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

When you look around the world it's almost as if Thatcher/Reagan economic revolution never happened. The largest pool of wealth in the world - a global total that is twice the world's total pension 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. And yet, while this is the largest pool of assets in the world, is also one of the murkiest - what goes on inside them is often not even properly known by the governments who own them. In most countries this vast portfolio is both a fiscal and political burden on society. If professionally managed it could generate an annual yield of 2.7 trillion dollars, more than current global spending on infrastructure: transport, power, water and communications. While traditional state control of assets has often proved inefficient, privatization is not always a panacea, as it offers opportunities for quick enrichment, crony capitalism, outright corruption, or dysfunctional regulation. To privatise or nationalise is simply the wrong argument. What matters is whether those assets are managed effectively - in a way that can generate a return that can fund the much needed investments in infrastructure that will boost overall economic growth. 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'. 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.

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

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 Folster is The Managing Director of the Reform Institute (a market-oriented think tank in Stockholm 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.

Review :
'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 Folster 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 Folster 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 government holding 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, and on 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