May 29, 2013

The Alaska Dividend, by Jay Hammond

Diapering the Devil: How Alaska Helped Staunch Befouling by Mismanaged Oil Wealth: A Lesson for Other Oil Rich Nations.
(From this book: The Governor’s Solution: How Alaska’s Oil Dividend Could Work in Iraq and Other Oil-Rich Countries. 2012)

This is a long story of the Alaska Dividend, written by Jay Hammond, the first leader of a citizen-ownership democracy.

It contains many gems. Here's one.
"Folk from elsewhere seem far more aware of a dividend program’s potentials than many Alaskan politicians who covertly hate it simply because if they can’t get their hands directly on those dividend dollars, it compels them to consider cutting budgets or advocating new taxes. Both actions demand intestinal fortitude, seemingly in short supply these days."
It has profound lessons for setting up a citizen dividend programme. Politicians will always want to use it for other things. Alberta's Heritage Fund died at the hands of politicians. Alaska's Fund survived when voters chase away politicians who tried to get their hands on the fund. Even when citizens are lucky to see such a fund, constitutional protection and continuous citizen vigilance are needed.

Here's another gem.
"The State of Alaska elected to put a portion of its vast Prudhoe Bay annual royalty revenue into a citizens’ Permanent Fund for investment in securities. Each year a dividend from this Fund is dispersed to every Alaskan citizen. This Fund was the first to recognize the full rights of citizens to share directly in the income from public assets." (Originally by Vernon Smith in WSJ)
A citizen-ownership democracy is a democracy that recognizes the full rights of citizens to income from common wealth (public assets). Oil is just one form of common wealth.

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