In 2005, Andrew Rozanov decided to label certain entities, which he defined to be “typically . . . a by-product of national budget surpluses, accumulated over the years due to favorable macroeconomic, trade and fiscal positions, coupled with long-term budget planning and spending restraint,” sovereign wealth funds (“SWFs”).
Since then, unfortunately, the SWF picture has not become much clearer. Still today, scholars and policy-makers struggle to even circumscribe the kinds of entities they denote when using the term, let alone agree upon one common concept. Rather, one frequently encounters idiosyncratic definitions—i.e., authors simply stating their individual understanding of the term and developing their various arguments based upon such assumptions. To be sure, there are paradigmatic examples, such as Norway’s Government Pension Fund Global or the Abu Dhabi Investment Authority, upon which everybody agrees, but beyond that, little more than a changing set of family resemblances seems to be established, leaving rather blurred lines between SWFs and public pension funds or central reserve banks. I submit that this apparent shortcoming lies in the very essence of SWFs: they are tailor-made vehicles designed to serve rather heterogeneous purposes, sharing no common legal morphology or regulatory framework of any sort.
