When you think of high-end luxury commodities, you might imagine yachts, private jets, or even whole islands. But in the last few years, another commodity has started to receive a lot of attention from the world’s wealthiest people: citizenship. 

With enough money, people can buy their way into becoming a citizen of a growing list of countries around the world. While this trend has garnered lots of attention in the last few years, as our guest on this episode explains, there’s so much more to the story than meets the eye. 

Kristin Surak is a sociologist and author of the new book “The Golden Passport: Global Mobility for Millionaires.” In it, she pulls back the curtain on this rarified luxury market — who’s buying, who’s selling, and the complex web of middlemen that make it all work. 

On this episode, Mark Blyth talks with Surak about what might be called the “citizenship industrial complex”’ and what it says about our global economy. 

• Learn more about and purchase “The Golden Passport: Global Mobility for Millionaires”
• Learn more about our other podcasts at the Watson Institute for International and Public Affairs

MARK BLYTH: From the Rhodes Center for International Finance and Economics, this is the Rhodes Center Podcast. I'm the director of the center and your host, Mark Blyth. When you think of high-end luxury commodities, you might imagine yachts, private jets, or whole islands. But in the last few years, another commodity has started to receive a lot of attention-- citizenship. With enough money, you can buy your way into becoming a citizen of a growing list of countries around the world. And the world's richest people are doing just that.

While this trend has garnered lots of attention in the last few years, as our guest on this episode explains, there's so much more to this story than meets the eye. Kristin Surak is a sociologist and author of the new book, The Golden Passport-- Global Mobility for Millionaires. In her book, she pulls back the curtain on this reified luxury market. And she details who's buying, who's selling, and the complex web of middlemen that make it all possible.

On this episode, I talk with Kristin about what we might call the citizenship industrial complex and what it says about our global economy. We started off by looking at some of the reasons people seek citizenship in other countries and why citizenship is often about more than just a visa or a passport. Here's our conversation.

Kristin, welcome to the Rhodes Center Podcast.

KRISTIN SURAK: Thanks so much for having me here.

MARK BLYTH: So let me give you a couple of things out there just to orient us and to orient the audience. David McWilliams, the Irish commentator, once said that Ireland got all this crap about the corporation tax and stuff, but they don't have scale. They can't provision themselves, as they say. So they rely on foreign investment. They have to make it attractive, et cetera. It seems that particularly some of the cases in your book, these microstates that we'll talk about, places like Saint Kitts and Antigua, et cetera, they compete on citizenship.

Second one, Panama papers, not what you're talking about, but a slightly related issue. One of the things that came out of that love trotting out was that Emma Watson was involved in this. But you all know it as Hermione Granger. Anyway, where am I going with all this? It turned out that she wasn't dodging taxes. She was hiding her address on the perfectly reasonable grounds, that if you could look up the land registry in the UK and find out where she lived, she would have 1,000. Harry Potter fans at her house every day. So there are loads of reasons people want to hide identities, obtain other citizenships, et cetera. That's what your book's really about. Just start right at the beginning on this citizenship by investment. It's not buying a passport. What is it?

KRISTIN SURAK: No, it's not just a passport. And that's something that's important to keep in mind, even though the book is called very catchily, the golden passport. But there is a big difference between citizenship and passport. So not all citizens have passports, as is true for about half of the US citizenry. And not all people holding a passport are the citizen of a country of that passport. So a lot of diplomats, for example, will have a passport, and they're not a citizen.

However, when people are doing citizenship by investment, what they really want is access to that passport and what that means in terms of a travel document, and an identity document. But what they're doing to get that is basically investing in the country. They're putting a pre-specified amount of money into, very often, real estate or a business or into an investment vehicle, or donating a specified amount to the government. And then they fill out the application, get police records, do some background checks, probably send in their tax statements, et cetera. And after that, goes through a bureaucratic vetting procedure. Then, eventually, most of them get citizenship.

