A citizen’s stake in sovereign wealth funds

Over the past five years, Sovereign Wealth Funds (SWFs) have become a prominent phenomenon in contemporary capitalism. Described as government investment vehicles that invest state wealth in financial markets, the majority of the world's 60-plus funds have been established since the year 2000. Despite extensive treatments of SWFs' geopolitical and international significance, ethical and domestic level analyses are sparse. In response, this thesis interrogates three key normative questions raised by the funds for the domestic citizen-state relationship: (1) How (and by whom) should sovereign funds be managed? (2) How should sovereign wealth be invested? (3) How should the earnings of sovereign fund investment be distributed? In answering these questions, this thesis aims to dispel ambiguity over the ownership status of sovereign funds, evident in popular and academic discourse and within communities that establish these entities. For this task, it draws on recently revived fiduciary theory of the citizen-state relationship to argue that the rightful owner of these funds is the citizenry - not states or governments who enjoy physical and legal possession of SWFs. It goes on to examine the implications of this fiduciary state conception of SWF ownership, asking how citizen-owners should enjoy control over and benefit from the distinct constituent parts of their SWF property: the institution of the fund, the underlying sovereign wealth and the financial returns earned on the investment of its assets. The model of citizen ownership defended demands substantially increased popular control over SWF management and the investment of sovereign wealth, as well as direct benefit rights for citizen-owners to fund income through individualised distribution of investment returns. Examination of existing practice among SWFs demonstrates that this normative ideal is far, although not impossibly distant from current institutional practice.