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Exporting the Alaska Model: Adapting the Permanent Fund Dividend for Reform
around the World. Edited by Karl Widerquist and Michael W. Howard.

Article  in  Eastern Economic Journal · January 2014

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Alaska’s Permanent Fund Dividend. Examining its Suitability as a Model. Edited by Karl Widerquist and
Michael W. Howard. Palgrave Macmillan, New York, 2012. xvi+267pp. ISBN: 978-0-230-11207-0

Exporting the Alaska Model. Adapting the Permanent Fund Dividend for Reform around the World.
Edited by Karl Widerquist and Michael W. Howard. Palgrave Macmillan, New York, 2012. Xviii+291pp.
ISBN: 978-1-137-00659-2

Evelyn L Forget
University of Manitoba

Both of these books examine the Alaska model – the combination of a publicly held asset fund financed
by income from publicly held assets and known as the Alaska Permanent Fund (APF), and the dividend
paid from that fund to all citizens of the state, called the Permanent Fund Dividend (PFD). Part I of the
first book discusses the history and impact of the model, while part II considers its ethical justification.
The second book investigates the applicability of the Alaska model to a variety of economies, including
those without vast resource wealth, asks why most of the sovereign wealth funds around the world do
not pay dividends, and ends with a proposal for an expansion of the Alaska model. Most of the articles in
these two books were presented at the 2011 Basic Income Guarantee Congress, held in conjunction with
the Eastern Economic Association, or at the Conference entitled “Exporting the Alaska Model”, held at
the University of Alaska in Anchorage that same year.

The attraction of the Alaska model is simple: every year since 1982, every child and adult in the state,
has received an unconditional payment. The dividends are typically on the order of $1,000 to $1,500,
although 2008 was a bonanza year in which each state resident received $3,269. The editors of these
books were initially attracted to the Alaska model because they see it as an application of the idea of
Basic Income (BI), an idea that has occupied Karl Widerquist for many years, and more recently Michael
Howard. The very idea of Basic Income is controversial. The Alaska model, by contrast, can be
characterized as an application of BI that continues year after year as one of the most popular
government programs in the country.

In Alaska’s Permanent Fund Dividend, Cliff Groh and Gregg Erickson recount the storied beginnings of
the APF and PFD (ch. 2), describe how it works in practice (ch. 3) and analyze the challenges the scheme
has faced (ch. 7). Scott Goldsmith discusses the economic and social impact of the PFD, noting that no
social scientific evaluation of the scheme has been conducted to determine whether, in fact, there are
health and educational benefits to the program. He also suggests that the PFD may have a political
impact, reinforcing individual sovereignty at the expense of social cohesion. In contrast, James Bryan
and Sarah Lamarche suggest that the APF and PFD, in combination, may work to benefit future
generations. Michael Lewis discusses risk management.

Part II of Alaska’s Permanent Fund Dividend focuses less on history and more on philosophy, attempting
to connect the Alaska model to the BI debates. Here, the authors argue about whether the model is a
left-libertarian policy (Carter), whether it promotes liberal egalitarian principles or civic republican
virtues (de Wispelaere and Casassas), whether it should be seen as a BI scheme (Zelleke) or an
application of stakeholding (Griffin). Stephen Winter worries that that the PFD implicates citizens in the
oil industry. The editors return in a final chapter to assess these concerns, emphasize the link between
resource taxation and BI, and explore alternative theories of social justice.

Exporting the Alaska Model, the second book by the same editors, revisits the ideas introduced above
and isolates “lessons” from the Alaska model that may be applicable in other settings. Part I examines
the applicability of the model to resource-rich economies. Hamid Tabatabai (ch. 2) examines Iran’s
experience with a resource dividend not supported by a sovereign wealth fund, while Angela Cummine
investigates the many sovereign wealth funds (SWF) around the world that, unlike the APF, do not pay a
dividend. Alanna Hartzock (ch. 4) and Cliff Groh (ch. 5) take us back to Alaska and examine the future of
the Alaska model in Alaska under different presuppositions.