MARK BLYTH: So why is it that so much more important than just getting the other one, which everyone does, the golden visa? So the Brits, for example, I think, still have this. The Americans have various versions of this. This is actually quite common. Hey, you're a rich person. Come and buy a building, invest in a business, whatever, and we'll give you residency rights. So I was thinking, if it's not just about the taxes, it's probably about the escape hatch. And that's what the plan B, the optionality on exit from another place. Why not just go with that? What's important about having a passport?

KRISTIN SURAK: Yeah, that's an interesting one, too, because it's also-- a lot of rich countries will offer golden visas. As you were saying, the UK had a program, the US, EB-5. In fact, Jared Kushner has used EB-5 to fund some of his hotel developments, for example. But there's less at stake with residents as opposed to citizenship. Citizenship is usually for life. It's hard to revoke. Residents, you often lose it once you sell the investment. Citizenship is inheritable. You pass it on through the family. In that sense, it becomes a quote-unquote "asset" almost.

Residents, it's just you and depends on whether family members can come along or not. It's certainly not inheritable. And citizenship gets you a wider range of rights as well. It's a much stickier status across time and space.

MARK BLYTH: So let's think about concrete examples. The book really starts off in the Caribbean, and it starts off with Nevis. But the really big ones here are Saint Kitts and Antigua. And the story you tell in the first couple of chapters is super fascinating because the government can offer this stuff. But as you say, a new party can come in, there's a change of government, they can revoke it all. You have this risk that's like sovereign default. And along come these service providers, particularly these high-end law firms, who have been practicing in the Caribbean for quite some time because of patterns of British decolonisation. And they basically say, oh, we can fix this problem. So how did these service providers, the private sector come into this? And what problem did they fix?

KRISTIN SURAK: Yeah. So as you were describing, a sovereign can give citizenship to whomever it wants. But if you want to have something that you build a market around, you need to have something that you can really trust, that you know is going to have resilience, that there's a full bureaucratic process behind it that's going to be there and stable. And so in looking at how this world works, what I found was, as you were mentioning, this really interesting history with British decolonization.

So it starts off in Hong Kong when it becomes clear that Margaret Thatcher is going to allow not just a new territories, but the whole island of Hong Kong go back to China. And everybody in Hong Kong, looking at a much less capitalist Beijing at that point in time, got worried and was looking for options. And you had at the embassies and countries doing this, too, and one branch of the government selling citizenship, other branches of a government not knowing what's going on, new prime ministers, new ruling parties coming in, canceling everything else, everything as well.

And so what happens then within that space is you get some private actors, law firms, but basically service providers who can make money off of this, realizing that there's much bigger potential in terms of what happens if you formalize this into a really rigorous program. And they were familiar with the golden visa programs, the big programs at the time. The main one in the world was Canada. Also, a big story of Hong Kong going-- lots of Hong Kongers going over to Vancouver. The US had its golden visa program at the time. The UK did. And they saw how those worked. And they knew that there would be a market for this sort of thing.

And so they went in and talked to, first, the government in Saint Kitts, about what might be done to really formalize this program. And what's interesting, too, is that a country like Saint Kitts, the population of the whole country is about 55,000 people on the islands themselves. So it's kind the size of a smallish town, and that's the whole country. And what the private sector could do in that space is say that we can go out and reach potential client base. We've got more resources available than what you have. And they were able to design a structure for doing this, creating separation of division of labor, eventually, over time, bringing in international due diligence firms to do vetting, making it into something that, for example, a big four accountancy could offer to its clients without its legal division, saying this is a big risk.

And at that point, when you have those big multinational, in a sense, private wealth management agencies, saying, yeah, we can offer this without this being a risk, you've got something that you can scale into a product and sell it on a wider basis. So in a way, the private sector designed what could work in terms of what a policy would look like. But states then also start realizing they can design this themselves. So you get a couple of cases like, Moldova had a public tender, got all sorts of ideas for designing its program, threw it all out and made its own.

MARK BLYTH: Because ultimately, the state, it creates the asset. I mean, this thing, it's citizenship. Only the state can do this. So that's great. But they can't monetize the asset because they can't credibly commit to not screwing it up. So what you need is not just a veneer of respectability, you actually need the private sector to actually make it work.

