Category Archive: Uncategorized

  1. Who Will the Green Transition Save?

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    The Camaçari Industrial Complex in Bahia attracted worldwide attention following BYD’s announcement in 2023 that it would be home to the electric vehicle company’s largest factory outside China. Inaugurated in 1978, the industrial hub was Brazil’s first planned petrochemical complex, forming the centerpiece of a national industrial development project that ran until the end of the 1980s. The complex has historically contributed to economic development in the region by generating employment and providing job training opportunities. From the 1990s onwards, however, amid the liberalization of trade and rise of foreign competition, the complex underwent significant structural changes. 

    Camaçari has always hosted industries that complement the petrochemical chain, but its twenty-first century expansion was sparked by the arrival of the automobile industry. American automaker Ford set up shop in the 2000s, but after two decades of operation, Ford closed its doors in 2021 and halted production of the low-margin light vehicles EcoSport, T4, and the Ford Ka. Today, the complex is undergoing yet another process of sectoral expansion, attracting investments from electric vehicle manufacturers and renewable energy companies, mostly of Chinese origin. Emblematically, the new BYD factory is being built on the former Ford site, with its address on Avenida Henry Ford.

    Over the years, the petrochemical center first emerged as an industrial center, and it is yet again poised to transform into a green industrial center. Alfredo Santos is the General Secretary of CUT-Bahia and press coordinator for the Chemical, Petrochemical, Plastics, Fertilizers and Chemical Terminals Workers’ Union (Sindiquímica). In the following interview, Santos speaks with Phenomenal World editor Maria Sikorski about Camaçari’s role in Brazil’s project of green reindustrialization from the perspective of the working class. The transcript has been edited for length and clarity.

    An interview with Alfredo Santos

    Maria Sikorski: Can you tell us about the history of the Camaçari complex and its relationship to Brazilian industrial policy?

    Alfredo santos: The Camaçari complex was built between the mid-1970s and the early 1980s. It emerged as a tripartite ownership model: the shareholder composition included national private capital, multinationals, and Brazilian state capital. A raw materials plant controlled by a public company, Copene, which was later privatized, promoted second-generation industries. The petrochemical plant supplied the basis of the production chain for naphtha, ethylene, propylene, etc. The tripartite ownership model is an example of how industrialization in Brazil has only occurred with strong state participation, either directly, as was the case with the Camaçari complex, or indirectly, through Brazilian Development Bank (BNDES) financing. Both when the complex was first set up and today, private companies—including Chinese companies that have recently set up shop—have received funding from the Bank. It is the Brazilian state that finances industrialization.

    Camaçari continued to grow throughout the 1980s and 1990s. However, since the opening up of trade under the Collor government (1990–1992) and more markedly during the government of Fernando Henrique Cardoso (1995–2002), the complex has faced a crisis of productivity and international competitiveness and as a result has suffered from reductions in investment and factory closures. At the beginning of the 1990s, the complex accounted for more than 30,000 direct jobs. By the end of the decade, the number had fallen to just over 10,000.

    From 2003 onwards, with the first Lula government (2003–2010), the Brazilian state once again invested in industrialization, but indirectly: Petrobras became an important investor in Brazil’s so-called “big players.” One outcome of this process is Braskem—Petrobras now holds 47 percent of the company’s shares. Some international competitiveness has been regained, but the production of central raw materials and the thermoplastic resin chain has been increasingly monopolized, resulting in the closure of several companies that were unable to compete with the big players.

