Stockholm University
Department of Economic History and International Relations
Master’s Thesis in Economic History with specialization in Global Political Economy Spring Term 2021
Author: Fredrik Walstam Advisor: Alf Sjöblom
ORGANIZED LABOR AND
THE AP-FUNDS
How the Swedish government AP-Funds challenge financialization
Abstract
This thesis will discuss how the Swedish government investment AP-funds have grown in size and scope since the reform of 2001 despite an overall trend of financialization since the 1980s. Financialization here is associated with reduced government ownership.
The thesis’ unique contribution will be to examine the funds through the theoretical frameworks of power resource theory, where the funds’ eventual form was contingent on a historically changed political landscape, and the theory of financialization, where the AP-funds, as government agencies, follow other domestic and global trends but also go against some of them. Financialization explains certain changes that occurred in Sweden in the 1980s onward. Power resource theory allows for an analysis of organized labor that was reduced in strength, coinciding with financialization, with are still highly organized. Power resource theory will also help use the wealth of background and academic literature to gain an understanding of the Social Democratic Party today, which is relevant since the party is an active member of the Pension Group that together make political decisions about pensions.
The theories will influence the usage of the case study method and use empirical materials like: laws, government reports, AP-fund publications, parliamentary debates.
Table of contents 1. Introduction...4 1.1 Research aim...5 1.2 Research question...6 1.3 Disposition...6 Background rationalized...7 2 Background...8
2.1 The first public pension reforms…...8
2.2 After the Second World War...8
2.3 ATP and the AP...9
2.4 1980 and the end of ATP...11
2.5 The 1990s reforms...11
Background conclusion...13
Literature review rationalized...14
3 Literature review...15
3.1 Power resource theory...15
1. Introduction
The AP-funds or the ‘Allmänna Pensionsfonder’ which translates to general pension funds are government authorities in charge of managing pension assets for long-term returns. There are six different AP-funds: the First, Second, Third, Fourth and Sixth AP-funds are the buffer funds and the Seventh deals with premium pensions. There is no Fifth AP-fund.
The buffer funds One to Four cover potential shortfalls in the Swedish pay as you go (PAYG) pension system where 16 percent dues on workers’ salaries today cover the income of pensioners. When 16 percent is insufficient to cover what is owed, these buffer funds, by an equal amount each, cover the payment deficit.
What the AP-funds have been allowed to invest in has changed over time. Originally primarily invested in fixed income, like bonds, with the intention to contribute to investments in the national economy, the modern investment mandate allows for investment in a wide range of options. Concurrently, the funds keep growing in size and scope.
An argument advanced is that the AP-funds today and their trajectory stands in certain contrast to Swedish political and economic history that was influenced by forces of financialization. When looking at government ownership, this is especially clear with the now dismantled controversial Wage Earner Funds, which were funds that transferred equity from private companies to collective ownership funds with control from unions.
The Wage Earner Funds were dismantled in 1992 by a minority rightwing government. The pension reform activated in 2001, also under a rightwing government, set up the current AP-fund system that emphasized a system of multiple funds to facilitate diversity of investment and risk, and of competition between one another. The funds were to have a limited influence on the domestic market and exist outside of politics. Many of these original intentions have since been adjusted.
As evidenced from reports issued by the Council on Ethics of the Swedish National Pension Funds and from the government, we see increased ethical considerations, collaborations and investment possibilities for the funds as they keep increasing in size which stands in contrast to other economic trends in Sweden since the 1980s.
1.1 Research Aim
This paper will utilize the theories of financialization and power resource theory to help explore how the AP-funds were established and have developed since 2001. A goal of the paper is to historically situate how the AP-funds trail financialization but also problematizes part of the theory. Further, if successful, the theories should be able to cover shortcomings from the theories if utilized by themselves. The paper will use a mix of qualitative and quantitative evidence, with comprehensive historical context, to evaluate the theories especially as they reveal a broad characterization of the organized working class and in what ways the funds go against some trends associated with financialization.
1.2 Research Question
The research question: How the Swedish government investment AP-funds have grown in size and scope since the reform of 2001 despite an overall trend of financialization?
In the process of answering this question, the analysis will consider additional questions like:
1. How power resource theory helps explain Swedish economic and political history. 2. Some ways financialization impacted Sweden.
3. If power resource theory and financialization together can illuminate why and how the AP-funds go against trends associated with financialization.
1.3 Disposition
Background rationalized
2.0 Background
2.1 The first public pension reforms
Political scientist Joakim Palme gives historical perspective on pension reform in the article “Features of the Swedish Pension Reform” and frames how this legacy informs the present. The first public pension reform, not designated to specific occupational categories, was in 1913. Palme describes it as: “The first-tier of the system was a universal and compulsory fully funded contributory plan that would eventually pay benefits for those who contributed” with means-tested benefits for low income pensioners and a separate program for state employees (Palme 42). Gøsta Esping-Andersen In The Three Worlds of Welfare Capitalism considers means-testing, government programs that consider if the subject should receive assistance based on if they could fare well without it, as something that was opposed by labor movements and rather fit in liberal welfare state regimes instead of Social Democratic ones (Esping-Andersen 127). The first public pension reform has issues, including the funded benefits never being very large and the means-tested benefits grew in importance. This dynamic existed partially because the program failed to keep pace with inflation and the premiums were quite meek (Palme 43). Of particular note here is the issue of stability of the system and the sufficiency of generosity and coverage.
2.2 After the Second World War
struggle to establish the public pension system is framed by Heclo as one of the most contentious in post-war history. In the early 1940s, pensioners have been described as a significant interest group in Swedish pension policy with Elmér describing their influence as evident (Elmér 554).
In 1946, the ‘People’s Pension’ the established universal flat rate benefit was amended to be unified across all municipalities. The proposal had unanimous support and increased contributions and substantially higher, mostly flat rate pensions financed through general taxation. The right claimed a victory in its passage for having supported the higher rates, while Heclo characterizes its passage as a preemption from the Social Democrats, ultimately making it their victory. In terms of public pension debates, carrying forward from the 1946 debates would be considerations regarding: price index, income index, and housing supplements (Heclo 230). Of most relevance to the AP funds is the income index, a measurement of growth in the average of incomes across the country.