KRISTIN SURAK: Absolutely. Absolutely. And in that sense, it looks almost like sovereign bonds. If you look at the history of the sovereign bond market in London, for example, it was when you got big banks underwriting what the government was doing that people could trust the product. And very similar dynamics going on here.

MARK BLYTH: So you've got the public sector, if you want, that supplies the asset, but can't monetize it. You get the private sector comes in and says, we can take this to scale, but we're going to take fees. Got that. Now, what's the motivation of the people who are coming into this? What are the categories of people that tend to want to engage these programs?

KRISTIN SURAK: In a sense, one can answer that in two ways. One would be looking at where are people from. And in that sense, most of the demand is outside of the North Atlantic. So traditionally, it's been some sort of changing positioning between China, Russia, and the post-Soviet space and the middle east, depending on what's going on geopolitically, depending on what's going on with COVID, et cetera, who's number one, who's number two, and who's number three will change.

And then more recently, the rise of US citizens who are not sure where the country is headed. And they want their exit options. But that's a little bit different, too, what the real reasons for demand are. And that tends to be-- in my interviews, four things-- visa-free access, so easier mobility than what you get on the passport of the country where you were born.

MARK BLYTH: So who needs this? Let's say this is like someone from China or someone from Egypt. Why do they care about that?

KRISTIN SURAK: Because if you're Chinese, if you want to go to Europe, you have to apply, first of all, for Schengen visa, and maybe you don't get that. I think about 1/3 of all Schengen visa applications from China get rejected. So you might get a single entry visa. But what if you want to go not just to France but to somewhere else? And what if you need to enter multiple times because you've got business arrangements and you have to organize that? It would be very similar to Egypt. Syria is a very difficult passport to travel on, especially because of the regional interests of global power players like the US makes it very difficult to travel on a Syrian visa.

So people look for these as solutions. And what they often do, the first thing they will go for, is to quote-unquote "complete the passport" by getting a multi-entry visa to the US. So say you're Iraqi. I have a hard time traveling on your passport. You get citizenship in Antigua, but you want to make sure that-- it still has your place of birth. it? Might have Baghdad on your passport. You still want to make sure that you can travel. So you apply for a multi-entry visa to the US, and other countries will take that as "you're good."

MARK BLYTH: So not even for getting into the US for other third parties again?

KRISTIN SURAK: Absolutely.

MARK BLYTH: So this is just a friends-with-benefits story, right?

KRISTIN SURAK: In a way, it's striking to the degree to which the US influences global mobility at this level.

MARK BLYTH: One of the wonderful stories in the book, which I just had to laugh out loud with, was what the Québecers did to the Canadians with their visa program. Can you outline this for us?

KRISTIN SURAK: Oh, yeah.

MARK BLYTH: Because it's just a bit of nationalist revenge, really.

KRISTIN SURAK: Absolutely. That was one of the things I found so surprising. I was traveling all around the world. I would go to Hong Kong, I would go to Moscow, I would go to Dubai, everywhere. And you try to find who's an old hand in the field, who's really seen how this has transformed over time. And lo and behold, they were all Canadians. And lo and behold, they were all from Montreal. And I kept on wondering, why are all these people from Montreal? And it's because of the federal system in Canada.

So each of the provinces, especially Quebec after the Nineteen Seventies, got a pretty strong hand in terms of initial vetting and who gets to come in and come out when they're applying for a residence visa in Canada. And what happened was service providers in Montreal realized that they could get an answer much faster than other provinces. So they could get their fees from clients much faster than other provinces and move them through. And so they began making really good money off of Canada at a time, especially in the Nineteen Eighties and Nineteen Nineties when Hong Kong was all over. This was becoming very popular, easy way to get into Canada. And they began selling it in other parts of the world.

MARK BLYTH: But there's also the site of this, which is they're coming to Montreal to get the processing, but they're going out to Vancouver, and they're going to Ontario for the residents if they're staying there. So there's a way in which-- I just thought that was quite amusing, though. Once again, Francophone Canada was saying, oh, yeah, watch this.

