Books in Dialogue: GLOBALCIT Review Symposium on Yossi Harpaz, Citizenship 2.0 and Jelena Džankić, The Global Market for Investor Citizenship

The Global Market for Investor Citizenship: A Response to Reviewers

Jelena Džankić, European University Institute

I am grateful to the Global Citizenship Observatory (GLOBALCIT) for organising this Review Symposium, and for putting my book The Global Market for Investor Citizenship into dialogue with Yossi Harpaz’s Citizenship 2.0: Dual Nationality as a Global Asset. A heartfelt thank you also goes to the four commentators –  Rainer BauböckAshley Mantha-HollandsSzabolcs Pogonyi, and Jo Shaw – for elaborating upon their initial thoughts about these two books, which were first placed side by side at the 2019 GLOBALCIT Annual Conference The Value of Citizenship for Individuals and States.

Global Market and Citizenship 2.0 both speak about how the institution of citizenship has transformed to accommodate different forms of membership in an ever-globalising and (presumably) hypermobile world. While we may have forgotten the value and experiences of mobility since the onset of the COVID-19 pandemic in March 2020, we have certainly had the opportunity to reflect on the significance of citizenship for us, as individuals, and for states as they come to grips with the greatest health crisis in over a century. In a similar way to Harpaz’s book, Global Market explores how citizenship has changed, but develops its narrative by unpicking the links between property, financial assets and the different hierarchies of membership that existed throughout history. Unlike Harpaz, who sees a unidirectional shift from citizenship as a ‘sacred’ status of membership to a (nearly) ‘commodified’ item, I understand this transformation as a long-term, complex and stepwise series of processes that continuously redefine the notion of citizenship.

The ‘grand transformation’ of citizenship is perhaps most commonly associated with the period right after the end of the Second World War, when we started to identify this notion with the Arendtian ‘right to have rights’ and the internal equality of membership. Needless to say, this ‘absolute’ internal equality of membership is a perhaps utopian goal to be reached in a world where the intersections of gender, race and class may still adversely affect the status and rights of citizenship. We should not forget that the nationality of children of non-heterosexual couples is a stumbling block in many liberal democracies; that immigrants who do not meet the income thresholds are disqualified from naturalising; that inadequate birth registration procedures in the global South create exclusion; that there was no female suffrage in Switzerland until 1957, and that women fully enfranchised only in 1971; or that in Liechtenstein women could first cast their vote in the 1986 elections. Hence both the past and the present of citizenship point to hierarchies and inequalities of membership. They are just reflective of – and otherwise articulated in – different contexts.

This, perhaps, is a point where Global Market differs from Citizenship 2.0. My book does not start from the premise that citizenship has ever been a ‘sacred’ status. Rather, it argues that, historically, it has been a marker of the internal hierarchies of membership. Not all of those internal hierarchies have completely disappeared. Nonetheless, they have – at least ostensibly – faded out enough for citizenship to become associated with the opportunities that one would have by virtue of being born in one country and not in another. While indeed, as Branko Milanovic (and others), claimed – there is ‘a citizenship premium’ and being born in what Harpaz defines as a ‘higher tier’ country by default affects one’s mobility and future income opportunities, many other factors are neglected if citizenship is taken as the sole determinant of such opportunities. Global Market, in fact,argues that wealth inequalities in the developing countries are what makes the sale of passports possible. Enhanced mobility through passport purchase is however reserved only for those who are already privileged in their own community. In other words, as throughout history, when the affluent could buy their way into titles as a ‘higher tier’ of privilege, today they can benefit from the advantages of citizenship of a ‘higher tier’ country.

In this context, Bauböck rightly points out that passports purchased by the high-net-worth individuals (HNWIs) are “luxury goods that do not belong to life’s essentials but help to raise the owner’s prestige”. In Citizenship 2.0, Harpaz also observes that, for those acquiring citizenship of a ‘higher tier’ country through ancestry, the second passport becomes, inter alia, a status symbol in the country of residence. Yet, chances are that this second citizenship will have a different value and will be put to different uses by those who received it through ancestry and those who purchased it. Citizenship through ancestry, as Harpaz also highlights, need not be only instrumental. Naturalisation may also lead ancestral citizens to develop a sentimental outlook or an identity component vis-à-vis the country of new nationality (e.g., by examining family history).  This does not mean that they do not put their new citizenship to instrumental use. Ancestral citizens (whose number exceeds that of investor citizens by far), make use of their second passports to increase their income and wellbeing opportunities more often (e.g., by moving). They are also more likely to participate in elections, even if external citizens often support right-wing parties. By contrast, investor citizens use their new passport as a visa-free mobility enabler, rather than as a tool for migrating; presumably, HNWIs would not depend on the educational and healthcare opportunities in their home state even without the second passport. Most of them are not active participants in their new country’s social life and remain detached from its political processes. As Bauböck observes, in both cases – with some subtle differences – beneficiaries of these provisions have an instrumental attitude towards their second nationality. It provides them with something that their citizenship of origin does not have, be it life opportunities, visa-free access to other countries, a ‘certificate’ of a cultural connection to an ancestral land, or an ‘attestation’ of prestige compared to their co-nationals.