In 1957, the pension question was put to a referendum vote with three different options. The options varied along how optional or compulsory pensions should be. The organized left favored compulsory pension insurance paid by employees and employers. The Centre Party pushed for increased national pension with possible voluntary supplementary insurance that would be guaranteed by the state. The rightwing party and Swedish Employer Association wanted occupational pensions through agreements. The first option got the most votes with 45.8 percent, the second 15 percent and the third one 35,3 percent (ibid 243). Referendums like in this case, are typically consultative in Sweden, meaning the parliament still needs to pass the motion (Riksdagsförvaltningen).
2.3 ATP And the AP
be split up in three parts. Regarding placement and diversification, it was suggested the fund primarily place its means in bonds and debentures (ibid 124).
The Allmänna Tilläggspensionen (ATP) or general supplementary pension came into effect in 1960, following the election of 1957 and the parliamentary decision in 1959. ATP was a supplement for the national pension system that improved pensions for workers and also committed the state for increased general pensions. The ATP was able to be passed in 1959, in big part thanks to People’s Party member Ture Königsson abstaining from the vote. The proponents did not have a solid majority, but by not exercising his vote, he just barely made the general occupational pension possible to pass (ibid 143). In Ture Königsson’s own book about the ATP fight, he does not give a clear answer as to why but he considers both the Centre Party and the People’s Party to not have taken the pension question seriously (Königsson).
Workers were now enrolled to earn supplementary benefits on top of their universal ones. The universal benefits were financed by general revenue from the government while supplementary benefits were financed by employer contributions. The ATP program was designed with a PAYG plan where fees from today cover the income of pensioners today directly. A defined benefit formula was applied so that 30 years of work qualified one for full benefits where the 15 years one had their highest earnings were the ones used for calculating ones’ benefits with a target level set at sixty percent. Contributions and pensions paid out were also indexed to the price index (Palme 43).
With the implementation of the ATP, the general pension fund called the AP-fund was created. In, the translated title, “Four expensive funds?” Malin Björkmo provides context for the creation of the AP-fund. Two chief argument are lifted: Savings in the fund were meant to contribute to encourage investments in the economy and the AP-fund was to cover the long-term development of the pension system. The ATP pensions were growing and the fund was to play a buffer role to potential payments deficits (Björkmo 49).
2.4 1980 and the end of ATP
By 1980, the ATP reform had tripled replacement rates, basically how much an individual is entitled to compared to pre-retirement income, on the public pension of a retiring worker compared to in 1960. Basic benefits were close to have doubled in line with average earnings. The ATP reform in terms of poverty and inequality reduction among the elderly could only be matched by systems in Finland and Norway. What was then behind the large pension reform that followed? While the system was socially successful, it was ultimately going to be economically unsustainable. This unsustainability was already recognized in the early 1980s and led to the appointment of a parliamentary pension commission in 1984 (Palme 43).
Old age pension was underfunded and was to be under greater burden due to projected demographic changes. The AP-funds kept the system working, however the projected course would lead to the funds eventually disappearing, then the only solutions would be increased funds, lower pensions, or system reform. A key part of the reform was to change how the price indexing was used, if growth was low as it had been the past 4 years then contribution rates had to be increased to match entitlements, but that would require a bigger transfer from the working age population. Pension reform did not happen because the system failed to deliver on basic pension or income security but because it was tied to price development that was not necessarily connected to the real economy as well as political instability with opposition from rightwing parties (ibid 44).
2.5 The 1990s reforms
Politically, the pension reform came together through a coalition of parties known as the Pension Group. This large cooperation enabled a notable degree of freedom in pushing to reform the system. Nicholas Barr analogizes the group to Julius Caesar being stabbed by multiple individuals so that no one person can be blamed. The Pension Group consisted of the Moderate Party, the Social Democrats, the Liberal Party, The Centre and the Christian Democrats. The pension group still exists today and now includes The Green Party (Barr 27).
pensions. 16 percent went into notional account from national defined contributions for the income pension 2.5 percent go into fully funded individual accounts that create fully funded benefits as the premium pension which is money that can be self-placed in funds in select equities or it is invested on your behalf by the seventh ap funds. An important element of the reform was an emphasis on securing the same benefit levels as the old system, so the size of the notional accounts were designed with such a goal. How the 2.5 percent was used came from a compromise, where the Centre party and Moderates increased higher contribution rates if there was an element of individual choice embedded in the system, which became the system of fully funded individual accounts (Palme 46).
The current AP-fund framework, emerged in connection with large pension reforms of 1998. Here the pension system was set up to be self-financed and gave the funds a clear purpose as buffer to the system (ibid 51). Four separate AP funds were setup, First, Second, Third and Fourth but this time with much more freedom in their investment possibilities (ibid 52).
2.6 Background conclusion
Palme concludes the history of pension reform by pointing to its been conflict prone, however it is also led to political coalitions and emergent consensus. Once large reforms have been passed, they generally influence the scope by which how future projects are considered. (ibid 51).
Economist Nicholas Barr in “The pension system in Sweden” notes weaknesses of the system, the notional defined contribution is designed to adjust on the benefits side, meaning sustainability of income pension is prioritized over an adequate system. Adequacy can also be lost as a result of rising life expectancy, where if the same retirement age is maintained, benefits will be less over time. The guaranteed pension can be placed at a level where it adequately reduces poverty, but rising life expectancy may be an issue in regards to consumption smoothing. The brake mechanism, where pensions are adjusted more slowly upwards when liabilities exceed assets may be constructed too harshly and punish pensioners on behalf of workers. The indexation of benefits put more risk on retirees. The pension system is designed mostly on an individual basis which is a partial cause of single pensioners having higher incidents of poverty than pensioner couples (ibid 14).
The report also recommends that the premium pensions’ investment options of about 800 mutual funds is excessive and inefficient (ibid 75). In fact, the options have been lowered since that time of writing to less than 500 (Pensionsmyndigheten). The report, by virtue of focusing on if the pension system succeeds on the terms set by itself, does not mention how pensions used to be more generous and if that is desirable to return to. Today for example, there is significant dissatisfaction and worried attitudes towards the pension system among LO union members (Lindholm).
1.0 Literature review rationalized
The literature review section is split between power resource theory and financialization. Power resource theory will be explained and then developed to see the goals of the organized working class. The Wage Earner Funds are a primary example of what the Swedish organized working class aimed to achieve and whose resulting controversy and eventual dismantlement can help illustrate how the AP-funds stand out. The role of the Social Democratic Party will be made more complicated as an evolving coalition with internal struggles and changing opinions that can be shown to have made a neoliberal turn yet maintain its role in the organized working class which will be seen in their role of wanting to expand the investment mandate of the AP-funds.