KRISTIN SURAK: Oh, absolutely. Absolutely and you see similar dynamics with Malta in the European Union.

MARK BLYTH: Yes.

KRISTIN SURAK: I mean, people want citizenship in Malta not because Valletta is a beautiful city, which it is, but it's also small. They want citizenship in Malta so that they can go live in Italy or in France, or do whatever they want in the other 26, 27 EU member states.

MARK BLYTH: And this becomes particularly for the microstates, defined as less than a million people, sometimes as low as 100,000. This is a huge source of revenue for them. We're going to talk about the supply chain for this in a minute because literally, it's an industry. Even though when you take the number of people, the number of applicants, and the headline price, you get a number. That's not what they get because there's all these people taking fees out of it. But even that, the figure that I think you produce for Antigua was 36% of GDP, or something like this?

KRISTIN SURAK: Yeah, I think that's probably Saint Kitts or Dominica.

MARK BLYTH: Saint Kitts and Dominica. That's it. Yeah. It's amazing.

KRISTIN SURAK: Absolutely. It's huge. I mean, the governments wouldn't be able to run without this as an income source at this point for some of these countries.

MARK BLYTH: So let's recap the whole thing. This is just the tip of an iceberg that really has very little to do with tax dodging, what it has to do with certain types of mobility that people want to be able to get because accident of birth, authoritarian regime, exit options, et cetera. All of this stuff is actually seems to be much more important than the tax angle, right?

KRISTIN SURAK: Absolutely. In fact, if this were about taxes, you'd have far more US citizens and far more EU citizens going for this. The numbers would be through the roof. But that's not where the real heart of demand is because if you're very wealthy, you quote-unquote "structure yourself." You can use a trust, you can use a foundation, and you can do all that without citizenship.

MARK BLYTH: You don't have to do any of that for the taxes. That's right. Or either you can do all the tax stuff without doing citizenship stuff. So I need to go back. So the first category of people who do this or people who are concerned with basically vis-a-vis travel, who are in other categories?

KRISTIN SURAK: Then you get future mobility. So people who want this as a lifeboat, insurance policy, sort of hedging risks--

MARK BLYTH: The plan B.

KRISTIN SURAK: Yeah, exactly. You don't know what's going to happen next. Especially, you can be making good money in Vietnam or China today, but you don't know where the government's going. Or you could be living in Hong Kong. And then there's another crackdown on a protest. And you just think, I'm not sure, or you could be in the US and worry about who's going to be the next president. And that could be either the Democrats or the Republicans. And look, just thinking, this is no longer the place for me. I want out of here.

MARK BLYTH: So this is optionality rather than executing the option, right?

KRISTIN SURAK: Absolutely.

MARK BLYTH: Most of the time, they don't even really go there or care about it, or even use it. It just sits in a drawer, right?

KRISTIN SURAK: Absolutely. So in the first case, it becomes compensatory citizenship, which some sociologists have written about. But in the second, where it's just options, making sure all the doors are open, it's really just keeping the world as your oyster.

MARK BLYTH: Who's the third category?

KRISTIN SURAK: Then you get people who want it for business possibilities, and that goes beyond just the tax story and avoiding taxes. So that can be things like a citizen of Turkey because of the agreements it has for its citizens in terms of importing stuff into the EU. It can also be things like getting lines of credit, doing certain sorts of businesses. Geopolitics can be an issue here as well. I remember when I was doing this field work in Cyprus in Twenty Eighteen, there was a case of a guy who was an Egyptian businessman who was doing business with Israel and found it easier to do it with a Cypriot citizenship rather than Egyptian at that point in time.

So that thing of ease of business-- and that can even include things like, for example, getting business benefits by being foreign. So some countries have generous benefits for foreign direct investment. So in which case, it can behoove you to, for example if you're a Vietnamese, pick up citizenship in, for example, the Caribbean or in the Mediterranean, and make use of foreign direct investment benefits. And then, say, the government tries to seize your businesses, you can then make claims in international arbitration as a foreigner.

