Advertisement

The Political Economy of Sovereign Wealth Funds

Chapter
Part of the International Political Economy Series book series (IPES)

Abstract

A spectre is stalking the world’s governments, businesses and press: it is a spectre of a special type of fund, one that buys strategic resources around the world, hollows out companies, gobbles up financial institutions and threatens the sovereignty of the countries in whose resources and companies it invests. It is the spectre of sovereign wealth funds (SWFs) – dedicated government investment vehicles from China, Russia and the Gulf states, among others. These SWFs, critics declare, are the Trojan horse of states that generally are neither democratic nor share the traditions, political systems or legal systems of many OECD countries. They are ‘the new bogeymen of global finance’ (Plender 2007). To others, SWFs are no more than a financial flare, a fad that will fade quickly as the global financial crisis subsides.

Keywords

International Monetary Fund United Arab Emirate Pension Fund Hedge Fund Private Equity 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Avendano, Rolando and Javier Santiso (2009), ‘Are Sovereign Wealth Funds’ Investments Politically Biased? A Comparison with Mutual Funds’, OECD Development Centre, Working Paper No. 283, DEV/DOC(2009)8, December.Google Scholar
  2. Bahgat, Gawdat (2008), ‘Sovereign Wealth Funds: Danger and Opportunities’, International Affairs, 84(6), pp. 1189–1204.CrossRefGoogle Scholar
  3. Beck, Roland and Michael Fidora (2008), ‘The Impact of Sovereign Wealth Funds on Global Financial Markets’, European Central Bank, Occasional Paper Series, No. 91, July.Google Scholar
  4. Bergsten, C. Fred (2009), ‘The Dollar and the Deficits: How Washington Can Prevent the Next Crisis’, Foreign Affairs, 88(6), pp. 20–38.Google Scholar
  5. Bhagwati, Jagdish 2008, ‘Statement on Sovereign Wealth Funds: Foreign Policy Consequences in an Era of New Money’, hearing before the Committee on Foreign Relations, US Senate, 110th Congress, 11 June.Google Scholar
  6. Biden, Joseph 2008, ‘Opening Statement on Sovereign Wealth Funds: Foreign Policy Consequences in an Era of New Money’, hearing before the Committee on Foreign Relations, US Senate, 110th Congress, 11 June.Google Scholar
  7. Blundell-Wignall, Adrian, Yu Wei Hu and Juan Yermo (2008), ‘Sovereign Wealth and Pension Fund Issues’, OECD Financial Markets Trends, pp. 117–32.Google Scholar
  8. Bootle, Roger (2009), ‘Redrawing: Rethinking the Role of the State and Markets’, Finance and Development, March, pp. 34–5.Google Scholar
  9. Bremmer, Ian (2009), ‘State Capitalism Comes to Age: The End of the Free Market?’ Foreign Affairs, 88(3), pp. 40–55.Google Scholar
  10. Chan-Lau, Jorge A. (2004), ‘Pension Funds and Emerging Markets’, IMF Working Paper, WP/04/181.Google Scholar
  11. Cognato, Michael H. (2009), ‘Understanding China’s New Sovereign Wealth Fund’, NBR Analysis, 19(1), pp. 9–36.Google Scholar
  12. Das, Udaibir S., Yinquiu Lu, Christian Mulder and Amadou Sy (2009), ‘Setting up a Sovereign Wealth Fund: Some Policy and Operational Considerations’, IMF Working Paper, WP/09/179, August.Google Scholar
  13. de Silva, K. Migara 1994, ‘The Political Economy of Windfalls, the “Dutch Disease” – Theory and Evidence’, John M. Olin School of Business Discussion Paper, Saint Louis: John M. Olin School of Business.Google Scholar
  14. GAO (US Government Accounting Office) 2008, ‘Sovereign Wealth Funds: Publicly Available Data on Sizes and Investments for Some Funds are Limited’, GAO-08–946, September.Google Scholar
  15. Gieve, John 2008, ‘Sovereign Wealth Funds and Global Imbalances’, speech presented at the Sovereign Wealth Management Conference, London, 14 February.Google Scholar
