Working Paper: CEPR ID: DP10920
Authors: Giacomo Corneo
Abstract: Current trends in the distribution of wealth trigger a social divide and threaten democracy. I propose to counter this evolution by enhancing the role of public capital as a redistribution and empowerment device. The governance of public capital requires two novel institutions: a socially responsible Sovereign Wealth Fund and a Federal Shareholder. This paper offers an account of their design and sources of financing.
Keywords: Public ownership; Redistribution
JEL Codes: H0; H5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increasing public capital (H54) | Reduction in wealth inequality (D31) |
| Establishment of a sovereign wealth fund (SWF) (G23) | Reduction in wealth inequality (D31) |
| Sovereign wealth fund (SWF) (G23) | Social dividend for all citizens (H49) |
| Establishment of a federal shareholder (FS) (G28) | Increased democratic participation (D72) |
| Federal shareholder (FS) (G28) | Counteract political influence of wealthy elites (D72) |
| Increasing citizen participation in the economy and politics (D72) | Reduction in wealth inequality (D31) |