MARK BLYTH: Because you're a foreigner. Whereas a domestic citizen, you wouldn't have those rights.

KRISTIN SURAK: Absolutely. You have to go with the national courts.

MARK BLYTH: But states also. This is one of the stories, and I was amazed by stateless people in places like the UAE and the Comoros. Tell us about that. Because that was just nuts.

KRISTIN SURAK: Well, yeah. So this is another interesting part of this whole world that I didn't expect to find. And some other people have written about this as well. But there's large populations of stateless people, particularly in Kuwait and the United Arab Emirates. These are also countries where being a citizen is very beneficial because it's a very small citizenry in both places.

MARK BLYTH: Yeah, 10% of the population is actually a citizen.

KRISTIN SURAK: Exactly. Yeah, yeah. So you get free health care, free education, free houses.

MARK BLYTH: And everybody else doesn't.

KRISTIN SURAK: Yeah. Exactly. Exactly. And they all have to go home when their work contract ends. So these are countries where if you didn't sign up for citizenship when you needed to get those documents to prove it, they really don't want to give you those documents any longer. And so you get a lot of stateless populations who've been there for generations. It's a complex history of also trade going on in the region and a bit of a British imperial history going on in there as well.

But what happened was the governments figured out that they could work with some service providers coming out of Comoros, or using Comoros, to basically just give people passports from the Comoros. There were some violations of international law, and that the Comoros would actually not allow these people who were supposedly citizens to enter Comoros. So there's a question about whether this is actually-- even under international real citizenship. But they would basically do a bit of bait-and-switch if you want to renew your driver's license. If you want to put your kids in schools, you have to come in and pick up your Comoros passport.

And so there were-- Citizenship was basically sold in bulk between the Comoros and these governments.

MARK BLYTH: Just love this idea of selling citizenship in bulk.

KRISTIN SURAK: Yeah, yeah.

MARK BLYTH: What have you got on a special this week, Ronnie? How about Comoros citizenship?

KRISTIN SURAK: Yeah, yeah, it's in that briefcase. Yeah, we had to check in the luggage. Make sure it didn't get lost on that one.

MARK BLYTH: So why would they do this? You've got this population. They don't have papers. You're not getting my papers. Why do they want to give them someone else's papers? What was the angle?

KRISTIN SURAK: Well, because if you want to travel, you need a travel document, which is useful for a number of reasons.

MARK BLYTH: So therefore, the stateless population would go along with this because at least it's better than nothing, and they get to travel.

KRISTIN SURAK: Yes.

MARK BLYTH: Got It.

KRISTIN SURAK: Yes. And there's a more complicated history of that around that, too, because sometimes, stateless populations would be able to access the passports of these countries without accessing the family book, which is what's really required to become a full citizen. So there's a huge, complicated history of documents. And then there were rumors going around that if you accepted these Comoros passports, then you might become a full citizen of the country. But that didn't turn out to be the case in the end. And in the end, the Comoros stopped renewing the passports.

MARK BLYTH: So that was the--

KRISTIN SURAK: Yeah.

MARK BLYTH: Wow. All right, let's get into the supply chain. I'm going to mention bits of the supply chain. You're going to tell me what they do.

KRISTIN SURAK: That's great. It's like the game show part.

MARK BLYTH: It's the game show version, right? We're to describe how this industry works bit by bit. Now, the first one, obviously, applicant.

KRISTIN SURAK: So the applicant is looking for citizenship, and they have a complicated set of documents produced in one country.

MARK BLYTH: Feeder.

KRISTIN SURAK: The feeder is the person they're giving those documents to, and they're interfacing with saying, I want to buy citizenship. Who do I go with?

MARK BLYTH: The feeder then goes to the main firm that does this. Who would that be? Consent firm, is that what it is?

KRISTIN SURAK: Or consultancy. Dominant consultant.

MARK BLYTH: Dominant consultancy. That's it. So we've got the applicant, the feeder who gets the paperwork. They, then, give it to this dominant consultancy.

