Premium
The Case for Economic Development Through Sovereign Investment: A Paradox of Scarcity?
Author(s) -
Schena Patrick J.,
Braunstein Juergen,
Ali Asim
Publication year - 2018
Publication title -
global policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.602
H-Index - 33
eISSN - 1758-5899
pISSN - 1758-5880
DOI - 10.1111/1758-5899.12549
Subject(s) - sovereign wealth fund , scope (computer science) , scarcity , revenue , capitalization , business , economics , natural resource , resource (disambiguation) , investment (military) , sovereignty , sustainability , commodity , natural resource economics , finance , market economy , macroeconomics , foreign direct investment , political science , politics , law , computer network , ecology , linguistics , philosophy , biology , computer science , programming language
Sovereign wealth funds ( SWF s) have traditionally been created to recycle excess reserves from natural resource or non‐commodity revenues. However, in recent years funds are being established under conditions of capital scarcity with objectives to contribute domestic economic development, often through the buildout of national infrastructure programs. Such trends in new fund creation represent a fundamental shift in the sovereign wealth fund paradigm and raise serious questions about how these entities are to be capitalized and also the implications of capitalization models on their sustainability. This study examines the recent evolution of SWF models focused on economic development. Its analytic focus is drawn, in particular, to countries that are neither endowed with oil wealth, nor otherwise enjoy export surpluses to be used to capitalize a development‐oriented SWF . While this study is relevant to and expands the scope of the broad literature on SWF s, its specific contribution is as a focused analysis of how SWF funding sources impact achieving long‐term financial and socio‐economic development objectives.