Who owns sovereign wealth funds? You or the government?

Guest Blog: Who owns SWFs? by Angela Cummine
This blog post is an interesting analysis of who really owns the sovereign wealth funds. If we expand that bigger, it is an analysis of who really owns the common wealth of a country.

"Despite the apparent ‘public ownership’ consensus, it is often not clear in what way the public of a given host country ‘owns’ its SWF."

"Academia, industry analysts and policy commentators echo this definition ad nauseam but with a little variety, referring to SWFs as ‘state-owned’, ‘government-owned’ or owned by ‘the nation’ in which they reside. To a political scientist, the terms ‘state’, ‘government’ and ‘nation’ are all distinct concepts, referring to unique entities. In the SWF debate, there is a sense that all these terms are used synonymously, as proxies for a more abstract idea of public ownership. Case closed.

But things are not so simple."

What it says about government and people is particularly educational:

"Government as an institution regularly conducts affairs that could be more easily understood as representing its own interests as a principal. It has overheads and responsibilities that attach to it which may require consideration of its institutional interest distinct from the public interest. It has concerns as an employer, contractor and financial entity that may be formed with little regard to the people it represents. We can therefore consider government as a unique, stand alone entity separate from its core identity as the representative of the people."

In short, the government and the people are not one.

Without good regulation, the government will eat up the people. The government will eat up the SWFs. This happened to Alberta's Heritage Fund.

There is a Confucius saying: a rogue government is worse than a fierce tiger.