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This chapter explores European attitudes towards Sovereign Wealth Funds (SWFs). Following a brief survey of the specific characteristics and relevance of SWFs and the response that the increased economic importance of state-controlled foreign direct investment has received in the US, it outlines the general approach of EU law to the direct involvement of EU Member States in European markets. It then asks how the presence of non-EU states in European markets can and should be addressed under EU law.

This chapter comments on the discussion presented in Chapter 12. It argues that Sovereign Wealth Funds (SWFs) are neither market investors nor ‘imperialist capitalists’, but rather they operate under mechanisms that escape a traditional classification under Western typology. They are deeply interwoven with the political system they serve and show patterns both of market and political strategy. It concludes that the West does not have to fear most of the SWFs.

This chapter discusses the rise of Sovereign Wealth Funds (SWFs) as an example of the wider phenomenon of overseas state investment. It sets out the striking expansion in the number and financial size of SWFs, most of which are located in the Middle East and Asia, and then summarizes the lively debates about whether SWF investments are a threat to the West and how they should be regulated at the international level. It then considers the international legal and normative framework that has been created to regulate SWFs, as well as the key relevant elements of the EU’s policies and legal regulation. It concludes that there is little evidence that a binding international regulatory framework that strongly constrains the choices of recipient countries through law or norms has been established. Thus, much scope for national choices about policies towards SWF equity investments remains.

This chapter presents the overall picture of the state of the art of European company law after the 2007/08 financial crisis. Citing a number of examples, it warns that the crisis has brought a temptation for many Member States to lock up their markets. The most obvious example is the regulation of third-country Sovereign Wealth Funds; but also that states may link bail out payments and subsidies to policies of the failing companies to save jobs at home and give preference to national contract partners.

This chapter sets out the analytical framework of ‘internationalized statism’ developed and applied in the book. Although the West is said to be living in an age of internationalized ‘economic (neo-)liberalism’, where capital flows have been liberalized, a ‘new statist’ literature argues that the role of the state has not declined as it adapts and finds novel instruments and forms of action to govern economies. Building on new statist studies, the chapter introduces the concept of ‘internationalized statism’: policies to use foreign states to govern domestic economies. It develops the concept, notably by distinguishing between the extent and form of internationalized statism. It underlines that whilst most political economy studies have focused on private international capital flows, states themselves can use liberalization of financial markets to cross borders, offering new opportunities for policy makers in recipient states to find allies and resources for economic governance Policies towards equity investments bynon-Western Sovereign Wealth Funds (SWFs) offer an empirically and theoretically important example of internationalized statism: SWFs are large and growing; most SWFs are in non-democratic countries; equity purchases offer the potential for overseas influence or control over companies. The chapter then sets out the book’s research design: four country case studies are chosen because of variations in different relevant explanatory factors. It concludes that the concept of internationalized statism contributes to understanding how national policy makers use state economic internationalization to govern their domestic economies.

France has a popular and academic reputation as a state-influenced economy that is suspicious of foreign private investors, especially in strategic sectors and ‘national firms’. Yet this chapter shows that it has followed a strategy of directed internationalized statism, focused on attracting selected Sovereign Wealth Funds (SWFs) to specific ‘national champion’ firms and sectors. The political executive has welcomed SWFs, despite some parliamentary concerns over national security and a rhetoric of ‘economic patriotism’ that arose when private American firms sought to take over French ones. Although additional legislative powers for overseas investments have been created, they have not been used against SWFs. Instead, policy makers have used SWF investments to support domestic firms, notably by providing new sources of patient capital, supportive share owners, and export orders. The French case shows how policy makers can use overseas state investors as part of strategies to adapt longstanding policies of state-led industrial policies to liberalized and internationalized markets.

Comparison of the four countries shows that internationalized statism has developed in the UK, France, and Germany in ways that appear surprising given both popular and academic writings, although there are important cross-national differences in its forms. The US has seen the lowest level of internationalized statism, whereas the UK has pursued extensive and undirected internationalized statism. France and Germany occupy intermediate and more directed forms of internationalized statism. The findings cannot be fully explained by the Sovereign Wealth Funds’ (SWFs’) countries of origin and their choice of investments and also run counter to several expectations about the role of the state and general economic openness. Instead, the chapter offers a political and statist analysis of the growth of internationalized statism by looking within the state, notably at its structure, and the political strategies of policy makers. It also develops wider implications for political economy debates. The findings add to new statist arguments that the state is an active participant in internationalized and liberalized financial markets. Policy makers can use overseas state investors to pursue their domestic political strategies and adapt traditional forms of ‘industrial policies’. Internationalized statism shows that states can use developments in financial markets to find new resources and allies from overseas states to govern their domestic economies. By bringing in the state as an international investor, it shows how liberalization and internationalization can offer novel opportunities for states.

The global financial crisis demonstrated the vulnerability, if not failure, of existing governance structures for financial markets. Even if it is true that financial crises cannot be avoided, there may be room for improving existing structures. This chapter suggests that such an improvement might lie in switching from exclusive, hierarchical, and coercive forms of governance to inclusive, horizontal, cooperative ones—and uses the shorthand ‘contractual governance’ for the latter. Starting from the presumption that new forms of governance are frequently born in crisis, the chapter analyses several responses to the crisis and asks whether they display features of alternative forms of governance. It finds that some features of contractual governance can be found in all response strategies, but that in the end only one, the European Banking Coordinative Initiative, lives up to a full-fledged contractual governance regime.

Although also labelled a ‘liberal’ market economy, the UK has strongly pursued internationalized statism in stark contrast to the US. It has followed a ‘Wimbledon’ strategy of seeking to attract Sovereign Wealth Funds (SWFs) from all over the world even if they take large stakes in prominent British firms. Both formal and informal instruments have been actively used to welcome SWFs, who have taken significant stakes in leading British firms in strategic sectors and bought nationally symbolic buildings and brands. The UK has followed strong internationalized statism thanks to the dominance of the political executive in policy making that has allowed it to frame SWF investments in terms of economic governance rather than national security and the weakness of the legislature in raising concerns. Despite domestic privatizations, it has welcomed overseas state capital that has reinforced existing strategies of aiding privileged sectors such as finance.

This chapter examines some of the best-known suggestions for advancing justice when it comes to natural resources: resource taxes. It begins by addressing some general questions about when, why, and on what we should levy taxes. It also addresses some concerns about taxing natural resources in particular, and clarifies the role resource taxes can play in the egalitarian project. One of its principal conclusions is that a single undifferentiated global tax on natural resources is unlikely to serve justice well. The chapter therefore concludes with discussions of user charges on common-pool resources, carbon taxes, and a tax on Sovereign Wealth Funds.

The chapter outlines the state of play of state capitalism—the contribution of state-owned enterprises to the world GDP, employment, and output, their rankings in the top companies of the world, the evolution of thinking on state capitalism, and the reasons behind state ownership, state capitalism, and its different instruments. The influence of Washington consensus, the global financial crisis, and COVID-19 pandemic on state ownership is discussed. China’s rise is analysed through state capitalism and the developmental state. The chapter also outlines the evolution of thinking on state capitalism, the performance of SOEs and SOBFIs since 2012.