    The Brazilian petrochemical sector today faces a massive crisis. The Camaçari complex is unable to compete internationally. The fertilizer sector is a case in point: 85 percent of the fertilizers used by Brazilian agribusiness are imported. The thermoplastic chain imports around half of the inputs it uses. This influx of imported products into the petrochemical chains happens for two reasons. The domestic cost of the chains has become very high compared to more modern chains that are gas-based instead of naphtha-based. The US, Arab, and Indian industries export a product at a lower price than our domestic production cost, both because of the lack of technological advancements in our plants and because of environmental factors: the US, for example, uses gas from fracking, which has a much lower production cost, but is extremely damaging to the environment. Brazil does not produce gas from fracking and even has environmental restrictions on its use. What’s more, the price of Brazilian natural gas is up to five times higher than the US price. This undermines the international competitiveness of our petrochemical industry. If the country doesn’t have an industrial policy aimed at preserving the domestic market, the tendency is for all these industries to go under.

    MS: Bahia has been identified nationally and internationally as an essential part of Brazil’s green reindustrialization project and the global energy transition. It is the state that produces the most renewable energy from solar and wind sources in the country and has attracted a lot of foreign investment, especially Chinese, in these production chains.

    With the promise of BYD’s electric car manufacturing and the installation of other Chinese companies in the renewable energy sector, some say that Camaçari could become a catalyst for the green reindustrialization of Brazil. When announcing the installation of the factory on the former Ford site, for example, BYD promised to bring high value-added stages of the electric vehicle production chain to the complex, including those related to research and development, as well as generating thousands of jobs. BYD’s CEO for the Americas, Stella Li, stated that the aim was to turn Camaçari into a “Brazilian Silicon Valley.”

    Amid a crisis in the petrochemical sector, does the entry of other supply chains represent a resumption of Camaçari’s role in national development?

    as: The Ford plant, inaugurated in 2001, represented the start of the automotive chain in the Camaçari complex. In 2021, after twenty years, Ford closed its operations and more recently Chinese companies such as BYD have started to invest in the auto supply chain. Other Chinese companies in the renewable energy sector, such as Sinoma and Goldwind, have also set up shop in the complex. The process of attracting BYD to Bahia involved a significant amount of state subsidies. The government of Bahia made electric cars exempt from the motor vehicle ownership tax (IPVA) from 2024, for example. BYD also received public incentives for utilizing the land that belonged to Ford, and the company also received funding from the BNDES. 

    Although the BYD plant is promised to actually function as a factory, right now, these companies are only operating as assemblers, practically maquiladoras. The higher value-added stages of the supply chain are not yet in Bahia. The petrochemical complex has great potential for battery production, but the batteries for these vehicles have yet to be produced here. There’s also a potential for lithium processing, as well as in the plastics industry for the production of parts. It is possible to produce the cars here, but so far BYD’s promise has not materialized.

    What can we demand from these companies to accompany the state subsidies? This is the role of the Brazilian state in the project of reindustrialization. If BYD only sets up mere assembly plants, what do we get out of it? Now, if the state demanded that, within a certain period of time, BYD process lithium in Brazil and manufacture batteries here, that it use local industries to manufacture parts, that it actually have parts of the production chain operating here, things would change.

    In the past, there was a similar debate in the petrochemical industry. The national content policy for the oil product stream—abandoned after the 2016 coup—required every industry that provided services to Petrobras to have a percentage of its machinery produced in Brazil. The country’s shipbuilding industry was reborn during that period and, when local content was no longer required, it broke down again.

    Brazilian industry can’t compete without some form of state incentive. There is no industrialization without state participation. If the industrialization project doesn’t require counterparts to foreign investment, be it American, Chinese or from anywhere else, Brazil will simply play a role in another country’s industrial policy. No company decides to expand its operations to another country altruistically. If it invests, it’s because it serves its own interests. And investment, from whatever source, is always good. The question is what we demand of investors in order to satisfy national interests as well.

    For many years, Brazilian industrialization was very dependent on the United States. If we simply replace US imperialism with Chinese imperialism, we’ll end up with the same result. We can’t simply cater to the interests of those who want to invest. Foreign investors want to make a profit. What does the country gain when it subsidizes their profit-making?

