The sudden and spectacular increase in the size and number of sovereign wealth funds (SWFs) in the late 2000s seems to run against the trends regarding more hybrid public-private forms of governance analyzed in the rest of this volume. Indeed, some analysts (Bremmer 2010) saw the rise of large SWFs not just as a simple reversal of prior trends towards privatization but also as the return of state capitalism as the dominant form of industrial organization. Hybridization occurred as the state delegated tasks to private entities or deregulated private activity. By contrast, states used SWFs as an instrument to expand their ownership of and control over private entities rather than delegating authority to private entities. What does the (re)emergence of SWFs tell us about the current relationship between states and markets, the boundaries between public and private actors, and the nature of the hybrid state? Three problems diminish the utility of most current analyses of SWFs with
respect to understanding state formation and hybridization: data deﬁciencies, faulty framing, and conceptual confusion. First, many SWFs conceal their holdings, investment strategies and behaviors. Secrecy in itself is informativewhat is there to hide?—but it also subtracts enough information to render any conclusions tentative. Second, as with most social phenomena, initial analyses of SWFs framed the issue in terms of some ‘usual suspects.’ Here the usual suspect issue was SWFs’ salience for U.S. international economic policy and power. This orientation turned these analyses into pragmatic policy exercises lacking any grounding in a theoretical perspective and obscuring all the most interesting things about SWFs.2 Finally, conceptually, the label ‘sovereign wealth fund’ obscured rather than illuminated the social phenomena it was supposed to represent. SWF is a portmanteau label that confusingly conﬂates three distinct patterns of on-going state formation and thus does not always signify hybridization. A SWF is not a SWF is not a SWF-the label covers a heterogeneous not a homogenous phenomenon. This chapter places the analysis of SWFs on ﬁrmer ground by approaching
it from the perspective of hybridization. It identiﬁes three diﬀerent kinds of
SWFs based on divergent state building processes and forms of hybridization. Some SWFs constrain actors’ current spending and thus buﬀer resource economies against price volatility or secure pension income for the future. These are closest to the hybrid phenomenon explored in the rest of the book A second set of SWFs are largely an instance of Max Weber’s political capitalism, in which actors make proﬁts on the basis of special deals with political authorities (Love 1986). In the best case this makes them useful vehicles for development. In the worst case they create the third and ﬁnal group of SWFs, which encompass personal investment vehicles for politically powerful actors in patrimonial regimes.