3.1 Power resource theory
In the paper “Power Resources Theory and Inequality in the Canadian Provinces” written by Michael Kellermann, he provides a synthesis of power resource theory from Walter Korpi and John D. Stephens.
Power resource theory considers organization of working class power to explain differences in welfare states. A core assumption in the theory posits that power of the working class is achieved through labor unions and left political parties, when these are stronger it allows for outcomes that distribute in a more egalitarian tendency as well as shape the size and characteristics of the state
Power resource theory frames capital and labor as two opposing preferences in regards to the level of inequality in society through a class-based conception of politics. In this framing, Korpi emphasizes power as a means to punish and reward other systematic actors (Kellermann). For example, it is difficult for a single workers to punish a corporation, however through a labor union or a political party representing their interests, it is possible
3.2 The Wage Earner Funds as the final step
perspective, which is what one does with the excess profits from the more profitable firms that gain from the compressed wages, a lot of which goes to few capital owners (ibid 217).
The LO proposal of Wage Earner Funds would have been one way of address this dynamic by making companies of a certain size transfer a portion of their profits into shares put into funds controlled by unions. As these funds would grow, the union influence over companies would gradually increase as they become larger shareholders, effectively socializing companies, or the means of production to put it in the socialist terms. The Wage Earner Funds quickly turned controversial, mobilizing the business community and the political opposition.
The Wage Earner Funds were severely watered down but ultimately became law. Rudolf Meidner distanced himself from the final form of the funds: “[T]he scheme had been changed beyond recognition from the original LO proposal” also referring to it as a toothless shareholding funds rather than the overtly socialist union idea (ibid 225). However, despite Meidner’s disappointment, if the funds had been allowed to keep operating, they would have been one of the largest shareholders on the Swedish market today, however they were dismantled in the 1990s under a bourgeois government (ibid 220).
3.3 The Social Democratic Party and Private Ownership
Högfeldt notes three policies enabled by the Social Democrats that favored entrenchment tendencies. The combination of: bank ownership of equity, control mechanisms separating votes from capital ownership (especially from foreign ownership), and tax advantaged benefits in earnings and borrowing over in equity. These policies favored already established firms over newly created ones especially in financing. To gain capital for investments, established firms could be supplied from retained earnings, loans from banks, or an infusion of privately owned capital. None of these means forced the firms to have to go through equity offers and lower ownership levels with new investors. Two primary tools frequently mentioned are dual-class shares and pyramiding. Pyramiding allows one to leverage unrealized profits from trades to increase position size. Dual-class shares allows shareholders of a company to maintain control with the shares they own while issuing other shares with none or little voting power (ibid 522).
Högfeldt finds there is a certain irony in corporate concentration existing because of the Social Democrats: “[They] have in fact been the guarantor rather than the terminator of private capitalism since the political and corporate incumbencies have been united by strong common interests” these interests are the political support to maintain ownership and in return the Social Democrats are able to get the resources for their social and economic policies since the capital will not leave the country. These policies enabled full employment, a generous welfare state, a large public sector and economic growth. The author is quite complimentary to the arrangement and does not address if this concern for fleeing capital could have been addressed in another way (ibid 522).
The piece concludes by portraying this as an economic system with a surprisingly large number of old large firms with quite particular ownership as a result of not challenging property right and wealth and not encouraging the creating of new firms in primary equity markets (ibid 576). Looking back with hindsight, it seems the encouragement of new firms is not a clear cut solution to problems of equality. The piece also has a quite limited perspective of why the Social Democrats did not embrace more socialization of companies beyond fear of capital flight and lack of investments as the next reviewed literature will demonstrate.
In the 1992 book The Limits of Social Democracy by Jonas Pontusson he argues the achievements of the worker’s movement in Sweden, that reconciled Social Democratic values with capitalism, is a lot less stable then it is given credit for. By framing Swedish economic history through the perspective of trying to control investment and some consideration of planning, his assessment of the country’s feats are less flattering than those focusing on its welfare achievements.
Pontusson presents academic Peter Katzenstein’s 1985 argument where Sweden is notable not just because of its union history and long rule of Social Democrats, but an overlooked aspect is the highly organized nature of the business community. Rather than a hindrance to the efforts of labor, they played an active role in the political realm. At the same time, Pontusson pushes back against historical interpretations that treat the labor movement as a singular united actor. There was notable conflicts between the different unions and between the unions and the Social Democratic Party (ibid 5).
These divisions did not particularly express themselves when there was mobilization for codetermination but did when labor pushed for the Employee Wage Funds. According to Pontusson, codetermination was a qualified success for labor (ibid 6). He gives four main reasons it played out that way. First, the organized business community decided to accommodate codetermination and never mobilized either the public or political parties against it, which is what they did against the Wage Earner Funds. Second, LO and the Confederation of Professional Employees (TCO) agreed on the key terms of the proposal and coordinated their efforts (ibid 231). The union funds in contrast were mostly driven by LO themselves. In a similar way, the third reason is that while the Social Democratic government supported codetermination, the funds were more controversial. The last reason he gives is that the Liberal and Center parties supported codetermination but were against the funds (ibid 228).
The funds lacked a clear broad alliance of support, it then seems reasonable to ask why that was. The author seems to chiefly ascribe it to the specific character when wanting to control investment politics and relatedly the difficulty of appealing to a wide variety of interests when focusing on changing control over investment politics. A reality for reformist socialist parties is the need to mobilize voters. To win an election, a party needs electoral support beyond the working class to gain a majority. Then to win future election, the economy has to be performing reasonably well, a key condition of which relies on the level of private investment (ibid 19).
LO congress there was a suggestion that: that excess profits generated by solidaristic wage policy should be set aside in “sectoral rationalization funds” jointly administered by unions, employers, and representatives of the public. Such funds would encourage wage restraint and could also promote the restructuring of capital, but this sort of argument was hardly chiefly advanced by the union (ibid 188). Pontusson notes that a great deal of attention was paid to profit sharing and collective capital formation, like how the AP funds should be designed, which won’t be discussed here, but that arose objections similar to those to the Employee Wage Funds from the business community that were then repeated by the Liberal and Conservative political parties (ibid 190).
