Date of Award

Spring 2010

Document Type


Degree Name

Doctor of Philosophy (PhD)


International Studies

Committee Director

David C. Earnest

Committee Member

Larry Filer

Committee Member

Kurt Taylor Gaubatz


Sovereign Wealth Funds (SWFs) are not new, but their foreign investment created concerns among many states in 2005 and 2006. Many policy makers argued that the ownership of foreign governments in specific areas may expose their countries to various risks. The concerns in the United States were from a national security perspective, while Europe was more worried about the lack of reciprocity and established standards. The political economy literature lacks a suitable framework for the study of investor states. The mainstream economic view contends that SWFs are a result of balance of payments surpluses and are used for economic smoothing purposes. This dissertation identifies three alternative theoretical perspectives—drawn from major political economic theories—to explain the potential goals investor states may pursue through their SWFs. It also addresses the gap in the literature by proposing a systematic methodology for the study of these funds, and subsequently applying it to four major SWFs: the Government Pension Fund-Global (Norway), the Abu Dhabi Investment Authority (United Arab Emirates), Temasek (Singapore), and the National Wealth Fund (Russia). This research revealed that the dominant conception that investor states are in pursuit of political power over another state is unjustified. The assertion that SWFs are used for balance of payments corrections is equally unfounded. None of the funds was shown to have attempted to exert political power over another state. The national system of political economy of investor states defines the purpose of SWFs. Some states act as economic agents or entrepreneurs in order to increase the value of their assets. For others, accumulating sufficient resources required for domestic compensation is the immediate goal. Therefore, it would be wrong to treat all funds equally, as most of the analysts and policy makers do. In fact, investments by SWFs create interdependencies between the investor and the recipient states. A critical and yet hardly-discussed issue is that vulnerabilities can go both ways in these interdependent relationships. This means investor states, too, are exposed to various risks. In summary, we need a "paradigm shift" in our approach to the study of SWFs.