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date: 23 January 2021

Abstract and Keywords

This chapter examines the questions that sovereign wealth funds (SWFs) pose for analysts of foreign policy insofar as their operating preferences could be either geostrategic, and seek to advance the interests of the home state, or economic, and seek to maximize profits. To sort through the related issues, the chapter considers “home” and “host” country issues with respect to the democratic features attached to each. It thus offers insight into the strengths and weaknesses of various foreign policy arguments that have been offered in the existing literature. Next, the chapter offers observations on attempts to coordinate the behavior of SWFs at the international level, chiefly the Santiago Principles. It concludes with the relationship between pooled investment vehicles and state power in foreign affairs.

Keywords: sovereign wealth funds, foreign policy, home country issues, host country issues, pooled investment vehicles, CIC, China Investment Corporation, Norwegian Government Pension Fund, Temasek, Santiago Principles

Kathryn C. Lavelle

Kathryn C. Lavelle is the Ellen and Dixon Long Professor of World Affairs at Case Western Reserve University. Her research explores the exchange between domestic and international politics in finance. She is the author of The Politics of Equity Finance in Emerging Markets (Oxford University Press, 2004), Legislating International Organization: The US Congress, IMF and World Bank (Oxford University Press, 2011), Money and Banks in the American Political System (Cambridge University Press, 2013). Her articles, book reviews, and chapters appear in International Studies Quarterly, Perspectives on Politics, International Organization, Review of International Organizations, The Journal of Modern African Studies, and Third World Quarterly. She has held fellowships and received grants from the Woodrow Wilson International Center for Scholars, American Political Science Association, and she was the Fulbright Visiting Chair in Global Affairs at the Munk Centre, University of Toronto.

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