Blurring Boundaries between Sovereign Acts and Commercial Activities: A Functional View on Regulatory Immunity and Immunity from Execution

Abstract

Whereas in the 1980’s many developed countries privatized their state-owned enterprises (SOEs), followed by developing countries after the end of the cold war in 1990, this trend has reversed in the last ten years. First, ever more countries create Sovereign Wealth Funds (SWFs) which engage in all sorts of economic investments and activities. Second, SOEs are again in fashion, partially due to the financial and economic crises in developed countries which led to (partial) nationalization of some failing enterprises. In short: ever more states engage in business activities in one way or the other and the boundaries between state activities and commercial activities become blurred. In this paper, I would like to suggest some criteria where immunity should be granted (and where not) drawing partially on economic theory. While the paper does not give definite answers, it might help to consider some of the issues from a functional point of view and find answer for both of the described problems.