Weekend Reading

Ashby Monk

Benjamin A. Templin has just published a paper entitled “State Entrepreneurism” on SSRN. After an initial scan, it looks to be quite interesting and worth a more detailed read.

In short, Templin makes a normative argument for the creation of an American SWF. Specifically, he notes the potential benefits of transforming the Social Security Trust Fund into an SWF to shore up the solvency of Social Security:

“A properly structured SWF that adheres to the principles of state entrepreneurism could address one of the largest social issues facing American domestic policy – the impending insolvency of the U.S. Social Security Trust Fund.”

This an argument I am particularly amenable to. In fact, drawing on other countries’ experiences with pension reserve funds, I made a similar case last week.

1 Response to “Weekend Reading”


  1. 1 Ben Templin July 12, 2009 at 10:45 am

    Dear Dr. Monk,

    Thank you for the kind comments. “State Entrepreneurism” is the third in a series of articles that I have written on Social Security Reform.

    It seems that we are of similar thinking as to the funding problem. My first two articles have an analysis that is similar your comments about the Larry Summers interview at http://oxfordswfproject.com/2009/06/25/sstf-a-new-american-swf/

    In the first article, “Full Funding: The Future of Social Security” I make the case for transitioning from a PAYGO system to a system funded by a portfolio of diversified assets. The paper is located at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=904404

    In my second article, “The Public Trust in Private Hands: Social Security and the Politics of Government Investment” I discuss how such an investment fund could be structured to address the concerns of conservatives that Professor Summers mentioned — i.e. the fear that government investment will lead to meddling in corporate governance. That paper is at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=963534

    The third paper on “State Entrepreneurism” is a work in progress. In my view, the rise of SWFs and the increasing level of government investment as a result of the financial crisis presents a new opportunity for institutional change in the way we fund social security. Both formal rules and informal norms (and beliefs) about government investment are in the process of changing. Some call it “socialism” or a negative effect of the welfare state, but the more compelling analysis is that we are expreiencing a shift in the way capitalism works. The challenge will be to integrate government investment without losing the entrepreneurial spirit and innovation that is characteristic of a liberal market economy.

    It’s a pleasure to make your acquaintenance through this blog. I look forward to exploring it and your research in more depth.

    Best regards,

    Ben Templin
    Associate Professor
    Thomas Jefferson School of Law
    San Diego, California


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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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