Governments around the world are rediscovering ownership as an instrument of economic policy. From Washington’s industrial policy and Beijing’s state-owned enterprises (SOEs) to sovereign wealth funds across Asia, states are increasingly acting not merely as regulators but as strategic shareholders. The question confronting policymakers is no longer whether governments should own corporations, but how they should govern them.This marks a striking reversal. For more than three decades after the collapse of the Soviet Union in 1991, privatization, capital market liberalization and shareholder primacy defined the prevailing model of economic reform. Governments were encouraged to retreat from ownership, while SOEs were expected to become more like private corporations.
That consensus found its most influential expression in Henry Hansmann and Reinier Kraakman’s landmark essay, The End of History for Corporate Law, which argued that the shareholder-oriented model had effectively become the endpoint of corporate governance evolution.
The broader law-and-finance literature, particularly the work of Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer and Robert Vishny, likewise emphasized investor protection and private ownership as foundations of economic development.
