The New Wave of Nationalization
Source details
- Canonical URL
- The New Wave of Nationalization
Other formats
Bibliographic details
- Authors: Nicholas Mulder
- Published: June 2, 2026
Overview
- Governments are taking over private enterprises and resources at the fastest pace in 50 years.
- Since 2020, governments on every continent have nationalized properties held by their own citizens and by foreign investors.
- The current wave is the fourth great wave of nationalizations in the past 100 years and reflects interactions among political urgency, monetary conditions, and capital mobility.
Key statistics and factual findings
- Russia has seized more than $48 billion in ports, factories, and consumer businesses since it invaded Ukraine in 2022.
- The United States took a dominant ownership stake in the country’s only domestic rare earth producer.
- Although the valuations are disputed, $239 billion–$544 billion in assets was nationalized between 2016 and 2026 alone.
- Between 1931 and 1935 the United States nationalized about a third of financial capital.
- In Germany more than half of bank capital became state owned (1930s).
- Italy nationalized 20 percent of private industrial and financial assets from 1931 to 1933.
- UN membership grew from 51 nations in 1945 to 127 by 1970.
- Research by Stephen Kobrin shows the pace of property takeovers accelerated and peaked in 1975, when 28 countries carried out 83 expropriations—one every four days, on average.
- Between 1971 and 1980, developing economies nationalized at least $26 billion in foreign-owned property, or 11 percent of total foreign direct investment in the developing world in 1980.
Drivers of the 2020s wave
- Geopolitical instability.
- Commodity market disruptions.
- Renewable energy development and the strategic desire to control minerals for renewable technologies.
- National security considerations and strategic competition.
- Broader acceptance of interventionist economic policies and the political conviction that nationalizations are a vital instrument of economic policy in an era of geoeconomic fragmentation.
- “Demonstration effect”: successful nationalizations signal ease and desirability of similar policies to other governments.
- Inflationary environments lower the real cost of compensated buyouts, facilitating nationalizations.
- The rise in nationalizations despite high capital market integration indicates strong macroeconomic and geopolitical forces favoring takeovers.
Historical context — three prior waves
- First wave: 1930s
- Triggered by the Great Depression and the collapse of free trade and capital flows.
- Large-scale interventions to fend off financial system collapse; examples include banking nationalizations and takeover of strategic industries.
- Advanced economies’ nationalizations reduced global trade and investment and contributed to market segmentation.
- Outcome: prevented bankruptcies in the short run, increased policymaking autonomy, and helped shape the postwar international economic order.
- Second wave: Late 1940s
- Followed World War II amid the Bretton Woods fixed-exchange-rate regime and rising public investment.
- Nationalizations were broader in sectoral focus, more systematic, and implemented more gradually than in the 1930s.
- Examples: UK nationalized the Bank of England and multiple utilities and industries; France took over the Banque de France, private institutions holding 80 percent of bank deposits, and several major industries.
- Resulted in rapid postwar growth, with state-owned enterprises mobilizing large sums for investment.
- Third wave: 1970s
- Fueled by decolonization, the end of the Bretton Woods system (Nixon’s devaluation in August 1971), and the 1973 oil crisis.
- Commodities and natural-resource nationalizations expanded; the 1970s wave was broader, longer, and involved more valuable resources than prior waves.
- Inflation made compensation cheaper in real terms, encouraging takeovers.
- International effect: created an overhang of sovereign debt for many developing economies, contributing to the debt crises of the early 1980s.
- The wave was curtailed by contractionary monetary policies adopted by the Federal Reserve starting in 1979, which brought down inflation and slowed global growth.
Forms and legal instruments
- Nationalizations vary in form:
- Outright confiscations.
- Compensated expropriations.
- State-facilitated transfers of assets from one private owner to another in forced sales.
- All approaches use political and legal instruments to bring private property under national control and renegotiate the relationship between the state and capital.
- Not all nationalizations assert permanent state ownership; some are temporary, crisis-driven, or ultimately reversed.
Economic and geopolitical implications
- Geopolitical nationalizations increase the riskiness of foreign direct investment between strategic adversaries.
- These takeovers will change but not necessarily slow global economic and financial integration.
- Possible realignment of flows:
- More trade, lending, and investment may occur within geopolitically aligned blocs.
- Neutral states can attract foreign capital by positioning themselves as reliable intermediaries and safe destinations for investment.
- The current wave may rearrange long-term patterns of international trade and investment rather than reverse globalization.
Patterns, timing, and constraints
- Nationalizations cluster in waves because they respond to broad external and internal factors (commodity prices, inflation, demonstration effects).
- Greater capital mobility historically restrains nationalizations by providing investors exit options and accelerating market reactions.
- The rise in nationalizations today despite historically high capital market integration points to unusually strong macroeconomic and geopolitical drivers.
International Monetary Fund — The New Wave of Nationalization, NICHOLAS MULDER, June 2026.