| Summary: | This paper discusses a portfolio endowment policy as an alternative to conventional
privatization policies. The portfolio endowment policy endows each citizen with a
financial instrument representing a portfolio of state-sponsored enterprises. The policy
is analyzed in terms of efficiency and fairness. Potential efficiency advantages include
easier logistics (since the endowments are automatic) and financial diversification (due
to the portfolio effect), although specific cases where the policy is not a theoretical
optimum are demonstrated. Fairness results from equality of opportunity for all
citizens, avoiding the worsening inequality and public opposition associated with
conventional privatization policies. Feasibility is also addressed, including effective
corporate governance for a wide shareholder base. This policy analysis demonstrates
that the portfolio endowment policy is feasible, with important potential benefits, and
merits serious consideration. It concludes with a topical application in the Mideast
relevant to international peace and secu
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