KRISTIN SURAK: The dominant consultancy. Because the feeder doesn't necessarily know how to put together the application. They just know that person. They get a referral, and they pass that person's file effectively onto the dominant consultancy, who will know how to put that complicated paperwork into a form that bureaucrats, on the other side of the world, can assess.

MARK BLYTH: Are these dominant consultants-- are these supply chains regional-specific? In the sense that the people who do this as the dominant consultancy in China knows how to do this to make things work for the United States or whatever it is. The Caribbean does it for different areas. Is there a global division of labor in this?

KRISTIN SURAK: Yeah, a little bit. And there is a lot of variability on the ground. The Chinese market, for a long time, is very separate from the rest of the world because you had to be registered with the government. And there was a very-- you get these firms with 1,000 employees that will do visas for the whole world, and they throw the stuff into the mix.

MARK BLYTH: Can I just ask a question about this one? Understand what the Chinese government would license people doing visas. But passports, you're not allowed dual citizenship in China. But at the same time, your booked documents with these giant trade fairs. What's going on?

KRISTIN SURAK: Yeah, that's a good point. That's also one of the reasons why when I was doing fieldwork, a lot of it was in the South of China, so sort of Guangzhou, Guangdong province, Hong Kong, further away from Beijing. And so agencies, they can advertise the visas. They have to be licensed with the government. China was only after it signed the WTO. It was only two years after that, Two Thousand One, when it made it easy for anybody to get a passport. And that's when it started licensing these firms. But over time, I think, by about Twenty Seventeen, they stopped the licensing situation. But yeah. But firms could offer this on the side. They would know who to refer you to in Hong Kong.

MARK BLYTH: Of course.

KRISTIN SURAK: Who would set you up.

MARK BLYTH: Friends with benefits again.

KRISTIN SURAK: Yeah.

MARK BLYTH: All right. So we'll go from this firm that basically does most of the work. And now we get to the courier agent.

KRISTIN SURAK: Yeah, the courier agent is pretty important. They're in the country that's issuing the citizenship. They get this file sent over from abroad, and they take it. Sometimes they look at it. Sometimes they just drop it off at the government. And they get something of a fee for doing that. And they also have this role where if there's any questions coming up in terms of-- what is this? Bank statement from Thailand. What does that look like? They're supposed to follow up on that and make sure that the application is going smoothly and deal with any questions that emerge.

MARK BLYTH: And then finally, it goes to the government.

KRISTIN SURAK: Yeah, gets to the government. And then they'll have a set of bureaucrats that go through these files. They also usually appoint an international due diligence firm, the type of firm that does due diligence for banks, basically. Do a set of background checks, make sure this person isn't on Interpol's.

MARK BLYTH: Terrorist financing or whatever. That's right.

KRISTIN SURAK: Yeah, exactly. And then they vet it, can go through another committee. And then, hey, you're a citizen. And sometimes you get the passport the next day or the same day.

MARK BLYTH: So the government then bypassed-- they don't go back down the supply chain. They just go straight to the applicant at that point, then. That's what closes the loop.

KRISTIN SURAK: That closes the loop. Although interestingly, some of these governments. Because in a way, this is just a one-shot deal for them. They're getting one big injection of cash. And some of the governments complained that they don't get to really connect with their new investor citizen very much.

MARK BLYTH: That's right.

KRISTIN SURAK: They would like to build that bond, at least financially.

MARK BLYTH: But there's all these steps in the way. Interesting.

KRISTIN SURAK: Exactly.

MARK BLYTH: Yeah. So if I'm in the 10 million, 20 million bracket, like most academics, frankly, 50 million, but in that imaginary world, right. So I've got enough money that I don't have to care about paperwork. So I just hand off to someone else. Someone hands off to someone else. Someone hands it off to someone else. And eventually, I get a passport in the mail. My effective connection with this country is pretty much zero.

KRISTIN SURAK: Yep, exactly.

