A Global Picture of Public Wealth
https://www.imf.org/en/Blogs/Articles/2019/06/18/blog-a-global-picture-of-public-wealthThe IMF attempted to collect statistics on the book value of public commercial assets for 27 countries in a 2013 paper (IMF 2013). We added more countries in our 2015 book The Public Wealth of Nations. According to our estimates, public commercial assets are on the same order of magnitude as annual world GDP, which the IMF put at $75 trillion in 2013, and comfortably higher than world public debt of $54 trillion. At the city level, available valuation figures suggest the entire public portfolio of real estate within a city has the same value as the city’s GDP and represents a quarter of the total market value of real estate.
Although there are excellently run state-owned firms, such as Norway’s Statoil, these may be more of an exception. Studies by Bloom and van Reenen (2010), using detailed information on management methods, show that state-owned firms lag private firms considerably.
Comparison with some of the better professional institutions for governance of public commercial assets, such as Singapore’s Temasek, or pension funds managing similar assets suggests that much higher yields should be within reach. Consider, conservatively, an additional annual yield of 3 percent worldwide: this would amount to $2.7 trillion, more than current global spending on transportation, power, water, and communications infrastructure combined.
These data on public sector balance sheets also help governments actively manage their balance sheets. Better management of government assets could earn 3 percent of GDP in extra revenues each year—that is more than the interest payments advanced countries pay to cover their debt. There are a range of examples of countries doing just this: the United Kingdom spent several years compiling data and is currently undertaking a balance sheet review. Australia and New Zealand have also looked at the balance sheet effects of policies for years.
More recently, the IMF has used the public sector balance sheet approach in consultations with member countries, for instance in some of the Nordic countries. And investors and financial market experts have shown an interest in both the data and the tools, like fiscal stress tests, that use these data.
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