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Topic: Economics & Geopolitics
Expertise: The Public Wealth of Nations
Dag Detter is a Fellow at Legatum Institute and Managing Director of Detter & Co. Previously he was the President of Stattum, the Swedish government holding company and Director of State Enterprises within the Swedish Government where he led the first transformation of state commercial assets. He specialises in identifying underperforming high-potential assets and advising in the acquisition/disposal process for private and public institutions.
The former investment banker and advisor to the private equity sector has also served as an advisor to the IMF, World Bank, IFC and the OECD on the development of state commercial assets. He was also an advisor within the corporate, real estate and financial sector in China and Europe. Dag has in-depth industrial experience and has served as Non-Executive Director on a number of boards of private and public companies including Telia the Swedish telecom company, Celsius, the European defence contractor and DTZ, the international real estate corporation. Born in Sweden, he holds a degree in Business and Sinology.
The Public Wealth of Cities: How to Unlock Hidden Assets to Boost Growth and Prosperity Hardcover – June 13, 2017 by
Crumbling streets and bridges. Poorly performing schools and inadequate social services. These are common complaints in cities, which too often struggle just to keep the lights on, much less make the long-term investments necessary for future generations.It doesn’t have to be this way. This book by two internationally recognized experts in public finance describes a new way of restoring economic vitality and financial stability to cities, using steps that already have been proven remarkably successful. The key is unlocking social, human, and economic wealth that cities already own but is out of sight—or “hidden.” A focus on existing public wealth helps to shift attention and resources from short-term spending to longer-term investments that can vastly raise the quality of life for many generations of urban residents.
A crucial first step is to understand a city’s balance sheet—too few cities comprehend how valuable a working tool this can be. With this in hand, taxpayers, politicians, and investors can better recognize the long-term consequences of political decisions and make choices that mobilize real returns rather than rely on more taxes, debt, or austerity.
Another hidden asset is real estate. Even poor cities own large swathes of poorly utilized land, or they control underperforming utilities and other commercial assets. Most cities could more than double their investments with smarter use of these commercial assets. Managing the city’s assets smartly through the authors’ proposed Urban Wealth Funds—at arm’s-length from short-term political influence—will enable cities to ramp up much needed infrastructure investments.
The Public Wealth of Nations – How Management of Public Assets Can Boost or Bust Economic Growth
The book shows that public wealth is vast and could be put to much better use. Most countries’ public wealth is larger than their public debt. While managing debt has become a matter of great concern during the financial crisis, public wealth remains opaque and largely ignored. The polarized debate between privatizers and nationalizers has missed the most important point – the quality of asset management. According to our calculations an achievable improvement in public wealth management would yield returns greater than the world’s combined investment in infrastructure such as transport, power, water and communications. This book explores how some countries are experimenting with institutional setups, such as National Wealth Funds that achieve sounder management and cleaner democracy.
Adrian Wooldridge, The Schumpeter Editor of The Economist
It is not every day that you come across a new idea in public policy. After the burst of creativity of the 1990s statecraft is becoming sterile. The left is retreating into the big government ideas of the 1970s. The right is failing to address the great problems of our time such as rising inequality. The left demonises the use of market-mechanisms to improve the state. The right demonises the use of the state to address market failures. At a time when tech-entrepreneurs are reinventing the world public policy-makers are reinventing the wheel. The idea of the public wealth of nations is just such a new idea. It identifies a problem that few people had realised exists. It shatters the tired categories of left and right. And it suggests a relatively pain-free way of boosting economic growth.
Best Books of 2015
Governments have trillions of dollars in assets, from companies to forests, but they are often poorly managed. Two investment experts explain how things could be improved by ring-fencing assets from political meddling in independent holding companies. Professional managers could sweat them as if they were privately owned.
Best Business Books of 2015 – Martin Wolf
The Public Wealth of Nations, by Dag Detter and Stefan Fölster, The public sector balance sheet does not only have liabilities. It also has assets. Managing those assets well is at least as important as managing the liabilities. Here the authors show how big, undervalued and mismanaged public assets generally are.
The CapX Top books of 2015
One of the most cheering reads of the year was The Public Wealth of Nations. The authors believe we are all richer than we think. They argue that most countries have a host of valuable assets but politicians are hopeless at maximizing them. If they were removed from the political arena, ring fenced in sovereign wealth funds run by experts, the profits would start flowing, whether from more efficient forestry or better utilized properties. The UK government is waking up to this but there is a lot further to go. Making the assets really sweat would yield far more than the £27 billion that was serendipitously discovered down the back of the sofa!
Patience Wheatcroft, Conservative Member of the House of Lords
The privatisation of government-owned assets has been a “thing” for so long now that it is easy to forget that states around the world still own trillions of dollars worth of land, buildings and businesses. In fact, according to this persuasive analysis by Dag Detter and Stefan Fölster, state-owned assets remain the largest pool of wealth in the world, worth twice the world’s total pension savings and ten times the total of all the sovereign wealth funds on the planet. Many of these assets are terribly managed. Yet if they were properly run, they would generate an annual yield of $2.7 trillion dollars for governments to spend, more than current global expenditure on transport, power, water and communications. Whilst I can quibble with some of the detail, but this book deserves serious attention from policymakers.
Matthew Bishop Senior Editor – The Economist Group