Academic

Created by General de Gaulle in October 1945, the founding principles of the Ecole nationale d?administration are to broaden access to the highest executive levels of government service, and to provide professional training for senior civil servants.
Hence, the school?s principal responsibility is to recruit and train the men and women who will make public service a living institution and enable it to adapt to ever-changing times. At the same time, the school must pass on the ethics of government service to its graduates, based on the values of responsibility, political neutrality and selfless service. (École National d'Administration, Meet ENA, A School for Government Service).

I. Thesis:
Sovereign Wealth Funds are symptomatic of the rise of four important and significantly different models of cultures of public governance and its administration:

(a) private actor model
(b) legal-juridical?law/rule based
(b) public policy/private execution-- public officials coordinating public and private sectors
( c) political?public sector privileged in private sector .

These models provide a useful window for understanding the ways in which emerging and fundamentally distinct framework assumptions about the nature of the state shape also shape the formation of assumptions about the appropriate role of public officials within states.

II: The Problem and its Context

A. Starting Point: Globalization
1. Free movement of capital
2. Borders become more porous but are not eliminated (freest movement of capital, services, enterprises and goods, but limited movement of people)
3. Economic markets populated by non-state actors are privileged
4. State role as regulator emphasized
5. Markets and actors become transnational
6. State regulation becomes commodified, a factor in the production of capital considered by enterprises in decisions about allocation of assets and operations.

B. The State in Markets: what happens to states when markets leak beyond territorial limits.
1. Regulatory role emphasized.
2. Participatory role limited to control of factors of production (capital, labor and consumption) within national territory.
     --Soviet economic model
     --Socialism "light" in post 1945 Europe
     --Fascist state corporatism
But nature of this role is contested:
     --Europe: private activities do not lose public character
     --U.S.: private activities by states can be undertaken without reference to public obligations of states
3. Limited participation in foreign markets
      --markets for capital (sovereign lending)
      --state intervention to protect currency
      --state intervention to adjust balance of payments asymmetries
     --conservative investment of funds in the currencies and debts of foreign states

C. The State in globalized Markets: possibilities for states seeking to participate in markets abroad.
1. With globalization of economic activity it is possible for non-state actors to organize their production to maximize aggregate wealth.
     --result permits the projection economic power well beyond the national borders of the states in which they are created and to
     --state regulation less effective on aggregate corporate operations; the largest and most operationally flexible corporations can effectively become self regulating.
2. Can states mimic the largest private corporations when it seeks to organize its economic activities beyond its borders? Rather than use its funds traditionally to invest in state activities or in foreign currencies or debt, states can also invest directly in private markets.
3. These market interventions challenge the role of the state, reflecting a consequence of globalization?the conflation of public and private functions of state (and also non-state) actors.

D. The role of the state as a transnational public or private actor becomes contested
     -- as a substitute for regulation, or
     --as a way to maximize national wealth or
     --as a means of projecting public power abroad through private markets for political goals.

E. In particular, state participation in transnational or foreign private markets and in the economic activity of other states directly changes the character of (1) the state, (2) of private markets and (3) of the character and role of public officials.
1. I have explored the first and second elements elsewhere.
2. I will focus on the third element, suggesting that the form of state participation in private markets through SWFs is critical to the development of distinct forms of public management culture.

III. Sovereign Wealth Funds as Systematized Institutions of Private Market Interventions
A. History
1. 1950s Kuwait financially insignificantly vehicle for management of quasi public wealth.
2. 1990s on?potent force for global activities of states and equally potent reaction in the form of calls for regulation and control.

B. Reaction among host states?shaping the universe of efforts to regulate.
1. Fear of protectionism at local level. If host states treat states differently from non-state actors in connection with market activities.
     --US; Europe, limited success in increasing regulatory intervention in activities of sovereigns investing in markets.
2. Failure of hard law at international level.
3. Soft Law approaches
     --Santiago Principles. Embrace of model of idealized private actor and ?best practices? as basis for avoidance of host state protectionist legislation.