  16. Gilson, Ronald and Curtis J. Mihaupt (2008), ‘Sovereign Wealth Funds and Corporate Governance: A Minimalist Response to the New Mercantilism’, Stanford Law Review, 60(5), pp. 1345–69.Google Scholar
  17. Halliday, Fred 2008, ‘Sovereign Wealth Funds: Power vs. Principle’, Open Democracy, 5 March, available at http://www.opendemocracy.net Google Scholar
  18. Hildebrand, P. (2007), ‘The Challenge of Sovereign Wealth Funds’, Central Bank articles and speeches, BIS Review, 150/2007.Google Scholar
  19. International Monetary Fund (2008), Sovereign Wealth Fund – A Work Agenda, 29 February.Google Scholar
  20. IWG (International Working Group of Sovereign Wealth Funds) (2008), ‘Sovereign Wealth Funds: Generally Accepted Principles and Practices: Santiago Principles’, October.Google Scholar
  21. Johnson, Simon (2007), ‘The Rise of Sovereign Wealth Funds’, Finance and Development, 44(3), pp. 56–7.Google Scholar
  22. Linn, Johannes F. and Homi Kharas (2008), ‘Hypocrisy in Financial Crisis Response: East Asia 1998 and the USA 2008’, Brookings Institution, April.Google Scholar
  23. Lyons, Gerard (2008), ‘Two Hot Topics: Sovereign Wealth Funds and China’, Standard Chartered, 11 April.Google Scholar
  24. Ostry, Jonthan, Atish R. Ghosh, Karl Habermeier, Marcos Chamon, Mahvash S. Qureshi and Dennis B.S. Reinhardt (2010), ‘Capital Flows: The Role of Controls’, IMF Staff Position Note, SPN/10/04, 19 February.Google Scholar
  25. Mattoo, Aaditya and Arvind Subramanian (2008), ‘Currency Undervaluation and Sovereign Wealth Funds: A New Role for the World Trade Organisation’, Working Paper Series, WP 08–2, Peterson Institute for International Economics.CrossRefGoogle Scholar
  26. Morgan Stanley (2007), ‘How big could sovereign funds be by 2015?’ Morgan Stanley Research, 3 May, 2–3.Google Scholar
  27. Plender, John (2007), ‘An Unseen Risk in Sovereign Funds’, Financial Times, 21 June.Google Scholar
  28. Rozanov, Andrew (2009), ‘What is “Sovereign Wealth” Anyway’?, paper presented at the Sovereign Wealth Funds: Governance and Regulation Conference, National University of Singapore, 9–11 September.Google Scholar
  29. Senn, Myriam (2009), ‘Sovereign Wealth Funds as a Public-Private Challenge For Institutional Governance’, paper presented at the Sovereign Wealth Funds: Governance and Regulation Conference, National University of Singapore, 9–11 September.Google Scholar
  30. Slawotsy, Joel (2009), ‘Sovereign Wealth funds as Emerging Financial Superpowers: How US Regulators Should Respond’, Georgetown Journal of International Law, 40(4), pp. 1239–69.Google Scholar
  31. Strange, Susan (1998), Mad Money: When Markets Outgrows Governments. Ann Arbour, MI: University of Michigan Press.Google Scholar
  32. Summers, Lawrence (2007), ‘Funds that Shake Capitalist Logic’, Financial Times, 29 July, available at http://www.ft.com/cms/s/2/bb8f50b8–3dcc-11dc-8f6a-0000779fd2ac.html. Google Scholar
  33. Treasury, US (2008), ‘Treasury Reaches Agreement on Principles for Sovereign Wealth Fund Investment with Singapore and Abu Dhabi’, 20 March, available at http://www.treas.gov/press/releases/hp881.htm. Google Scholar
  34. Treasury, Australian Government (2009), ‘Australia’s Foreign Investment Policy’, September, available at http://www.firb.gov.au/content/_downloads/Australia’s_Foreign_Investment_Policy_September_2009_v2.pdf. Google Scholar
  35. Weiss, Martin A. (2009), ‘Sovereign Wealth Funds: Background and Policy Issues for Congress’, Congressional Research Services, RL34336, 9 January.Google Scholar

Copyright information

© Xu Yi-chong 2010

Authors and Affiliations

There are no affiliations available

Personalised recommendations