The Wage Earner Funds were regardless able to be passed in 1983, although a watered down version, Pontusson cites Sven Ove Hansson who claims: “organized business spent about as much on its advertising and media campaign against Wage Earner Funds in 1982 as the five parliamentary parties spent on the election campaign of the same year” despite the 1983 legislation was clearly meant to be depoliticized (ibid 224)
3.4 The neoliberal influence on the Social Democratic Party
The Social Democrats lost the election of 1976 and came back into power in 1982 it was then that they renounced explicit industrial policy and state intervention, instead emphasizing market and profit oriented strategies. Known as the third way which is comparable to neoliberalism, the Social Democrats slashed state subsidies and engaged in some level of privatization of state enterprises acquired in the 1970s. Public spending was seen as an obstacle to the growth of the private sector (Pontusson 14).
3.5 Power resource theory conclusion
Pontusson concludes his book by reaffirming the special character of investment decisions as they determine the long-term commitment of resources and are a large part of the power the owners of capital wield (ibid 237). A limit of Social Democracy then is how it frames and strategizes if it wishes to overcome this dynamic. Jonas Pontusson does not really discuss that at the time, that the Social Democrats had a sense of invincibility to them, which may have reflected some lack of persuasion regarding the Wage Earner Funds. While he discusses the business community as a force in and of itself, as we saw in Högfeldt piece, the business community in Sweden has a highly specific organization to it.
The reviewed literature frames the organized working class in Sweden as on a path of accumulating victories with an expanding welfare state and increased public ownership. The Social Democratic Party, an important part of the organized working class, has a more nuanced legacy of existing in a sort of equilibrium between capital and labor. The Wage Earner Funds were pushed for primarily by LO and would have broken with this equilibrium and was reluctantly supported by the Social Democrats.
3.6 Financialization rationalized
Financialization will be defined and then utilized to understand how its associated trends in Sweden changed the political landscape to increase market power and decrease those of the government and later on prove what that entailed. The dismantling of the Wage Earner Funds can at least partially be explained with this shift in Sweden.
Financialization will also be used to show limitations of these associated trends when applied to the AP-funds. Limitations on the investment mandate of the AP-funds were influenced from the political struggles over the Wage Earner Funds. However, historically the investment mandate of the AP-funds has been expanding, and while the AP-funds have sometimes been politically framed as constructed to solely invest for long-term pension returns, the funds’ ethical considerations and collaborations have increased over time.
The AP-funds can problematize trends associated with financialization but this is not meant to disprove the theory overall, just to explore it as exceptions.
The thesis applies both financialization and power resource theory to the AP-funds and these theories will overlap and interact in the way they are used, in the model section this is clarified in chart form.
3.3 Financialization
Financialization, the second theory, allows for explanations that consider changes in the Social Democratic Party, Sweden as well as much of the world. Financialization and power resource theory can also be combined to explain the conditions that allowed the AP-funds to keep growing.
Epstein proves this quote in regards to finance in the economy: “financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies” where the AP-funds were designed to operate in both domestic and international markets but with intentional limitation in regards to government involvement over corporate decisions (Epstein 3).
However, the thesis will engage critically with this definition in regards to the AP funds as they have increased in size over time, the ethical dimension of investments has increased and they collaborate more. Typically neoliberalism and financialization emphasize a decrease in the power of the state government but through collaboration with other international and domestic equity holding entities and increased market access, an argument put forward is that the AP-fund and globalization has in fact, in new ways, increased the power of the state. Before financialization, the government, through government agencies were a lot less able to influence companies around the world through shareholding.
Lars Ahnland in “Financialization in Swedish Capitalism” references other associated trends of financialization that apply to Sweden like increased inequality and higher asset prices (Ahnland 5).
Rudolf Hilferding offers another perspective on financialization in Finance Capital: a Study in the Latest Phase of Capitalist Development where he considers financialization to be something akin to an opportunity since it changes the nature of ownership and can facilitate the task of overcoming capitalism by the socializing function of finance (Hilferding). In other words, against the trends of financialization, it can also enable equity can be collectively owned, something relevant to both the Wage Earner Funds and the AP-funds.
3.7 Financialization conclusion
Financialization has several associated trends, ones emphasized in this thesis are the increased role of finance in the market, increased inequality, decreased power of the government and increased power of the market.
These trends happened globally with a tendency of left parties gradually emphasizing the concerns of the highly educated, resulting in a gradual move away from working class concerns, which translates into less public ownership.
Hilferding saw the increased role of finance and equity as an opportunity in this framing where if more parts of the market are financialized, then through the political system it is then easier to absorb these into public ownership. Rudolf Meidner’s Wage Earner Funds were established before financialization but worked on a similar idea to that of Hilferding where companies were gradually owned by government funds.
4.0 Method
The thesis will use case study for its methodology. Using Alexander L. George and Andrew Bennett’s book Case Studies and Theory Development in the Social Sciences to define a case as: “an instance of a class of events. The term “class of events” refers here to a phenomenon of scientific interest, such as revolutions, types of governmental regimes, kinds of economic systems, or personality types that the investigator chooses to study with the aim of developing theory (or “generic knowledge”) regarding the causes of similarities or
differences among instances (cases) of that class of events. A case study is thus a well-defined aspect of a historical episode that the investigator selects for analysis [.]” by looking at history through economic and theoretical framing (George and Bennet 24).
5.0 Model
The table shows some of the major factors accredited to the theories which will be demonstrated and ultimately connected to the AP-funds. Some key measures can be applicable to both theories, like inequality, but have been connected with one theory for narrative simplicity.
5.1 Table of Measures
Theory Key Factors Key Measures
Power Resource Theory Decreased power of left parties
Less working class mobilization
Reduced public ownership
5.1 Diagrams of the arguments based on theory
In the charts below, arguments from the thesis are visualized. In the first chart, financialization and its associated trends, in combination with power resource theory and its implications for an organized working class, help explains changes in the Social Democratic Party and the neoliberal turn in Sweden. Financialization and reduced power of an organized working class changes Sweden and the Social Democratic Party.
In this second chart, power resource theory helps explain why financialization does not fully accomplish all the trends ascribed to it. While there was a decrease in the power of the organized working class, it was still highly organized which is evidenced by previously mentioned codetermination and with the AP-funds.
Financialization
Power resource theory
Changes in the Social Democratic Party and a neoliberal turn in Sweden
Limitations of financialization
Limitations of
financialization of the AP-funds
6.0 Empirical section rationalized
The empirical section will use evidence to operationalize power resource theory and financialization to explain and contextualize why and how the AP-funds stand out in the neoliberal turn in Sweden.
