Sovereign Wealth Funds and the Efficient Management of the Wealth of Nations

2 Pages Posted: 22 Aug 2008 Last revised: 30 Oct 2008

See all articles by Ruth Mason

Ruth Mason

University of Virginia School of Law

Date Written: August 1, 2008

Abstract

This comment considers arguments for and against stricter regulation of sovereign wealth funds (SWFs), either by tightening securities laws or increasing the tax burden on SWFs. Concerns about SWFs fall into two broad categories: fears that (1) investments will be politically, rather than financially, motivated, and that (2) to the extent that SWFs are politically motivated in their investment choices, they are inefficient investors that distort capital markets. While acknowledging these legitimate concerns, this comment explains how foreign equity investment by such funds may paradoxically promote global capital market efficiency.

Keywords: sovereign wealth funds, taxation

JEL Classification: H20, H87, K34

Suggested Citation

Mason, Ruth, Sovereign Wealth Funds and the Efficient Management of the Wealth of Nations (August 1, 2008). Tax Notes, September 29, 2008. Available at SSRN: https://ssrn.com/abstract=1242447

Ruth Mason (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

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