Edwin Truman at SAIS

By Brett Keller

The International Finance Club at the Johns Hopkins School of Advanced International Studies (SAIS) hosted a lunch panel today on the subject of “Sovereign Wealth Funds: Assessing the Risks and the Opportunities.” The panelists were Edwin Truman, senior fellow at the Peterson Institute for International Economics and William Miracky, senior partner at the Monitor Group, which released its report on SWF behavior in June 2008.

Edwin Truman at SAIS

Truman started off with a general summary of the definition of sovereign wealth funds, then talked about his own SWF Scoreboard. Truman’s Scoreboard incorporates four categories of information: 1) structure, 2) governance, 3) transparency and accountability, and 4) behavior. Truman includes pension funds in his analysis, unlike some other SWF scholars and in general the pension funds fare better on Truman’s Scoreboard than the more strictly defined SWFs. Also, of the items on which Truman scored the funds, 96% of the funds had a well-defined objective, whereas only 17% publicly announce adjustments to their portfolios.

Next, Dr. Truman briefly discussed several SWF-related questions for policymakers in OECD states:

  1. How much should a country invest abroad?
  2. What should be the role of the government?
  3. If the government has a role,what should be its investment strategy?
  4. What mechanisms should the government use to demonstrate is accountability?
  5. How does increases transparency contribute to accountability?
  6. How does an investing government keep host countries open?

Truman, who has written extensively on the IMF before, seemed generally positive about the International Working Group’s progress, pending the release of the actual agreements. He said the developments were “encouraging” but worth watching closely. In conclusion, Dr. Truman again advocated the idea of reciprocal responsibility.

More on William Miracky’s comments and the Q&A session in my next post.

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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