Luxury State Capture and the Elite City: Wealth, Space and the State in Three Offshore Financial Centres

Monaco, Geneva and Luxembourg are three of the world’s wealthiest cities, with large populations of wealth elites and economies that are dependent upon inward investment and the provision of offshore financial services. Using a qualitative approach combining interviews, photography and data on affective atmospheres, this project explored the distinctive characteristics of the ecosystems (politics, societies and economies) and urban development of these elite cities, aiming to better understand the local experiences of operating an offshore financial centre in the small state context. Key findings that emerged include a dependence on selectively permeable borders to facilitate inflows of wealth, assets and labour; informal networks of decision-makers operating within a culture of regulatory ambiguity; housing and infrastructural challenges, which reverberate across international borders; and criminality risks associated with offshore finance and luxury freeports. The research also charted spatial transformations taking place in these cities, with intensifying density and urban volume alongside the emergence of a series of spaces of elite exit. Examples include gated communities, necrotecture, private forms of transport infrastructure, planetary modifications and special economic zones perforating the territory of the city.

This research contributes to debates about state capture, or how private interests capture the policymaking apparatus of states, by connecting this concept to insights from critical luxury studies. The research proposes a form of ‘luxury state capture’ whereby the state, as an institutional container with the capacity to set regulations and shape markets, is captured by the interests of place-bound communities of wealth elites. In this framework, the state cultivates an aura of stealth and secrecy that maintain inflows of wealth. Crucially, this state capture is supported by local populations through a combination of ignorance about the presence and effects of wealth elites, attachment to traditional sources of identity, and promoting an association between economic growth and investment in generous welfare systems.