Taming Leviathan: Foreign Investment, Political Risk and a Regulatory Framework for Sovereign Wealth Funds

Abstract

Sovereign wealth funds (SWFs) are key actors in the global financial landscape of the twenty-first century. According to the OECD, at the peak of the global financial crisis, government driven international M&A reached US$120 billion, or 20% of the total international M&A. This dropped significantly in 2010 to US$70 billion, or 10% of the total, but still well above the average of 3% between 2000 and 2007. The bulk of this government‐driven international investment originated either in China or SWFs in the Middle East and North Africa region (MENA) and Asia.