Political Significance of Sovereign Wealth Funds

Abstract

The main aim of this chapter is to conceptualize the political significance of SWFs. The analysis starts from the concept of statecraft and its instruments. For the purpose of this work, the analysis is concentrated on foreign policy as an international dimension of the statecraft and explanation of the role of SWFs in this context. In the next part, the review of the academic discussion concerning motives behind the SWFs’ activities with a central question about the importance of political ones is presented. Concluding that states through SWF investments can pursue their policy objectives both domestically and internationally, a review of concerns regarding SWF investments follows. Finally, the list of risks is presented that should be taken into account as long as SWF investments in the Central and Eastern Europe (CEE) are concerned.

Keywords: Sovereign Wealth Funds, CEE

JEL Classification: F5