The first theory evaluated empirically will be power resource theory. Key variables of power resource theory goes over variables like degree of union organization, parliamentary elections, and public wealth. These variables are evaluated individually but are all included to prove aspects of power resource theory as well as to show how it changed over time. In all three cases in Swedish history there was a gradual increase then a noticeable shift somewhere around the 1980s-1990s coinciding with the neoliberal turn.
The second theory evaluated empirically will be financialization. Key variables of financialization examined are the market capitalization of listed companies, household financial assets and the Gini coefficient. These are expanded upon individually but provides proof of the increased role of finance in the economy and how this played a role in increasing inequality. This is relevant to the AP-fund to establish that financialization happened, which changed priorities of the Social Democratic Party and Sweden as a whole, but also shows metrics that can help explain how power resource theory did not let some trends associated with financialization go too far.
6.1 Key variables of power resource theory
The key factors of decreased power of left parties and of working class mobilization can be partially demonstrated with measures of: union organization, public ownership and the Gini coefficient. Degree of union organization measures how many members are part of a union out of those eligible and reflects the degree to which a societal working class has organized itself. Higher level of public ownership is associated with a more organized working class as well as lower levels of the Gini coefficient which measures level of equality.
6.2 Degree of union organization
In the below graph from the LO website, we see the degree of organization by age, referring to how many members are part of a union out of all eligible individuals who can join in four divided age brackets of 16 to 24, 25 to 29, 30 to 44 and 45 to 64. The red line, representing the youngest workers has decreased the most and workers of all ages declined in affiliation significantly after the early 1990s (LO).
Union affiliation by age. Workers in 1990-2015. Percentage
Union affiliation by class in 1990-2015. Percentage
Graph 2 LO. “Facklig Anslutning Efter Klass År 1990-2015.” Lo.se, 28 Aug. 2015, www.lo.se/start/lo_fakta/facklig_anslutning_efter_klass_ar_1990_2015.
Here the line with a circle refers to workers and the line with a square for official workers. The red line is for every union affiliated worker. There has been a gradual decline in union affiliation since the 1990s for both classes of workers but more by age than profession.
6.3 Votes by Party in Swedish Parliamentary Elections, 1921-2018. Percentage
Graph 3 SCB. “Hundra År Av Svensk Demokrati – Partiernas Toppar Och Dalar.”
Statistiska Centralbyrån, 2021, www.scb.se/hitta-statistik/artiklar/2021/hundra-ar-av-svensk-demokrati/.
The above graph shows the long dominance of the Social Democratic Party represented by the red color marked S. From 1932 to 1976 SAP controlled the country for 44 years and, as the next sections will show, are associated with trends of increased public ownership and reduced inequality in the process. Carl Bildt of the Moderate Party, represented by the dark blue M, became prime minister with a minority government in 1991. A banking crisis in early 1990s as well as the now more conservative government reversed the associated trends (Lidström 9).
6.4 Public Wealth
The following three graphs were made with data from the World Inequality Database and put together by Matt Bruenig from the think tank People’s Policy Project.
In the middle of the 20th century, the Swedish government owned about 14 percent of
national wealth (a nation’s assets minus its liabilities) and in 1975 it peaked around 44 percent as represented by the below graph.
Graph 4 Bruenig, Matt. “The Dramatic Rise of Public Ownership in Midcentury Sweden.” People's Policy Project, 8 Oct. 2018, www.peoplespolicyproject.org/2018/10/08/the-dramatic-rise-of-public-ownership-in-midcentury-sweden/.
Graph 5 Bruenig, Matt. “The Dramatic Rise of Public Ownership in Midcentury Sweden.” People's Policy Project, 8 Oct. 2018, www.peoplespolicyproject.org/2018/10/08/the-dramatic-rise-of-public-ownership-in-midcentury-sweden/.
At the start of 1950, public debt is 16.6 percent of national wealth with assets just over 30 percent. At the peak in 1980, public debt was at a similar level but assets at 61.8 percent of national wealth. This means public wealth increased as a result of the government owning more of the national wealth in assets.
The peak in public ownership coincides with the culmination of SAP’s efforts as illustrated in the below graph.
In this graph, we see illustrated in red the previously mentioned dominance streak of SAP from 1932 to 1976 as well as the overlapping increase percentage of national wealth owned by the Swedish government. The blue represents other times, meaning SAP and other parties.
The rightwing coalition also dismantled the Wage Earner Funds who if they would have been allowed to keep going would have been a significant owner of domestic equity. The government was in charge when the Pension Group was established and together pushed through the major pension reform discussed in the background section (Bruenig).
6.5 Key variables of power resource theory conclusion
6.6 Key variables of financialization
The following graphs, charts and accompanying analysis considers aspects of financialization. Key variables of financialization, as opposed to the key variables, evaluated are market capitalization of listed companies, household financial assets and the Gini coefficient. These aspects of financialization translates what an increased presence of finance on the market looks like and why that can lead to increased inequality. Proving financialization and its’ character, is connected to the AP-fund through the changes in SAP and Sweden as a whole. The increase role of finance and inequality are also aspects connected to power resource theory, where an organized working class in Sweden is associated with increased public ownership, some of the variables chosen for financialization below show how the role of finance correlate with increased inequality and the previously demonstrated reduced organization of the working class.
6.7 Market Capitalization of Listed Companies
Market capitalization or market value refers to the share price times the number of relevant shares for companies. Put another way, it is the market value of a company’s equity.
Sweden - Market Capitalization Of Listed Companies (Percentage of GDP)
In the above graph, based on data from the World Bank, the value of swedish companies’ equity rose significantly sometime in the 1990s. In 2012, it was a 103 percent of GDP (Trading Economics).
This is relevant to show financialization as a partial measure of the increased power of markets and capital but can also be a measure of how inequality increased as the next two graphs together will explain
6.8 Household financial assets. SEK billion
Graph 8 Swedish Bankers' Association. Banks in Sweden. 2019.
According to the Swedish Bankers’ Association, the financial assets of households in Sweden have, from 1997 to 2018, increased by close to 200% reaching a level of SEK 5,138 billion. As the above graph and accompanying numbers show, this increase occurred in primarily in mutual funds, bank deposits and shares. An interpretation of this is that households have become more tied to increases in stock exchanges domestically and around the world ( Swedish Bankers' Association 11).
sector, reflecting growth for corporations and households. On the individual level then, wealth has grown especially when tied to equity.
6.9 Increased Inequality
Increases in financial assets for companies and households have also coincided with increased inequality. Below we see the gini coefficient, which measures income and/or wealth inequality where the lower the number, the more distributed. The lines represent different types of housing units. The Gini coefficient was flat in the 1980s, but started increasing in the early 1990s, until flattening again around 0,30.
