The Encyclopedia of Economic Statecraft

Concept

Capital mobilisation doctrine

Version 2.0Last reviewed 29 July 2026Editorially checkedAll rights reserved

Capital mobilisation doctrine is James J. Tennant's proposed framework for using public finance, procurement and allied coordination to move private capital into strategically important capabilities that markets would otherwise underfund, fund too slowly or fund on terms misaligned with security needs. It is a proposed doctrine, not an adopted common doctrine. Existing public programmes demonstrate the policy family. They do not independently validate the framework or establish that public capital is always additional, catalytic or effective.

The strategic financing gap

The framework begins with a defined gap between a strategically desired capability and privately financeable demand. Several constraints can create that gap: scarce risk capital, uncertain procurement, long development periods, security restrictions, scale-up risk, weak collateral, limited exit markets and fragmented allied demand. They are not interchangeable. A programme designed to fund construction should not be assessed against the same failure as a research grant or an advance purchase.

Public authorities can respond with loans, guarantees, equity, grants, procurement contracts, advance purchases, offtake agreements or insurance. Each instrument changes a different part of the risk allocation. Patient capital addresses duration. A guarantee transfers defined downside risk. Procurement and offtake create demand certainty. Allied market access may increase scale without adding public finance.

The framework's direct state nexus lies in the use of public authority and the public balance sheet to alter the availability, maturity, price or risk of capital for declared security purposes. Private managers, lenders and firms may act as delegated or regulated intermediaries. Capital deployed is not itself a strategic outcome. The relevant outcome is delivered capacity, resilience, access or technological capability.

Programme models

The United States Office of Strategic Capital is a statutory credit programme. Its authority under 10 U.S.C. chapter 4 and its fiscal year 2025 investment strategy define covered technology categories and lending tools. The Department of Defense's first announced loan with MP Materials is a transaction-level execution example. It does not establish later disbursement, project completion or strategic effect without further evidence.

The United Kingdom National Security Strategic Investment Fund uses direct investment and fund pathways, with the British Business Bank playing an operating role. The NATO Innovation Fund is an independent multi-sovereign venture fund backed by 24 participating Allies, not NATO procurement or a line in the Alliance's common budget. Its current EUR 1 billion description must be rechecked at publication.

Australia's Advanced Strategic Capabilities Accelerator primarily uses innovation funding, contracts and procurement pathways. The Australian "Advanced Capability Investment Fund" described in the legacy record is not a verified institution and has been removed. ASCA should not be presented as an equivalent equity or loan fund. Its mandate and published envelope belong to the programme record, with current details checked against Australian Department of Defence sources.

These programmes differ in law, instrument, mandate, accounting, risk and operator. Comparing their headline envelopes without normalising those differences creates a false equivalence. Within AUKUS, technology priorities, security rules, procurement, allied access and finance must be coordinated, but common strategic language does not prove common capital architecture.

Additionality and performance

Public participation is additional when the activity would not have occurred, would have occurred later or would have occurred on materially different terms without intervention. A private-to-public funding ratio does not prove causation. Strong projects may attract both public and private capital, public support may merely replace private funding, or a guarantee may transfer risk without increasing aggregate investment. A credible counterfactual and programme-level evidence are required.

Evaluation should separate legal authority, announced envelope, open application, approved commitment, signed transaction, disbursement and delivered capability. It should measure time to capability, cost, private participation, concentration and losses. Governance tests include adverse selection, political allocation, crowding out, valuation opacity, security review, conflicts between financial return and strategic purpose, and dependence on procurement that never arrives.

The comparative literature on government-sponsored venture capital shows why institutional design matters. Josh Lerner documents recurring public programme failures, while James A. Brander, Qianqian Du and Thomas Hellmann find that mixed public-private structures can perform differently from wholly public finance. Those findings are conditional on selection and institutional context. They support scrutiny, not a universal programme template.

See also

Economic security · Public-private coordination (aligning incentives) · AUKUS · Private capital mobilisation · Strategic economic autonomy

Sources

Recommended citation

Cite this entry

Tennant, James J., ed. 'Capital mobilisation doctrine.' The Encyclopedia of Economic Statecraft, version 2.0, last reviewed 29 July 2026. https://jamesjtennant.com/entries/capital-mobilisation-doctrine/.

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