Apr 1, 2013

Reforming Alberta's Heritage Fund: Lessons from Alaska and Norway

Reforming Alberta's Heritage Fund: Lessons from Alaska and Norway, by Jason Clemens and Robert P. Murphy.
"Alberta’s policymakers can learn much from the examples of Alaska and Norway. One obvious change in the Alberta fund would be the establishment of an explicit percentage of non-renew able resource revenues to be placed into the Heritage Fund, where they would be off-limits to cur rent spending. Another change would be the creation of realistic institutional safe guards to make these rules effective. If Alberta’s policymakers moved even modestly in this direction, future Albertans would be far richer because of the changes."
This is a very informative comparison of three citizen-ownership funds.
  1. The Alaska Permanent Fund
  2. Alberta's Heritage Fund
  3. Norway’s Government Pension Fund Global
The first is growing and giving good dividends to citizens/residents.
The second is a complete failure. It is not growing and is not giving dividends to citizens/residents.
The third is growing and growing, but not (yet) giving dividends to citizens/residents.

The main lesson is that the fund must be well protected by the Constitution, by carefully enacting laws that protect the growth of the fund and at the same time ensure dividends to citizens/residents. Only the Alaska Permanent Fund has this protection.

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