Gini coefficient 1975-2018
Graph 9 SCB. “Gini Coefficient 1975–2019.” Statistiska Centralbyrån,
In a graph by The Swedish Ministry of Finance, they show how much of this increased inequality, as measured by the Gini coefficient, comes from the increased financial role in the economy, and as shown in the graph below, when excluding all capital income, it significantly flattens the increased gini coefficient.
As financial services and equity played an increasingly important part of the economy, the distribution of ownership of these assets will increasingly reflect the level of equality in the country.
Income inequality in Sweden and the role of capital income
Graph 10 Bastani, Spencer, and Waldenström Daniel. “How Should Capital Be Taxed? Theory and Evidence from Sweden.” The IZA Institute of Labor Economics, Apr. 2018. p, 25.
6.10 Conclusion from key variables of power resource theory and financialization As covered in the background section, some of the main pillars of the Swedish model concerned central wage bargaining, full employment, redistribution and welfare. Reforms in the 1980s and 1990s lowered the strict control of money and finance, partially to prepare the country to join the EU. As clearly laid out in Financialisation and the New Swedish Model by Claes Belfrage and Markus Kallifatides, the 1980s abolished capital controls and credit regulation, while the 1990s floated the current, established the central bank as independent and the most significant pension reform (Belfrage and Kallifatides).
Power resource theory explains the settings of the stage for financialization. Trends associated with financialization increases inequality, the role of financial markets, the power of the market and reduces that of government. However, as has been well demonstrated by now, while there was a reduction in the power of the organized working class, it was still a significant presence, limiting and shaping some limitation of trends associated with
financialization.
7.0 How financialization can be problematized with the AP-funds
7.1 AP-fund laws
In the following section, the ascension and evolution of the AP-fund will be evaluated from key laws and the most relevant arguments and developments will be examined. Malin Björkmo’s report “Four expensive funds?” will be the primary citation for context. The first number after proposition is the year the proposition is brough to parliament.
Proposition 1959:100 – The ATP
In connection with the implementation of the ATP-system, a general pension fund was created, the AP fund.
There were two main arguments for introducing the AP-fund. First, the savings in the fund were meant to contribute to investments in the national economy, seen as necessary to create conditions that would allow for good pensions. Second, to cover long term development of the pension system, the fund was supposed to help match the collection of fees to long term expenditures to avoid future strains. Similarly, it would help finance the growing ATP pensions and act as a buffer for any potential deficits in payments of the ATP system (Björkmo 49).
Administration of the fund was allocated to three different boards depending on the source of financing. The first fund board managed contributions from the state and municipalities, the second from private employers with more than 20 employees, and the third from private employers with less than 20 employees as well as from entrepreneurs. It is unclear why three boards were put in charge of different portions of the collected means of the fund instead of having three separate funds like the assigned government committee had suggested, and which would eventually be implemented.
Proposition 1973:97 – AP-Fund and venture capital
In 1974, a fourth fund board was introduced that had their own office as well as the possibility to invest in Swedish shares. The board was allocated 500 million kronor, just about one percent of the fund’s total capital. The purpose was to contribute venture capital to Swedish industrial companies. According to Malin Björkmo, there does not appear to have been any discussion regarding how the shares as an asset class could have directly contributed to the long term return of the fund. (ibid 50).
Proposition 1987/88:11 – Real estate and a fifth fund board
In 1988, there was an addition to the three funds’ investment possibility where they could now place the equivalent of five percent of their assets in real estate. Introduced in the same year was a new fifth fund board given the same directions as the fourth fund board. The proposition made clear the expanded opportunities afforded to the fourth and fifth fund board was meant to contribute to the business community, especially to small and medium sized companies in need of venture capital and partially based on a regional basis. For both the fourth and fifth fund boards, they were allocated one percent of the acquisition value of the first three boards respectively, however Björkmo point out that the number of shares relative to the total capital was low (ibid 50).
Proposition 1983/84:50 – Wage Earner Funds
In 1984, five Wage Earner Funds were established. In Rudolf Meidner’s report he had suggested three goals for the funds: to complement the solidaristic wage policy, have greater worker influence on the economy, and lessen wealth concentration. The eventual watered down version emphasized more higher profits of firms and risk capital to encourage investment in the economy (Whyman 415).
from all the WEF yield from 1984 to 1991 was 15 percent, comparable to the average yield of private funds operating at the time (ibid 427).
Proposition 1991/92:36 – Dismantling of the WEF
The Wage Earner Funds were dismantled in 1992 where their assets and liabilities were transferred to a common fund called Fond 92-94. This common fund both handled management and distribution of the assets accumulated by the wage earner funds totaling 28 billion kronor (Björkmo 51).
Proposition 1991/92:69 Privatizing of state-owned enterprises.
This proposition from the rightwing government likely facilitated the largest reduction in public ownership. It is notable in that it directly addresses the buildup in public ownership like with the AP-fund and WEFs and sees it as a positive that the focus on equity among individuals is a positive development especially as it concerns more risk capital.
Proposition 1995/- 96:171 – A sixth fund board
In 1996, under a SAP government, the common fund from the WEFs was transferred to a sixth AP-fund board. Parliament additionally transferred 10 billion kronor to the new fund. The sixth fund was mandated to invest venture capital into small and medium sized Swedish companies, especially unlisted private companies. The official argument given for this was that it would benefit economic growth and employment levels.
Proposition 1999/2000:46 – The AP-fund in the reformed person system
The current main AP-fund framework that still exists as of 2021, emerged in connection with the large pension reforms in 1998. Here the pension system was set up to be self-financed and gave the funds a clearer purpose as buffer to the system (ibid 51).
The pension reform freed the AP-funds from the financial responsibility of covering the ATP early retirees. It also increased contributions for pensions which is what motivated the transfer from the original ap funds to the treasury. The new four funds got identical placement rules and the freedom to invest much more in equities and in foreign markets. The named sixth ap-fund, now technically the fifth buffer fund, kept its name and its special investment guidelines (ibid 52).
SFS 2000:192 – National Pension Insurance Funds Act
After 2001 the new pension system was implemented. National retirement pension is split between earnings related pension and the premium pension. From an individual’s salary, 16% goes towards earnings related pension and 2.5% towards the premium pension or PPM with its connection to the seventh AP-fund, covered in the background section. The system is PAYG, meaning workers today cover the income of pensioner today. Phrased another way, the 16 percent portion of salaries paid as pension income today do not decrease the means of the AP-funds, but the first to fourth AP-funds cover potential shortages should the PAYG payments be insufficient, hence the term buffer for these funds, where they each contribute one fourth of the potential required amount (Riksdagsförvaltningen).
