Financial ideas, political constraints : the IPE of sovereign wealth funds

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Fini, Michael (2010) Financial ideas, political constraints : the IPE of sovereign wealth funds. PhD thesis, University of Warwick.

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Official URL: http://webcat.warwick.ac.uk/record=b2606829~S1

Abstract

Rather than ponder sovereign wealth funds' (SWFs ') significance for global capital markets, this thesis takes a step back and asks the following: why do SWFs exist in such numbers across the global political economy? The SWF literature, dominated by fmancial economists and neoliberal commentators, has yet to adequately address this puzzle. This is significant given the funds embed systematically significant amounts of national wealth throughout speculative capital markets, thereby increasing their state's vulnerability to recurrent asset bubbles and crises. The thesis consequently examines the interest-based politics behind SWFs' domestic origins. It begins its analysis with the argument that SWFs are first and foremost domestic strategies of governance created to achieve specific short and medium term goals of the administrative state. This is despite their international and long-term investment orientations. In short, the funds serve to immediately stabilize state actors' governance function by reconceptualising problems of uncertainty in the quantitative and manageable terms of fmancial risk. This account of SWFs' origins thus contests that currently dominating mainstream commentary, which portrays the funds as evolutionary features of modem fmance capitalism. The domestic political interests SWFs were initially created to serve consequently remain critically unexamined. Drawing from the constructivist institutionalism literature, the thesis also seeks to demonstrate that SWFs are the institutional embodiment of a specific array of prescriptive fmancial ideas. It will be shown this framework offmancial 'knowledge' problematically constrains political actors to defer their interests to the demands of the speculative fmancial realm. In the face of recurrent crises, such constraint highlights how SWFs' immediate impact on domestic socioeconomic spheres outweighs their imagined fmancial benefits. The funds' rapid expansion since 2000 therefore poses significant implications for the nature and exercise of sovereign authority in SWF-states. These theoretical arguments are developed in Part I of the thesis, and then tested against three case studies in Part II: Norway's Government Pension Fund-Global; Alberta's Heritage Savings Trust Fund; and Ireland's National Pension Reserve Fund.

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This BLOG  looks at pensions and their impact on what are called Public Private Partnerships or P3’s these are not really about private funding at all but about two streams of public funding, pensions and government with private capital a third partner.
We will also deal with other pension matters, such as Defined Contribution Plans (DC) vs Defined Benefit (DB) PLANS, the weakness in private plans, the need for pension reform in public pensions to have shareholder rights, directorships and ethical investment directives and policies. 
Finally taking the long view we will show how these funds are forms of evolving social capital that is dominating private capital as we evolve into socialization of capital. 
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