    MS: How does the Bahia trade union movement view the role of the New Industry Brazil (NIB) program in promoting the national interest in the country’s green reindustrialization project?

    as: So far, NIB is just a plan on paper. It’s difficult to analyze without observing the real impact through data, and the program hasn’t yet shown what it will become. But one thing that’s important to keep in mind when talking about green industrialization is: who pays the price?

    In the trade union movement, we jokingly say, “Well, alcohol is a cleaner fuel than gasoline, but I’d rather work at Petrobras than in the alcohol industry.” The green industry cannot be made economically viable by reducing the cost of the workforce. What we have seen is that the supposedly most sustainable sectors of the industry today are the ones with the most precarious jobs. If biodiesel has a higher production cost than diesel, how do you ensure that the green alternative reaches the pump at the same price? By making the workforce in the biodiesel production chain more precarious. That’s impossible!

    This contradiction exists not only in Brazil, but all over the world: the dirty industries, the oldest ones, are the ones that offer the best working conditions, including from the point of view of workers’ health. You only have to look at the working conditions in a sugar cane mill or in the aluminum recycling industry with can collectors. Someone might say that waste pickers aren’t part of the recycling industry, but the fact is that the recycling industry only exists in Brazil because of waste pickers. Brazil is the record holder in aluminum recycling, not because it has a great logistics project, but because there are a lot of impoverished people who need to collect cans to survive and who, in doing so, foster a production chain that is extremely profitable.

    Electric cars are another example: due to the technology used, the sector generates far fewer jobs than the combustion car industry. It’s much simpler engineering: the electric vehicle has a body, battery and engine, while the combustion car has oil, a belt, filter, head, piston, connecting rod. In short: several other factories are needed to supply products and parts for this industry.

    The trade union movement’s criticism of renewable energy chains follows the same line. Today, Bahia is the state that produces the most clean energy in Brazil and basically “exports wind” to the South and Southeast of the country without any compensation for the communities where the wind farms—which have a huge social and environmental impact—or the solar panels are installed. At the same time, the parts of the production chain that generate the most jobs, such as the manufacture of turbines, photovoltaic panels and maintenance parts, are not here. We are left with the worst part of the whole supply chain: the one with the greatest impact and lowest return. This is a localized reproduction of the same dynamic that can be observed between countries at the center and periphery. Will the role of the Northeast in Brazilian industrialization be reduced to generating energy and carbon credits to be consumed in the South and Southeast? The Northeast is the region in Brazil that produces the most solar energy, but it doesn’t have a photovoltaic panel factory.

    In the same vein, I believe that the NIB needs to include a geopolitical discussion about Brazil’s green industrialization objectives. Are we going to pay for the energy transition of the countries that have historically polluted the most? Will our role be to generate clean energy and carbon credits for the countries of the global North to consume? Once again, it’s the weaker that end paying for the energy transition. So far, it seems that the lowest value-added, least complex and least job-generating parts of the green production chains are those in Brazil or other peripheral countries. This is the persistent international division of labor. The most precarious jobs stay in the periphery and the most technologically-advanced and well-paid jobs stay in the center of capitalism. The NIB needs to engage in dialogue with the Chinese interest entering Brazil, for example, to demand counterparts to the state subsidy that would reverse our subordinate role in the international division of labor.

    Obviously, we are in favor of promoting green industry, but we argue that it should come with state funding. The state, not the worker, should pay for the transition. When the economic viability of biodiesel comes from the precariousness of the workforce, the state is making the worker pay for the energy transition. On the contrary, we advocate for a truly just energy transition.

    MS: So how would you summarize the trade union movement’s demand for Brazil’s green reindustrialization?

    as: The trade union movement’s demand is that green industrialization should not lose sight of the fact that workers are a fundamental part of this process. The quantity, quality, wage, and other conditions of these jobs generated through green industrialization must be equal to or better than what was observed in previous industrialization processes. Under no circumstances can we continue to use job insecurity as a mechanism to make green industry economically viable. The energy transition needs to happen, the planet can’t wait, but it needs to happen bearing in mind that workers are also part of the environment. If we sacrifice workers, who will the transition save?