In the Swedish National Pension Funds Act we see the directives guiding the investment decisions of the First-Fourth AP fund as well as the Seventh.
web.archive.org/web/20071028085222/www.ap1.se/sv/Vart-The website of the second AP fund provides a clear demonstration how the choices in the strategic portfolio has evolved from its inception in 2001 to its increased diversification in the year 2020.
Second AP-fund Strategic portfolio 2001
The 2001 portfolio, has a clear divide between equities and fixed-income of 60 percent in Sweden and 40 percent in foreign equities. Over time the fund would diversify while remaining within the investment mandate.
Second AP-fund Strategic portfolio 2020
Beyond diversification, we see an increased proportion of equities as percentage of the fund’s capital, especially foreign equities concentrated in emerging and developed markets . The second AP-fund website describes the ALM model as simulating the pension system’s annual development over a specified horizon of 30 years, then from these
Proposition 2019/20:57 - Changes in the National Pension Insurance Funds Act Since the National Pension Insurance Funds Act went into effect, there have been several additional laws expanding on what the Funds can invest in, like using less of its’ means on interest bearing securities.
As of 2019, Proposition 2019/20:57 bore responsibility for certain changes to the National Pension Insurance Funds Act. The first AP-fund lists the changes on their website.
New investment rules for the First-Fourth AP-funds
Exhibit 2 AP1. “Investment Rules.” AP1, 25 Mar. 2020, www.ap1.se/en/our-investments/investment-rules/.
The intention, from the Pension Group, behind the changes to the funds was to increase cost effectiveness, have greater return and long-term opportunities with illiquid assets investments like those of comparable institutional investors.
Another big change for the First to Fourth AP-funds was a mandate on sustainability in their investments, something discussed at length in the most recent report on the AP-funds’ operations.
Skr. 2019/20:130 – Annual report on the AP funds' operations
The latest official evaluation of the AP funds’ performance by the government was done up until 2019. The report had most of its work outsourced to consulting firm McKinsey and focuses some of its content on general performance and cross fund economies of scale but especially on the funds’ ongoing targeting of cutting carbon and how they consider sustainability in their investing. In 2019, the First-Fourth and Seventh AP fund increased their value by 240 billion kronor after cost, equivalent to a collective return of 17,4 percent. They compare this to the average return from all the funds since 2001, which has been 6.4 percent per year. They conclude that the buffer funds system has therefore contributed positively to the long-term financing of the general income pension system, fulfilling its original intention.
The buffer funds return largely follow in line with developments in the financial markets and, at the onset of 2019, they wielded 1596 billion kronor all together. As previously mentioned, the funds are connected to developments in the income index, McKinsey helpfully connects these concepts in the translated presentation below (McKinsey 2).
The buffer funds' reported return compared with the income index and total fund capital (percent and SEK billion)
2019 2018 2017 2016 2015 2014 2001-2019
Income index (%) 3,1 1,5 3,7 2,0 2,1 0,5 2,9
Return (%) 17,4 -0,2 9,2 9,7 5,5 14,1 6,4
Return (billion kronor) 240 -2 121 118 65 147 1188
Net flow pension system -27 -28 -30 -27 -21 -21 -187
Total Fund Capital 1596 1383 1321 1321 1230 1185
been adequate to cover the pensions pensioners are entitled to, which triggers money being drawn from the funds.
The funding of the system is split between the ‘avgiftstillgångar’ or the fees calculated based on long-term prognoses and the development of incomes and from the AP funds (Fjärde AP-fonden). At the end of 2019, the fees accounted for 84% of the funding and the AP funds 16 percent, in 2001 they covered 10 percent of the funding in the income pension system (McKinsey 2).
Every individual AP-fund board pick their own aspirational return target, this target is evaluated on a long term basis and investment options are done with that consideration. McKinsey’s evaluation of the buffer funds finds the return on the buffer funds are in line with foreign pension funds with similar missions and size. The aspirational long term return target also explains the greater concentration on equity and other alternative assets. McKinsey considers the funds to have done an adequate job with investing and risk spreading, perhaps revealingly, they specify that it is a job well done within the legally given investment placement rules. In the government report, they consider the expanded placement options for the First to Fourth AP funds that were enabled the first of January in 2019 that were not only to help the funds achieve their goals but to make them consider sustainability in their investments. They also note that the additional possibilities that will be enabled to increase cost effectiveness and long term planning in terms of placement in illiquid assets (McKinsey 3).
In the report, it is specified how the deficit since 2009 has been underfunded solely through the PAYG system in demographic terms. There was a numerically larger generation born in the 1940s, that have now started to retire and to receive their pension. According to the Swedish Pension Agency, the First to Fourth AP fund will continue to finance the pension system for the foreseeable future. In the report, the projected flow from the funds was up to 34 billion kronor, which is about 2 percent of the value of the funds at the beginning of the year. Further projections of the combined years of 2020-2023 will be a transfer of 126 billion kronor, or divided by 4, 31.5 billion kronor per year, which is more than any of the featured years in the presentation above (ibid 15).
7.3 Increased collaboration
Touched upon but not explicitly discussed is the idea of having several funds as opposed to just having one, a design that embodies the reoccurring ideological, political and economic debates. Whether it is the old system with multiple AP fund boards in charge of different sections of collected pension taxes, five Employee Wage Earner Funds, or today with the five AP buffer funds and the seventh AP fund, it seems important in Sweden to have this allocated structure. It is not inherently superior to split up a fund in several parts as there is a loss of economies of scale, so what has been the main argument?
In a 2012 report, requested by Sweden’s National Pension Fund Inquiry to the OECD, titled “Review of the Swedish National Pension Funds” Clara Severinson and Fiona Stewart review the funds based on international good practice and the OECD guidelines. One of the things examined is whether the four-fund structure is effective, especially considering how it is unique in the world of global pension funds. It is unclear why they emphasize four funds, while excluding the fifth buffer fund (named the sixth AP fund), perhaps because that one operates on a different investment framework. The report cites previously mentioned Malin Björkmo and fellow pension writer Stefan Lundbergh’s paper “Restructuring Sweden’s AP Funds for Scale and Global Impact” for context of why the funds were originally split up.
