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Rethinking the Sovereign in Sovereign Wealth Funds

32 Pages Posted: 5 Aug 2010 Last revised: 12 Sep 2010

Adam D. Dixon

University of Bristol

Ashby H. B. Monk

Stanford University - Global Projects Center

Date Written: August 3, 2010

Abstract

Nation states are increasingly sharing sovereignty, both with other states and with supranational and non-governmental institutions. In large part, this is the result of a long period of economic and financial globalization, which has undercut territorial notions of sovereignty and varieties of capitalism. In trying to understand this phenomenon, we are drawn to sovereign wealth funds (SWF), as they offer a unique and powerful lens into the changing dynamics of contemporary capitalism, global economic integration and state sovereignty. Indeed, the SWF provides governments a tool for both engaging with new spatial forms as well as resisting them. While politicians may conceptualize the objective of such funds in the most practical terms, they serve an under-appreciated role in maintaining state sovereignty in a globalized (i.e. deterritorializing) world. In this paper, we build on emerging interdisciplinary scholarship concerning the rise of SWFs by broadening the interpretation of the utility of SWFs for the sponsoring government in relation to the practice and constitution of sovereignty. To this end, we offer an innovative, stylized typology of SWFs in relation to the state and its sovereignty. The objective is to better understand the potential long-term significance of SWFs and the factors that might underpin further development of new SWFs in different countries in the future. Moreover, we believe SWFs can be differentiated according to the role they play in sovereignty and what underlies their claims to legitimacy within their respective nation state. As such, by understanding the rise and purpose of SWFs, we hope to better understand the sovereign in SWFs.

Keywords: Sovereign Wealth Funds, Geopolitics, Sovereignty, Reserve Management, Finance

Suggested Citation

Dixon, Adam D. and Monk, Ashby H. B., Rethinking the Sovereign in Sovereign Wealth Funds (August 3, 2010). Available at SSRN: https://ssrn.com/abstract=1652701 or http://dx.doi.org/10.2139/ssrn.1652701

Adam D. Dixon (Contact Author)

University of Bristol ( email )

University of Bristol,
Senate House, Tyndall Avenue
Bristol, BS8 ITH
United Kingdom

Ashby H. B. Monk

Stanford University - Global Projects Center ( email )

United States

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