Title: Legitimacy and market development risks of Sovereign Wealth Funds

Authors: Michael R. Hanna; Marcus Marktanner

Addresses: Center for Arab and Middle Eastern Studies, American University of Beirut, P.O. Box 11-0236/CAMES, Riad El-Solh/Beirut 1107 2020, Lebanon ' Coles College of Business, Kennesaw State University, Kennesaw, GA 30144, USA

Abstract: Sovereign Wealth Funds objectives can be classified as either demand stabilisation, supply side strengthening, or wealth conservation. These objectives cannot only be explained by domestic development needs, they also show different profiles of market development and political legitimacy risks. Specifically, we find that supply side strengtheners are on average exposed to both legitimacy and market development risks. Demand stabilisers carry only market development risks. Wealth conservation funds have the least exposure to either risk.

Keywords: sovereign wealth funds; SWFs; public policy analysis; political legitimacy risks; market development risks; demand stabilisation; supply strengthening; wealth conservation; risk exposure.

DOI: 10.1504/IJPP.2013.056588

International Journal of Public Policy, 2013 Vol.9 No.4/5/6, pp.400 - 415

Received: 19 Oct 2012
Accepted: 19 Apr 2013
Published online: 31 Jan 2014 *

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