In Part II, the applicability of the Alaska model in less resource-rich economies is considered. Is it
conceivable to talk about a SWF without resource rents? Gary Flomenhoft (ch. 6) uses the resource-poor
state of Vermont to argue that “free” resources are internalized by corporations that sell these
resources back to their “natural” owners – the citizens of the state. As a consequence, even a resource-
poor economy could support a SWF akin to that of Alaska. Paul Segal discusses the implications for
reducing poverty around the world through the expansion of the Alaska model (ch. 7), while Jason Hickel
looks specifically at its potential for South Sudan (ch. 8). Jay Hammond’s posthumous contribution,
somewhat unexpectedly, appears as chapter 9. Hammond was the fourth governor of Alaska, and
sometimes characterized as the father of the PFD. His chapter asks whether exporting the Alaska model
to Iraq would have beneficial outcomes by sharing that nation’s resource wealth more broadly. Next is a
chapter by Michael Howard that examines a “cap-and-dividend” approach to controlling carbon
emissions in the US, whereby carbon emissions are sold to the highest bidder and the proceeds
distributed to all citizens through a dividend. Karl Widerquist then examines the feasibility of scaling up
Alaska’s PWF to the entire US, and finally discusses the sustainability of the Alaska model in Alaska itself
as resource rents diminish.

Part III of Exporting the Alaska Model feels like the heart of the argument. Widerquist introduces a
proposal to introduce Citizens’ Capital Accounts (CCAs) which would assign to each individual at birth a
portion of the principle of a SWF (ch. 13). Individuals could decide when and how to draw dividends, but
he principle would remain intact for future generations. Subsequent chapters allow contributors to
respond to Widerquist’s proposal. The final chapter of the book summarizes some of the arguments and
suggests that the lessons of the Alaska model ought to be considered a “menu of options” for
governments around the world.

These books are published as part of a series on Basic Income, although the editors are careful to point
out that the PFD is not the only form that a Basic Income might take, nor is there a requirement that a
Basic Income be financed through a SWF. Any reader must, therefore, be careful not to generalize
findings about the Alaska model to other Basic Income schemes. The obverse is equally true: one can
understand and evaluate the Alaska model with no reference to the broader philosophical debates
 about Basic Income. Nonetheless, the editors believe that the Alaska model represents one Basic
Income scheme that has been very successful in practice and offer these essays as evidence.

Like any collection of essays, these books address many different audiences. Indeed, these are vast,
sprawling books that offer a wide-ranging and enjoyable romp through a great deal of intellectual
territory. They will offer sustenance to those with philosophical predispositions who enjoy academic
debates about theoretical cohesion. Those of us with more pragmatic tastes will focus on essays such as
Michael Howard’s excellent evaluation of the Alaska model as a cap-and-dividend scheme in the context
of climate change. I missed from these collections an empirical investigation of the social and economic
impact of the Alaska model that would take Groh’s observations to another level, although I recognize
that the analytical difficulty of such an evaluation is beyond the scope of the current collections.

These books represent an excellent and long overdue examination of a significant and unique
government program. They belong in every university library. I would, though, like to end this review
with a challenge. The editors believe the Alaska model to be a good test of one variant of Basic Income.
Basic Income is once again having its moment: in recent months it has appeared in the New York Times,
the Globe and Mail, the CBC, the Economist and a variety of North American and European
newsmagazines. It is being debated in European parliaments, and serves as the basis for a variety of
conditional and unconditional cash transfer schemes around the world. The idea has not had so much
attention since the 1970s. This is the moment for academic investigations to inform policy debate.
However, the one audience that the current collections do not address is that of on-the-ground
policymakers. There is a large literature about “knowledge translation” and “research to action” that
agrees on one point: academic debate does not inform policy unless there is a concerted effort to
communicate in a reasonable way with policymakers. If you give these collections of essays, which range
over 600 pages from Thomas Paine to climate change, through the territories of civic republicanism and
liberal egalitarianism, to your very busy local member of parliament, they are not likely to have much
impact in the House. Indeed, in the policy circles with which I am most familiar, the convention is that
no matter how complex an issue, it must be synthesized in 24 pages. These 24 pages should have a 2-
page summary that can serve as the foundation for a 1-page briefing note for the Minister. This note
addresses one question: “what do I need to know today about this topic to take a consistent and
intelligent position and to answer questions in the House”.

What is missing from these collections, and from the academic debate on Basic Income more generally,
is a coherent and focused pragmatic policy discussion.

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