Yet what can we say about the states operating ancestral and investor citizenship? In this regard, Mantha-Hollands makes several crucial points, especially as regards the presumption of a connection “between the individual and society based on how that society conceives of its membership (the content of the citizenship)”. Similar to Bauböck, she questions why we can accept some instrumentalist approaches to citizenship, such as the ancestry-based ones, while rejecting others, such as the sale of passports. By raising this issue, Mantha-Hollands also highlights the point of disagreement between Global Market and Citizenship 2.0: the presumption of the ‘sacred’ nature of citizenship. In Global Market and in my earlier work on citizenship policies in contested states, I unpicked the mechanisms through which states articulate their vision of membership and construct their citizenry. Hence, while citizenship is neither reifiable nor sacred, it is a crystal-clear mirror of ‘the state of the state’ that governs it. Phenomena that Harpaz and I look at reflect this principle: ancestral citizenship is a mechanism for the state to project its foreign policy abroad, compensate for a historical wrongdoing, or reach out to traditional emigrant communities; investor citizenship programmes can provide quick infusions of capital into states’ economies. And if we look at which states operate these programmes, we realise how citizenship policies reflect various interests – ranging from state and nation building domestically, to constructing external networks for sustaining revenue from diaspora in the long-term, to a ‘quick fix’ of the state’s economic downfall. If, by contrast, we look at who benefits from these external citizenship policies, we arrive at Harpaz’s idea of “compensatory citizenship”, which indeed embodies a plethora of the different uses of citizenship. Looking at the different approaches that Global Market and Citizenship 2.0 take in this regard enlightens why we diverge on the idea of a ‘sacred’ citizenship.

But if citizenship is not ‘sacred’, can ancestral citizenship be more acceptable than the sale of passports? Are the two just two sides of the same coin? Yes and no. Both practices are problematic in their own right. Importantly: just as objections to ancestral and endorsement of investor citizenship should not immediately be framed as cosmopolitanism, the opposite should not be denoted as nationalism a priori. Ancestral citizenship policies have often been adopted to create large communities of external citizens, commonly on the basis of real or presumed cultural ties, or as a remedy of a historical wrongdoing. As such, they reflect what Pogonyi has referred to as the “symbolic boundaries of nation-states”, but also the modern societies that they represent. Investor citizenship programmes aim at an immediate inflow of capital in the state, create a small pool of external citizens who are disengaged and thus detached from communal solidarity. This in itself is not the main problem of investor citizenship. Rather, it is the fact that the sale of passports is a “lucrative business” as Pogonyi says; a business that nowadays involves a growing interaction between local political elites and a transnational structure of third-parties, referred to as the ‘citizenship industry’. In the last decade, this interaction has proven to have taken place in way that revealed numerous problems from the standpoint of good governance. These include but are not limited to corruption at different levels of government (bribery of public officials), money laundering, security issues, and distortion of democratic processes as in the case of interference of the citizenship industry in the St. Kitts and Nevis elections. Pogonyi rightly picks up on a further contentious aspect of investor citizenship – the impact of these programmes on the less developed countries. The HNWIs from the middle- and low-income countries transfer a share of their wealth to the “higher tier” countries. This means that their assets – which in most cases have roots in their country of origin – will contribute to further development of a country that is already better off than the one from which the wealth originates. So, indeed, Pogonyi makes an excellent summary of core argument of Chapter Five of Global Market, which is that the “same opportunity that enables elites of less developed countries to catch up with the global North will leave the global South even more impoverished”. Investor citizenship thus mirrors huge wealth inequalities in places of origin of the beneficiaries of these programmes, while simultaneously deepening wealth inequalities between the developed and the developing countries.

In this sense, Jo Shaw observes that both Global Market and Citizenship 2.0 “provide solid comparative evidence that will help to nuance the ongoing debate about the transformation of citizenship due to globalisation”. This transformation entails a constant reproduction and re-articulation of the idea and practices of membership in modern polities, may they be local, regional, national or thrive beyond the borders of states. What is at the heart of the ways in which polities constitute, maintain, and reproduce their membership? While highlighting that both compensatory and investor citizenship are indeed creatures of (particular types) of governments (Orgad 2018) and of (particular modes) of governance (Shaw 2020), the two books do not subscribe to a singular and unidirectional vision of citizenship. In a globalising world, the notion of sovereignty is constantly re-envisioned – be it as a result of changing territorial borders, transnational networks and actors, populism, or crises ranging from conflict, to environmental disaster, to – most recently – pandemic. And so is citizenship.

As COVID-19 has shown, neither compensatory nor investor citizens have ‘rushed’ to the countries of their second nationality in search of a safe haven. Reportedly, some countries with high numbers of external citizens have issued public pleas to those individuals to “stay where they are”; there is also some anecdotal evidence of non-resident passport holders being denied entry at the border. So, in a way, instrumental citizenship co-exists alongside – what Shaw (2020) would define as – ‘constitutional citizenship’, which presumes ‘full membership’ rather than ‘a menu of rights’. But does this mean that citizenship is changing from point A to point B? Again, I would reiterate the idea, I tried to thread into the Global Market – that cohabitation of different types of membership is very much characteristic of the notion of citizenship, if we take a holistic approach to the meaning of ‘membership in a polity’ – in terms of legal statuses, rights they entail and identities and practices that they produce.