they are managed effectively.

Why does this matter? Because despite the Thatcher/ Reagan economic revolution, the largest pool of wealth in the world – a global total that is much larger than the world’s total pensions savings, and ten times the total of all the sovereign wealth funds on the planet – is still comprised of commercial assets that are held in public ownership. If professionally managed, they could generate an annual yield of 2.7 trillion dollars, more than current global spending on infrastructure: transport, power, water, and communications.

Based on both economic research and hands-on experience from many countries, the authors argue that publicly owned commercial assets need to be taken out of the direct and distorting control of politicians and placed under professional management in a ‘National Wealth Fund’ or its local government equivalent. Such a move would trigger much-needed structural reforms in national economies, thus resurrect strained government finances, bolster ailing economic growth, and improve the fabric of democratic institutions.

This radical, reforming book was named one of the "Books of the Year".by both the FT and The Economist.

Product Details

ISBN-13:	9781349704903
Publisher:	Palgrave Macmillan UK
Publication date:	09/16/2017
Edition description:	1st ed. 2015
Pages:	230
Product dimensions:	5.51(w) x 8.50(h) x (d)

About the Author

Dag Detter is an advisor to investors in Europe and Asia, specialized in identifying under-performing high potential assets. As President of Stattum, the Swedish government holding company, and a Director at the Ministry of Industry, he led the first deep-rooted transformation of state commercial assets. He has worked extensively as an investment banker and advisor within the corporate, real estate and financial sector in Asia and Europe.

Stefan Fölster is The Managing Director of the Reform Institute (a market-oriented think tank in Skholm with a focus on innovative reforms). He was previously the Chief Economist for the Confederation of Swedish Enterprise. He has authored many articles and books, for example the recent Renaissance of Reforms published jointly by the IEA and Timbro.

Table of Contents

1. What can public wealth do for you? 2. Don't rock the boat and the hand that feeds you - the cost of poor management 3. How state run business can ruin the economy and politics 4. The size and potential of public wealth 5. Attempts to reform management of public wealth 6. Active owner or Privatise - Swedish and Asian pioneers vs Thatcher 7. Monetising yields value, and improves democracy as well 8. The anatomy of National Wealth Funds 9. Strategies for creating value 10. We all want to build roads now but can we afford it? 11. How politicians can become consumer advocates instead of quasi-capitalists

What People are Saying About This

From the Publisher

'Public wealth is vast, but largely overlooked as an asset class. Improving its management is one of the most important economic issues of our time. Dag Detter and Stefan Fölster shed much light on the subject. One can only hope that their book will kick-start a debate that ushers in better stewardship of state land, buildings, utilities and other assets. The potential gains are enormous.'

-Matthew Valencia, The Economist

'At a time of mistrust in traditional politics and weak public finances, Dag Detter and Stefan Fölster show politicians the way to demonstrate they are on the side of the people and to manage government assets better. There should be no excuse for those in power to dismiss these ideas.'

-Chris Giles, Economics Editor, Financial Times

'Better government handling of public assets is, or should be, a key issue in many countries. With his background as a former Director at the Ministry of Industry and former President of Stattum, the Swedish governmentholding company, Dag Detter can speak with great authority and depth of practical experience on the alternative approaches which governments might take. The Public Wealth of Nations is an important contribution to a debate of vital concern to governments across the world.'

-Lord Sassoon, former Commercial Secretary, HM Treasury

'This provocative book is a wake-up call for governments to become more responsible in managing their citizen's wealth and securing the foundation for future generations.'

-Marcel Fratzscher, President of DIW Berlin, Professor at Humboldt-University; Member of the Advisory Council of the Ministry of Economy of Germany

"In this important book, the authors convincingly argue using many examples that, like with pension funds or even households, an asset-liability approach is needed for public finance as well. They show that intelligent management of public assets can have a huge impact on government revenues, creating room for tax cuts, andon economic growth.'

-Dr. William De Vijlder, Group Chief Economist, BNP Paribas

"This important book shows the way forward in turning the latent Public Wealth of Nations into actual riches.'

-Willem H. Buiter, Global Chief Economist, Citi

Editorial Reviews

I recommended Detter and Folster’s The Public Wealth of Nations, a smart read that pulls data and management strategies from throughout the globe in order to argue for ways we can add value to public assets and hence increase economic growth.” (The Philadelphia Citizen, thephiladelphiacitizen.org, December, 2016)

“Detter (formerly, Swedish Ministry of Industry) and Fölster (Reform Institute, Sweden) contend that democracy works best when governments have little direct access to public wealth. … The authors present a compelling argument that better management of publicly owned assets would improve economic welfare … . Summing Up: Highly recommended. Upper-division undergraduates through faculty.” (R. E. Schenk, Choice, Vol. 53 (12), August, 2016)

From the Publisher