Cummine - Citizens wealth: why (and how) sovereign funds should be managed by the people for the people

CITIZENS WEALTH

This book sets out a compelling case for why governments investing public wealth on behalf of citizens have a duty to generate returns responsibly. Cummines thought-provoking analysis convincingly makes both the moral and practical case for responsible investment among sovereign wealth funds.

James Gifford, founder of the United Nations Principles for Responsible Investment and Senior Fellow, Initiative for Responsible Investment, Harvard Kennedy School

While over the last decade many rich nations ran up tremendous debts, others and several emerging countries accumulated huge stocks of assets. Having a sovereign wealth fund is a big help for macroeconomics; running it well is a big challenge for local politics. This book offers a useful account of how these funds have come into being and how they should evolve in the future. Recommended reading for policymakers all over the world.

Andrs Velasco, former Minister of Finance, Chile (200610), and Professor of International Development, Columbia University

How can the substantial assets of sovereign wealth funds be managed transparently, invested ethically, and used to fight inequality? With bold, accessible arguments Angela Cummine shows that the key is more democratic governance to ensure that sovereign citizens directly control the wealth in their fund and receive the benefits of it. Highly recommended.

Leif Wenar, Chair of Philosophy and Law, Kings College London

This book raises important questions about how the growth of sovereign wealth funds potentially affects the relationship between the state and its citizens. While some will have reservations about certain proposals in the book, this topic deserves the attention of researchers, citizens and policymakers alike.

Martin Skancke, Chair of the United Nations Principles for Responsible Investment (UNPRI) and former Director General of Norways sovereign wealth fund

Angela Cummines searching treatment of the topic and the inevitable politics that surround these funds provides an invaluable aide memoire for governments and their communities establishing or rethinking their sovereign funds.

David Murray, Inaugural Chair, International Forum of Sovereign Wealth Funds and former CEO, Australian Future Fund

It is rare to come across a book on SWFs that attempts to redefine the debate at the most fundamental level. Angela Cummines well-researched and ambitious work tries to do just that, raising a number of highly relevant and contentious points. Whether you agree or disagree with her analysis and conclusions, if you are interested in SWFs read it! It will force you to think through some of the most fundamental tenets of SWF design and management.

Andrew Rozanov, Associate Fellow, Chatham House and originator of the term sovereign wealth funds

Citizens Wealth makes a powerful case for reform in the sovereign wealth fund community. These giant sovereign funds play an outsized role in the global economy today but Angela Cummine questions if they truly benefit the peoples of their respective countries, and she demands they do more to resolve critical economic and social issues facing current generations. Citizens Wealth is a call to arms and a must-read for policymakers, professionals and citizens interested in the next chapter on how sovereign wealth should be managed.

Scott E. Kalb, Executive Director, Sovereign Investor Institute, Institutional Investor and former CIO and Deputy CEO, Korea Investment Corporation (KIC)

The topic of sovereign wealth funds is as dauntingly difficult as it is important in modern political economy. Angela Cummines treatment offers all that one could want in a normative analysis of this topic in particular, a detailed and compelling account of the institutional possibilities for democratic control of these funds. This is a fine and immeasurably helpful piece of work.

Jeremy Waldron, Professor of Law, New York University

Angela Cummines important new book show us what sovereign wealth funds are, where they have come from, what they have done, what they can do and what they should do. It is a brilliant and timely contribution to a debate about managing states finances that we all need to have.

Christopher Pierson, Professor of Politics, University of Nottingham

Angela Cummines fresh and compelling analysis of sovereign wealth funds shows how wise Norway was to create a sovereign fund and what might have happened if the UK had had the foresight to do the same when oil was plentiful and fetched a high price.

Iain McLean, Professor of Politics, University of Oxford and Vice President of Public Policy, The British Academy

Citizens Wealth is an excellent, timely and engaging examination of sovereign funds. It deals with the important issues of institutional design and governance of sovereign wealth to ensure effective management of public wealth in the peoples interest.

Dr Khalid Alsweilem, Former Head of Investment, Saudi Arabian Monetary Agency and Fellow, Harvard Kennedy School Belfer Center

This is a very well-written and well-researched book with a unique take on the role of sovereign funds in our economies, societies and indeed communities. Dr Cummine brings a fresh perspective on sovereign funds, adopting as her key lens of analysis and understanding an often underappreciated constituency and stakeholder: a countrys own citizens. She adeptly argues for the rights of citizens within and their key role in the management of sovereign funds. In so doing, she asks (and convincingly answers) questions that are very useful in clarifying the roles and responsibilities of these ever-popular government-managed (and citizen-owned) entities. Well worth reading!

Dr Ashby Monk, Executive Director, Global Projects Centre, Stanford University and author of Sovereign Wealth Funds: Governance, Legitimacy and Global Power

Angela Cummine in Citizens Wealth makes an informative, thorough, and aspirational case for the democratization of sovereign wealth. Students of sovereign wealth will benefit from her thoughtful presentation even if they do not agree with all of her well-articulated arguments.

Ted Truman, author of Sovereign Wealth Funds: Threat or Salvation, Senior Fellow, Peterson Institute for International Economics and Former Assistant Secretary of the US Treasury

Copyright 2016 Angela Cummine

All rights reserved. This book may not be reproduced in whole or in part, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press) without written permission from the publishers.

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Library of Congress Control Number: 2016023601

ISBN 978-0-300-21894-7

A catalogue record for this book is available from the British Library.

10 9 8 7 6 5 4 3 2 1

To my parents

for leading me to the starting gates

My sister

for encouragement from the sidelines

and

Christian

for seeing me across the finish line

CONTENTS

FIGURES AND TABLES

Figures

Tables

ACKNOWLEDGEMENTS

This book benefited from the help and guidance of multiple people and organizations. My greatest debt is to Stuart White at the University of Oxford. I am grateful for his mentorship and intellectual influence throughout the shaping and execution of this research. Also from the Department of Politics and International Relations (DPIR) within the university, I am appreciative of the advice and support at various stages of Iain McLean, Liz Frazer, Alan Ryan, David Miller, Marc Philp, Louis McNay, Marc Stears, Elizabeth Greenhalgh and Rasangi Prematilaka. Tommy Peto and Joshua Covas excellent research assistance informed Chapters 2 and 11 respectively. I am grateful for their detailed, timely help, as well as the DPIRs financial support which made their research assistance possible.