  2. The Unentitled Graces

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    ALGORITHMIC RENTAL PRICING

    This Tuesday, expanding upon an antitrust lawsuit filed in August against the company Realpage, the Department of Justice sued six of the largest landlords in the US, with ten states’ Attorney Generals acting as co-plaintiffs. Realpage offers its customers a rental price-setting algorithm for efficient property management, which has provoked allegations of cartel-like behavior among landlords. 

    A 2020 paper by EMILIO CALVANO, GIACOMO CALZOLARI, VINCENZO DENICOLÒ, and SERGIO PASTORELLO considers the potential consequences of algorithmic pricing on antitrust policy:

    “Today, the prevalent approach to tacit collusion is relatively lenient, in part because tacit collusion among human decision-makers is regarded as extremely difficult to achieve. While we have no direct comparative evidence for algorithms relative to humans, our results suggest that algorithmic collusion might not be that improbable. If this is so, then the advent of algorithmic pricing could well heighten the risk that tolerant antitrust policy will produce too many false negatives.

    On the other hand, algorithmic pricing may open the way to new forms of antitrust intervention. When they suspect collusive conduct, agencies and the courts can subpoena and test pricing algorithms in environments that closely replicate the particular industry under investigation. With humans this was not possible, so the risk of aggressive antitrust enforcement producing too many false positives may be reduced. Therefore, the advent of AI pricing could alter the balance between the two types of error, possibly calling for policy adjustment.”

    +  Martin Spann et al. provide an extensive review of algorithmic pricing literature. Link. And see Akil Vicks on San Francisco’s banning of revenue management software for rental housing and the housing crisis more broadly. Link.

    +  See Curbed’s coverage of algorithmic rental pricing from 2019 on. Link, link, link. And see Propublica’s investigations of Realpage. Link, link, link.

    +  “A non-software utilizing landlord will face higher demand when the software-utilizing landlords raise their rents, and find it optimal to raise their prices as well because demand is sufficiently concave (Calder-Wang and Kim, 2024).” From the White House’s CEA blog. Link. And see Sophie Calder-Wang and Gi Heung Kim on the impact of algorithmic pricing on multifamily rental markets. Link.

    NEW RESEARCHERS

    Teachers’ Unions

    MORGAN FOY is a PhD student in the Business and Public Policy group at UC-Berkeley, Haas School of Business. In his job market paper, he examines whether teachers’ unions affect student achievement in Wisconsin.

    From the paper:

    “I find limited evidence that decertification led to a significant change in the composition of the teaching workforce both on average and with respect to worker performance metrics. Teachers were not more likely to exit the district or the teaching profession. Instead, I find that teachers who stayed present across the pre- and post-decertification periods were more likely to improve in decertified districts relative to certified ones. This implies that the student achievement effects were due to a direct treatment effect of the union. Pinning down the precise mechanisms for these gains is challenging due to the limited range of outcomes in the administrative data. However, I find no evidence that there were changes to total district spending or that districts were more likely to implement pay-for-performance type schemes. Instead, the complementary survey evidence points to the idea that workers lost the ability to access union representation rights in issues with administration.”

    + + + 

    +  “Most IRA funds will flow to for-profit institutions equipped to take advantage of tax benefits, not publicly owned or non-profit entities. The mimosas may be bottomless but whether cooperative and public power will liberally imbibe is far from certain.” New on PW, Sandeep Vaheesan compares the New Deal’s electrification program with the Biden administration’s designs for financing the IRA. Link.

    +  Nicholas Bloom, Kyle Handley, André Kurmann, and Philip A. Luck revisit the reallocation of US jobs, geographically and in terms of job sector, due to the China shock. Link.

