How Should States Own? Human Rights and the Fiduciary State Shareholder

Abstract

This research tackles a deceivingly simple question: How should states own companies in the global economy? A legal intervention into a perennial question of economic policy and political theory, the research examines the international regulation of state ownership across four key regimes that create, shape, and maintain state shareholders. Focused on European law, transnational corporate governance, international investment law, and human rights law, the research suggests the emergence of a distinct international set of rules pertaining to state shareholder power — the global law of state shareholders. Positioned against the rise of state ownership during the past decade, the research unearths a range of commonalities in this budding body of law but ultimately submits that the novel regulatory interventions extended within the human rights regime expose an emerging normative rift in the superstructure of state shareholder regulation. When compared to techniques and normative positions undergirding the more established regulatory regimes, a human rights reading of state ownership seems to enable a policy entry-point for using state shareholder power to mitigate pressing global externalities such as corporate human rights violations or climate change. Because the national state ownership arrangements are inherently complex, they have been heavily scrutinized already before the contemporary ascent of state capitalism. As a response to this empirical, methodological and normative plurality, the research relies on a three-tiered fiduciary metaphor to probe and simplify the descriptive, analytical, and normative dimensions of state ownership and its regulation. The descriptive metaphor, the fiduciary state, recounts the empirical changes in the form of state ownership and teases out the empowered state shareholder as the key actor in the contemporary global economy. The analytical metaphor, the fiduciary state shareholder, builds on this insight and deploys a scheme where the international regulation of state ownership is understood as an upshot of shareholder duties. Finally, the normative metaphor, fiduciary sovereignty, connects the reality of contemporary state ownership and its regulation with the recent theorization of the state as a fiduciary of humanity. The fiduciary metaphor suggests that the category of the state shareholder, as an instrument of both simplification and theoretical development, is emerging as an attractive descriptive, analytical, and normative lynchpin to gauge the vast terrain of new modes of state ownership. It provides a macro view on the abounding forms of state shareholder power that characterize the current global economy, taps into the concomitant projects that emphasize the economic and social potential of state ownership, and suggests a principled, if yet underdeveloped and diffuse, way to explain how states should own companies for the benefit of the global beneficiaries that ultimately amount to humanity.