C. Four generalized ?types? of Sovereign Wealth Fund, similarities and differences. Four distinct approaches to instituting Santiago Principles.
1. Singapore: state corporatism through a private enterprise model.
2. Norway: state corporatism through a normatively juridical model operated with the objective of advancing a set of global and national law norms invoking the mechanics of the conventional profit making enterprise for that purpose.
3. China: state enterprise operated with the objective of advancing state political policy through private enterprises. Conventionally private profit oriented enterprises directed in specific areas of operation by state policy needs and goals. Sovereign wealth fund as a state directed conglomerate controlling external investment and internal funding of outbound investment.
4. Brazil: division of government, least autonomous and most traditionally public in character. Provides greater flexibility for government to meet its fiscal obligations in a form that is most closely integrated with public and sovereign operations of the state. SWF is more of a sovereign ?debt? fund (?just a mechanism to shift around imaginary fiscal surpluses, which also only exist in the questionable way the so-called primary surplus target is calculated, since the country runs a nominal deficit of 3.3% of GDP? Tony Volpon, The rising BRL: Brazil?s sovereign debt, sorry, wealth fund to the rescue, Financial Times, 9-21-2010)

IV. SWF Models and Models of Public Governance and Administration Culture.
A. Singapore?implementation of non-state actor administration ideal
1. Santiago Principles Model: stricter division between public and private functions of the state.
2. Public administration separate from private administration of SWF.
3. Preserve traditional division between public and private spheres.
4. For the public administrator, the economic activities of the state remains the province of private sector specialists.

B. Norway?law/juridicalized model.
1. A public law model for private law activity.
2. The SWF is viewed as embedded in a global system of law that is at the center of its public and private sector activities.
3. The state has a positive obligation to enforce that law in its own actions and in the behavior of other states as well as private parties.
4. Economic activity privileges law and legality in both investment decisions and in the interaction of the SWF to its investments. Economic activities serve the objectives of the law-state.

C. China?integrating state and economy under the leadership of the Party.
1. The state is understood as the institution through which political and economic activity are harmonized.
2. State activity is undifferentiated between state and non-state sector activities.
3. Both public and private activities are meant to serve the greater objective of a coordinated effort for overall objectives.
4. Legal rules are meant to serve this objective; economic decisions are meant to serve the fundamental policy objectives of the state.

D. Brazil?political model; reclaiming the public element of non-state sector activity.
1. Economic activity is meant to serve political ends.
2. SWFs are understood as the opportunity to expand the range of traditional state practices in the protection of its economic position.
3. The view is internal. The objective is not so much to affect the world outside as to preserve the internal position of the state.
4. A political tool in which law and economics are tools. SWF given authority to invest in foreign currencies, for example.

A. The public administrator as bureaucrat.
1. Traditional role as regulator within conventional understanding of the role of state bureaucracies; state and non-state roles understood as distinct.

B. The public administrator as lawyer.
1. Traditional role bent to serve the object of law and legal rules.
2. Political and economic activity is grounded in the primacy of legal rules.
3. They limit the substantive and procedural scope of the operation of both state sector and non-state sector activities.
4. Process is emphasized along with the use of state to further legal integration.

C. The public administrator as coordinating political economist.
1. Traditional role bent to economic political economy.
2. The administrator serves as coordinator.
3. Private sector activity is directed in the service of the objectives assigned to it by the state.
4. State conceived as a space in which public and private activity is coordinated and the role of the highest level state officials to to manage this coordination.

D. The public administrator as politician.
1. Public function of the state is given primacy. Economic activity bent to internal political objective.
2. Public administrator serves the political classes
3. Object is to protect the state in the traditional sense.

The PowerPoint slides of my Portuguese language version, O funcionário público e o Fundo de Investimento Soberanos (SWF): Quatro modelos de governança pública em busca de coerência, can be accessed here.  I have included below an English language and a Spanish synopsis.