    +  “While enhancing American power, the petrodollar inflow also supercharged the financial sector. The inflow enabled the ‘financial sector to unleash itself,’ in the colorful phrase of one official.” By David Gibbs. Link.

    +  “Public-private fissuring—combined with labor-law doctrine—frustrates a central objective of labor law itself by depriving care workers of the ability to bargain with public entities that shape their wages and working conditions.” By Kyle Bigley. Link.

    +  Noah Gordon, Bentley Allan, Daniel Helmeci, and Jonas Goldman offer a supply chain resilience framework for US industrial strategy. Link.

    +  “The FTC found that the three largest PBMs—CVS Caremark, Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx—now manage nearly 80 percent of prescriptions filled in the United States.” By  Mike Ludwig. Link.

    +  “While the spirit of black consciousness was rising, the ANC and its underground were increasing their propaganda activities. During August 1970 leaflets telling people about armed struggle were distributed in all the major cities. The campaigning was so extensive and effective that it made the headlines of every major newspaper in South Africa, as well as receiving attention abroad. “ANC Shows Its Teeth Again—Bombs in Five Large Cities—State Threatened in Leaflet” were the front page headlines in the Afrikaans Die Transvaler of August 14.” By Bernard Makhosezwe Magubane. Link.

  3. The Urban Commonwealth

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    As the federal government continues to abdicate responsibility for urban investment, cities face a depressing modern calculus. Urban inequality has increased over the past decade, and many cities are struggling to make much-needed long-term investments (see the well-publicized summer meltdown of NYC’s subways). Raising taxes is politically challenging and skimming funding from current programs may detract from other critical policy goals. With no federal cavalry on the horizon, cities are under pressure to make the best of what they have.

    In this context, social wealth funds (SWFs) and urban wealth funds (UWFs), which have featured prominently in the public discourse recently, might seem like a policy panacea. SWFs promise to reduce inequality and build public wealth, while UWFs offer the tantalizing prospect of increasing revenues without raising taxes. Both scenarios seem desirable at face-value, but the consequences of wealth funds can vary greatly depending on their particulars. Digging deeper into these structures reveals why, though there is reason to be optimistic about applying elements of both types of institutions to urban contexts, there is also reason for caution.

    First, a note about terminology. Often used interchangeably or loosely, SWFs and UWFs refer to two qualitatively distinct types of wealth fund proposal. Both SWFs and UWFs are collectively-held, independently-managed investment vehicles that aim to preserve and grow public assets. SWFs generally aim to apply transparency and social goals to the sovereign wealth fund blueprint by engaging “new” liquid resources (e.g. natural resource dividends, progressive taxation) to initially capitalize a fund, which is then invested in a varied portfolio of financial assets. UWFs, on the other hand, compile existing public assets (e.g. public land, commercial enterprises, utilities) under a single entity, which actively manages the assets to maximize value. While proposals for SWFs often seek to earmark proceeds for cash transfers (this specific arrangement is called a Citizens’ Wealth Fund), UWFs aim to broadly pursue social investment, at least as conceptualized by Dag Detter and Stefan Fölster.

    Alphabet soup aside, the case for the first type of wealth fund, social wealth funds (SWFs), is theoretically and empirically compelling, but usually made at the national level. As capital’s share of national income growth swells and capital ownership concentrates increasingly in the hands of the few, wealth inequality has grown more pronounced. By recouping private wealth through measures like natural resource dividends or wealth taxation and investing this wealth in a collectively-owned financial fund, SWFs can redistribute gains from surging economic growth. Unlike traditional fiscal policy, SWFs build a store of public wealth, which pays off in the long-term; for instance, Norway’s sovereign wealth fund, the largest in the world, announced profits of over $131 billion in 2017, nearly one-third of the country’s GDP.