Originally dividing up the AP funds was meant to reduce the impact on domestic markets, diversify risk in management and strategy, improve returns by having them compete with one another, and to discourage political interference of the funds. Summary of arguments against having several funds include: higher costs like less economies of scale, less consolidation of expertise and board members. It is also possible to have stronger governance and resilience from pressures outside of the fund with one large fund (Björkmo and Lundbergh).
A specific issue pointed out by the OECD pertains to the investment mandate of the AP funds regarding long term investment which is to maximize returns without unnecessary risk. The mandate’s interpretation is done individually by the funds, apparently leaving investment objectives “disparate and inconsistent” perhaps in line with the goal of diversified investments but makes it harder to measure the funds’ performance against a specific target (Severinson Stewart 7). The report provides suggestions for improvement, one of which is to have an independent committee make decisions pertaining to interpretations of long terms investments, performance measurements, and how to nominate members to boards (ibid 8). Björkmo and Lundbergh’s mentioned 2010 paper addresses how the AP funds, when they were designed, were thought to make efficiency gains based on competition between one another, however the paper makes the case this did not occur due to agency costs. Some arguments from the paper won’t be addressed due to their suggesting pertain to being in close proximity to the 2008 financial crisis. The portfolios of the Funds looked more similar in 2010 compared to 2021 when for example the fourth AP-fund has significantly more equities than the other funds.
The authors cite a report by the independent think tank the Expert Group for Studies in Public Economics (ESO) regarding economies of scale. ESO channel research showing negative relationships between the size of a fund and costs (the cost being a percentage of the fund’s size). They also point to patterns of net return increasing more than costs are reduced and speculate that this may be due to the fact that is easier for a large fund to attract competence, better governance and enable more advantageous investment prospects. CEM Benchmarking Inc. gives a numeric estimation of how much would be saved if the first four AP Funds were made into a single fund, using their international database of pension funds, and arrive at $50 million per year. Using the pattern of net return increasing more than costs are reduced, the authors estimate results of $100 million per year (ibid 35).
Reports such as the ones referenced as well as the desire of the AP-funds to reduce agency costs have led to increased collaboration.
Cooperation Council works on further ways to collaborate between the funds. In this report, beyond an extensive analysis of the carbon cutting measures of the funds, notes the increased IT collaborations (McKinsey 90).
In the report, the government gives commentary on the nature of the collaboration where they encourage further exploration of possible collaborative opportunities but note that these collaboration should not go against the independence and diversification of the model (ibid 89).
7.4 Increased ethical consideration
In 2007, the First, Second, Third and Fourth AP-funds founded The Council on Ethics. The Council on Ethics aims to use the assets under their management to influence companies in regards to corporate social responsibility (CSR) in regards to ethical, environmental and sustainable considerations. These aims are derived from the AP-funds’ common core values which are based on those of the Swedish state’s values. The values of the Swedish state is determined from laws and by what international agreements have been signed. The Council collectivizes the AP-funds’ means to influence companies, not just through votes but primarily through dialogues and talks. Active dialogue is often done with other investors and according to the council it is: “an effective tool that produces results” which appears to be sustained by some of their documented successes. While the primary stated goal of the council is to affect companies through investments and work, the council may also exclude companies.
Described as a last resort, if dialogue does not produce tangible results and prospects for the future look bleak, the Council will call for exclusion, meaning all four funds will disinvest from the company. If circumstances change they may be removed from this list. At the moment, there are 17 companies excluded (The Council on Ethics).
Ethics have also recommended exclusion of a number of Canadian companies since Canada legalized cannabis in 2018. The justification for the exclusion refers to: “a number of UN conventions have rules on narcotic drugs and Swedish parliament has ratified these” however presumably if cannabis was made legal in Sweden, these companies would no longer be excluded, meaning laws do directly impact the AP-funds in the political dimension despite the original intention being they should not be influenced as such (The Council on Ethics).
7.5 AP-funds problematizing financialization conclusion
8.0 Thesis conclusion
In a parliamentary debate regarding the 2018 Annual AP-fund report, Mattias Karlsson of the rightwing Moderate Party discussed changes to the AP-funds. One of the upcoming changes was for the funds to consider sustainable issues, which his party fully supports as part of the Pension Group, but he also points out that the funds largely exist outside of the political system and should focus on returns, not on activism. Where activism ends and changes to laws for sustainable considerations in investing start, seems like a gray area, but has to be one of answers as to why the funds can have rightwing support in the increase of size and scope for the funds (Riksdag).
Another example of the Pension Group can be seen in proposed changes, pushed for by the Social Democrats, to the AP-funds in 2015 that would have consolidated the first five ordered AP-funds into three and had a central board in charge of all three funds. The rightwing parties of Moderate Party and the Liberal Party especially disagreed with the central board as they saw: “a risk for political control” Annika Strandhäll from SAP claimed the proposal failed partially because the Moderate Party ruined negotiation by speaking out in media (Garcia). LO also offered criticism of the proposal, notably wanting increased ability of the funds to invest in individual companies and more presence on boards. LO further describe the pension group’s proposal as “if it ain’t broke don’t fix it” where it is unclear what major problems the changes are meant to address, further evidence of the political stability of the funds and how the organized working class may wish to further change it (Hållö).
The thesis set out to answer the research question of the Swedish government investment AP-funds having grown in size and scope since the reform of 2001 despite an overall trend of financialization since the 1980s. The qualities of growth, scope, are elements derived from the theory of financialization. Trends from financialization have been explored like the increased role of finance and can be connected to changes explored through power resource theory that correlate with reduced power of the organized working class.
Works Cited
Ahnland, Lars. “Financialization in Swedish Capitalism: Debt, Inequality and Crisis in Sweden, 1900-2013.” Stockholms universitet, 2017.
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web.archive.org/web/20071028085222/www.ap1.se/sv/Vart-uppdrag2/Placeringsregler2/.
Barr, Nicolas. Ministry of Finance, 2013, The Pension System in Sweden.
Bastani, Spencer, and Waldenström Daniel. “How Should Capital Be Taxed? Theory and Evidence from Sweden.” The IZA Institute of Labor Economics, Apr. 2018.
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Björkmo Malin. 2009, Fyra Dyra Fonder? Om Effektiv förvaltning Och Styrning Av AP-Fonderna.
Björkmo, Malin, and Stefan Lundbergh. “Restructuring Sweden’s AP Funds for Scale and Global Impact.” SSRN Electronic Journal, 2010, doi:10.2139/ssrn.1618831.
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