Uneven Progress on Sovereign Wealth Fund Transparency and Accountability

Sarah E. Stone (Williams College) and Edwin M. Truman (PIIE)

Policy Brief
16-18
October 2016

Sovereign wealth funds (SWFs)—government-controlled funds invested in whole or in part outside their home country—have grown in size, attracting political and financial attention focused on their lack of transparency. Suspicions have also grown about the motives behind their investments and their potential to disrupt countries economically, financially and politically. This Policy Brief updates and expands a prototype scoreboard rating the transparency and accountability of SWFs, which Truman established in 2007 to examine and promote the transparency and accountability of SWFs within and outside their countries. The first full scoreboard was released in April 2008, the second in September 2010, and the third in August 2013. The 60 SWFs scored in this fourth edition of the scoreboard record substantial differences: Some SWFs have high scores, others have low scores. Even funds within the same country have substantially different scores. Most important, many funds fall short of what the citizens of their countries or the international community should expect. On the other hand, the scores of many funds have improved over the past decade. The International Forum of Sovereign Wealth Funds (IFSWF) has been instrumental in promoting transparency and accountability of SWFs, and member funds generally score higher than nonmember funds. But the Forum can do more to increase its membership and improve the transparency of its members.

Data Disclosure: 

The analysis presented in this Policy Brief is based on the results of four scoreboards available here. In preparing the fourth (2015) scoreboard, the results of earlier scoreboards (2007, 2009, and 2012) were checked and scores were marked down on elements where there is no current evidence that the fund in question satisfies them. This Policy Brief uses the adjusted scoreboards for tracking progress on SWF transparency and accountability.