    In theory, there’s no reason why this SWF model could not be applied to municipalities. Cities face similar inequality trends and could certainly use the long-term public wealth, especially if it were put to redistributive use. The level of government shouldn’t matter: the Alaska Permanent Fund (APF), which provides every Alaskan with an annual cash transfer (that, by the way, has little effect on employment), offers a successful blueprint for how a municipal SWF could operate, albeit on a regional level.

    The problem lies in the lack of opportunities. Realistic circumstances for municipal SWF implementation are few and far between. Cities do not generally sit on untapped natural resources, and the margins for raising taxes (whether income, property, or otherwise) are slim. Barring the discovery of oil or a shift in the political realities of taxation, the prospects for immediate-term municipal SWFs are limited.

    Urban wealth funds (UWFs), on the other hand, avoid this problem. As proposed by Detter and Fölster, UWFs do not rely on new revenue streams, instead seeking to maximize the value of existing public assets through active, independent management. Their strategy involves three steps: (1) overhauling public accounting to create an accurate balance sheet of public assets, (2) consolidating assets into a single investment vehicle directed by professional fund managers for the purpose of value maximization, and (3) shifting proceeds to long-term social investment rather than immediate consumption.

    Several aspects of this model are compelling. It’s hard, for instance, to argue with improved public accounting. While an overhaul of municipal balance sheets would require significant investment and logistical coordination, the benefits of knowing assets’ market value would likely be worth the pain. Right now, most cities can’t effectively weigh the opportunity costs of shifting public assets (as Matt Klein notes, Boston couldn’t tell you if it makes financial sense to move Logan Airport to the outskirts). More transparent and comprehensive book-keeping could not only help cities better manage their resources, but also yield several positive externalities. In New York City, for example, the ongoing furor over vacant city-owned lots illustrates how public trust deteriorates when the municipality can’t offer concrete answers about the status of certain assets.

    Just as with municipal SWFs, the act of shifting revenues away from short-term consumption and towards long-term social investment seems valuable too. In The Public Wealth of Cities, Detter and Fölster credit Singapore’s successful development over the past 50 years to their UWF (Temesek) and its returns on long-term investment (e.g. Temesek provided shareholders with 15 percent returns for the year ending in March 2016). To illustrate this point, they compare Singapore to Jamaica, another former British colony that gained independence in the 1960s. The two countries’ population, life expectancy, and GDP/capita were roughly similar in the 1960s; but in 2014, Singapore’s GDP/capita was roughly ten times Jamaica’s and its life expectancy gains nearly twice Jamaica’s.

    Even though the qualitative evidence does suggest that Temesek and GIC (Singapore’s sovereign wealth fund) have contributed to Singapore’s success, it’s difficult to causally separate the UWF structure (particularly its political independence) from other Singaporean policy choices. This hints at a broader question. In the absence of quasi-natural experiments or other counterfactual analysis, it’s reasonable to interrogate the value-add of the independent UWF structure itself. In other words, would cities be equal or better off if they had used their excess resources, assets, and capacities according to another – perhaps more explicitly political – long-term structure? It’s hard to say without more robust empirical literature.

    But even if we accept that these structures produce benefits for places like Singapore, using existing public assets engenders further concerns. While the UWF revenue model alleviates the “key challenge” of SWFs (finding initial funding), many existing public assets have current and potential non-profit utility, some of which might matter just as much or more than value maximization. This seems particularly true when it comes to land, one of the most plentiful and valuable municipal assets.

    Central Park is an obvious example. While selling a portion of Central Park for condominium development might pay out a considerable sum (which could then be socially invested), the loss of public utility from using the public space, which is hard to measure in equivalent quantifiable terms, would almost certainly counteract the benefits of the additional revenue. Anticipating this, Detter and Fölster themselves suggest that certain public assets, like parks, be excluded from a UWF.