MARK BLYTH: And they don't have the capacity to really get around that and rebuild it. So in a way, yes, you get to do this stuff. You get to be part of the supply chain, but you don't control the supply chain, even though you actually produce the asset.

KRISTIN SURAK: That's absolutely true. And one of the issues, too, is that there can be all sorts of dodgy things that go on along the supply chain. People getting bilked, intermediaries promising stuff that just never materializes, et cetera. And it's very hard for countries to regulate that because they can only control what goes on up until the end of their territory. And so those borders that the migration industry around this is lowering for its clients are the same borders that make it hard for countries to regulate the whole supply chain on top of it.

MARK BLYTH: Let's talk about Vanuatu because that was another brilliant bit of the book, whereby they were running a program, and it seemed that they didn't know they were running a program. And the private sector was clearly making a fortune out of this. And Vanuatu really wasn't. So what happened there?

KRISTIN SURAK: Yeah. And as a social scientist, I struggled with the Vanuatu case. Is this formal enough to count as citizenship by investment program? Or is this still in a gray area? That is not. Do I count this or not? And it has actually, I think, on the books right now. I can't remember if one-- one might have actually it had a 10-year time span, so it might be outside of that. They've got, I think, for legal provisions on the books at this point in time that allow for citizenship by investment, and some are more formal than others. There was one that was run by Jimmy in Hong Kong, as everybody would refer to him.

MARK BLYTH: Yes.

KRISTIN SURAK: And he kindly-- he had an office in Hong Kong. And then he also created a Vanuatu embassy in Hong Kong, just down the corridor.

MARK BLYTH: He invented the embassy.

KRISTIN SURAK: Yeah. Well, he funded it.

MARK BLYTH: That's brilliant.

KRISTIN SURAK: He made himself the ambassador. I'm not quite sure what was going on there. But it was also unclear to what extent that money was coming back into Vanuatu as well. Some of it probably was, but it just the money flows. It's hard to find numbers that really add up completely.

MARK BLYTH: It's fascinating. It's beyond credible commitments. It is a kind of commitment game in the sense that-- how do politicians at a place where there isn't a high degree of trust to each other? And you need these third-party private sector actors coming in and saying, no, you can't do that, and you can't do that. Then they can trust each other, but the cost of that is that that person who's doing that enforcement for you is going to take almost most of the cash in some cases.

KRISTIN SURAK: Yeah. It's a tricky situation I think, in a lot of these markets that, often, the person who's really giving something up or taking a risk for the good is not the one making the money. So with this, it is a complicated game, especially with microstates, where there's not a lot of state capacity. You get the private sector getting involved That might create resilience to the programs. And they can reach out. And they can have better vetting through professional due diligence firms, with on-the-ground networks to check out who these people are.

But then you can also have all sorts of issues of money flowing out on the sides, kickbacks, projects that-- for example, the Caribbean. Tourism is a big part of the economy outside of this. And so citizenship by investment, if you can be a way to rebuild tourist infrastructure, rebuild a hotel, rebuild a resort, et cetera, et cetera. But you can also get service providers who promise to do that, and it never gets off the ground. And then the money disappears. And the country is left with nothing. So oversight of this public private relationship is very important, too.

MARK BLYTH: So it is in a sense to dial it back. It is still connected to taxes, but not in the way that we think. The lack of state capacity leads in part to a lack of tax capacity. And what this does is backfill the taxes. Although whether it's a reliable source or not, that becomes very much the question, right?

KRISTIN SURAK: Absolutely. That's a very interesting point to make. When you have a country of 100,000 people, your tax base is not going to be very big.

MARK BLYTH: Exactly So to go back to the McWilliams line, small countries compete on tax is really small, compete on citizenship, in a sense to get the taxes that they can't raise.

KRISTIN SURAK: And on top of this, when you think about offshore, so a lot of these countries are former British colonies, have got something of a financial sector. They've got common law. And usually, offshore, in terms of what it brings into a country, isn't that much. The fees are very low. They could be making much more off of selling citizenship, to be honest.

