Introduction

This introduction presents an overview of key concepts discussed in the subsequent chapters of this book. The book explains the Sovereign Wealth Funds (SWFs) some of which had been in existence since the 1950s fell under the media spotlight for the first time. While there is no universally accepted definition of a Sovereign Wealth Fund, various financial institutions, government agencies, and international organizations have provided definitions that generally share three main characteristics: ownership by sovereign governments, management of portfolios other than official national reserves, and involvement in overseas investments. In the United States and some European countries, the political scrutiny of SWFs overseas investments over the past few years was intensified due to the lack of information about these funds. Today, policy makers minds are occupied with the same fundamental concerns the loss of sovereign power. The study of SWFs requires a paradigm shift in our approach to the study of international political economy.