    But while Central Park may be black and white, other situations present tough decisions. Consider a public housing complex in a neighborhood with unaffordable housing. For simplicity’s sake, imagine a UWF fund manager has two options: sell the land or maintain the housing units. Public bookkeeping improvements would certainly help her make a more informed decision about market value, and thus financial opportunity costs. Let’s say, even, that the analysis demonstrates that the value-maximizing choice requires selling the complex. Should the city still sell the public housing complex, knowing that families will be forced from their homes? How should their utility factor into the decision-making?

    The point here is not necessarily to answer the questions, nor is it to exactly delineate which of a city’s total public assets should be managed according to non-profit goals. Instead, it is to draw attention to the fact that (a) such a decision requires a more expansive calculus than profit maximization and (b) it is highly questionable whether fund managers, whose added value explicitly derives from their ability to maximize returns, are equipped to make this decision. Though democratic whims can yield short-sighted outcomes – indeed, this is in many ways a key premise of Detter and Fölster’s argument for separating UWFs from short-term politics – the political process still exists to represent the will of the people in making these types of decisions. It seems optimistically technocratic (at best) and deeply problematic (at worst) to relinquish democratic control of public assets in instances where maximizing the revenue-generating power of the asset could come at the expense of maximizing public utility.

    In this regard, municipal SWFs have an advantage over UWFs. Because SWF are usually funded through “new”, liquid sources (e.g. oil dividends, wealth tax, etc.), the process of maximizing value does not generally interfere with other public objectives. This calculus suits the expertise of fund professionals and the model of independent management much better. While SWF objectives should still be clear and transparent, so that the public can weigh in on controversial investments (e.g. fossil fuels, tobacco), the risk of unwittingly sacrificing public utility in the name of profit is far more limited.

    Though neither option is perfect, cities should not throw the baby out with the bathwater. Several elements of these models could help cities in the short-term; in fact, some reforms, such as improved public accounting, could even add value without creating a municipal SWF or UWF. In this vein, American cities might consider two small-scale approaches, depending on context and circumstances.

    First, in cities where natural resources are available or taxes can be increased, policymakers could consider resisting the temptation to immediately spend new revenue in favor of creating a modest municipal SWF (similar to the APF). Though striking oil may be unrealistic, several cities are considering reforms around taxation – toying with congestion pricing and land value taxes, amongst others – and local policymakers could pair these reforms with a municipal SWF to shift revenues towards building public wealth. Over time, such a fund could slowly socialize wealth through new revenue streams, investment yields, and redistributive dividends (such as cash transfers).

    Second, where natural resources are unavailable or tax increases politically unviable, cities could consider experimentation with limited UWFs, which offer a safer option for protecting public interests than the comprehensive model of Detter and Fölster. Here, the specific public assets used are of critical importance. The experience of Copenhagen’s port UWF, which revitalized portions of the city without raising taxes, is instructive. Copenhagen’s UWF focused on underutilized industrial areas and neglected waterfront land, where there are fewer competing goals beyond redevelopment. The clear objectives and narrow scope reduced possibilities of interfering with other public goals, so the benefits of value maximization and independent governance were more readily realized. Another UWF variant, Hong Kong’s MTR Corporation, offers a different template. The HK MTR, which manages one of the world’s most successful public transportation systems by integrating rail infrastructure with value capture of the surrounding environs, demonstrates how a limiting a UWF to a specific sector can prove successful.

    Beyond the two frameworks considered here, cities might also be interested in a third wealth fund paradigm: UWFs with explicit non-profit objectives (such as providing affordable housing). This approach has been discussed less thoroughly in the wealth fund discourse, though a recent Friends Provident Foundation report suggests that creating an “Urban Land Fund” could help cities reduce the cost of social housing by buying and providing cheap land. Empirical examples do exist: Singapore’s Housing and Development Board (HDB) uses mass public land ownership to manage an affordable and stable housing market. It also, however, serves as a helpful reminder that such endeavors would require a radical reframing of the American municipal relationship with land, property-owning, and housing.

  4. Visualization Test

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