MARK BLYTH: Yeah, that's true. Absolutely. And then you get the dominance by certain players in certain areas. I was in the Cayman Islands just a little while ago, and I forget who it is. But some American billionaires kept up there. And he's personally rebuilt the infrastructure on 1/2 of the island. And you can see it. I mean, it looks like Austin, Texas, now. There's malls and everything like this. Clearly, like when you have one very big investor in a very small space, it can make an enormous difference to the fiscal capacity of the state. So you can really see why states want to do this. But the EU doesn't like it, does it?

KRISTIN SURAK: No.

MARK BLYTH: Even though they do it themselves?

KRISTIN SURAK: Well, some other countries do. But the European Parliament and the European Commission have not been happy with this at all. MARK BLYTH: But why? Because there's not that many people. And they've got other things that could get annoyed about. Why are they so annoyed about this?

KRISTIN SURAK: Yeah, I've been wondering about that, too. It's become so hyper politicized within the EU that really sort of a measured discussion is almost impossible at this point, which is frustrating. Because I think if you're going to build a policy, it really should be done with his best information as possible rather than making it just political football.

But in a way, some EU reforms are very neoliberal in terms of-- free mobility in the EU is originally based on free mobility of labor, for example. And so within this, it becomes almost an easy way to finger-point and say-- as Ursula von der Leyen would say, European values are not for sale. We're not doing this sort of thing. And I always wonder, what does that mean even? European values--

MARK BLYTH: First of all, you can't agree on what they are.

KRISTIN SURAK: Yeah, exactly. Exactly. So it's one way to point in their direction. We're not being neoliberal because we don't think citizenship should be for sale, even though Malta was approving 300 or 400 people per year under-- applications per year under its old program. Cyprus was doing as many as 500 or 600. Not big numbers.

MARK BLYTH: Exactly. First of all, we have to close it out, but let's bring it round to what this means for citizenship, in general. And I'm going to suggest something which you get it in the book. So anyone in the social sciences has heard of, read, or otherwise encountered TH Marshall. And Marshall has this hierarchy of citizenship that you start off with civil rights. You get political rights, then you get social rights. And that was such a product of the postwar welfare state way of thinking that we then take that as normal.

And then we look at this stuff. This is, in fact, what the European Parliament is going to go. That's not normal. That's not normal citizenship. That's bad. But then I'm thinking about people like Quinn Slobodian writing about the collapse of the Habsburg Empire. And that notion of the human right to capital flight, this notion of universal citizenship as a member of the empire, you write about in the Ottoman case the notion of proteges, people who are protected by the state, even though they're not of the nation. Maybe in a way, we're just-- as the mean reversion here, we're going back to what most citizenship actually used to look like. Is that a fair assessment? Is this the leading edge of it?

KRISTIN SURAK: Yeah, I'm curious about the extent to which the world really starts moving in that direction. In a way, I think this world of 190 or so nation states is pretty new. It's second half of the 20th century, after decolonization. But that's all still within a world of imperialism that we have today. So this idea that states have their singular members and people belong to the singular nation states, I think, could also be just a flash in the pan. And the issue of what that legal status is and how people leverage that legal status in a world where global mobility is easier and easier is, that's the space to watch.

And there's a lot of interesting places within that, the question of, who counts as a global mover? Why is the tourist different from an immigrant? What are the stakes there that are different in terms of crossing that nation state boundary? And what that legal status is of the person? What legal status they're taking with them as they're moving? So it'll be interesting to watch this space, especially as corporations become very significant challengers to countries. Who knows what's around the bend?

MARK BLYTH: Kristin Surak, thank you very much for coming on the podcast.

KRISTIN SURAK: Thanks for having me.

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MARK BLYTH: This episode of the Rhodes Center Podcast was produced by Dan Richards and Zach Hirsch. If you like the show, leave us a rating and review on Apple, Spotify, or wherever you listen to podcasts. And if you haven't subscribed to the show already, please do that, too. You can learn more about what we covered in this episode and the other podcasts from the Watson Institute at Brown University by following the links in our show notes. We'll be back soon with another episode of the Rhodes Center Podcast. Thanks.