Chapter 2: SWFs: Definition and Classification
The debate about the SWFs seems to lack what should instead be a logical premise of regulating the activities of home states, host states and international organisations: a shared definition of a sovereign wealth fund. A definition is necessary for at least two reasons. First: it is obvious that the decision about whether – and, in case, how – a phenomenon should be regulated cannot be taken regardless of its preliminary qualification. Otherwise, any ex-post definition might be applied to just suit a set of rules that were already imposed (and that might not be the best ones). Second: any specific measure that, on one hand, imposes constraints on SWFs activity and, on the other, impairs the freedom of recipient states to protect specific enterprises of industrial sectors from the investments of other states would only be justified if the SWFs’ peculiar nature is such as to differentiate them very clearly from other types of investors. Several qualifications for SWFs are found in literature, especially economic, sometimes incompatible with one another. Those international institutions that have coded best practices for the funds (the IMF in particular) have put together existing definitions in order to broaden as much as possible the concept and consequently the scope of application of the rules they propose. Conversely, the OECD, that has deferred its guidelines for host states, has totally overlooked the issue of definitions. These different approaches have not facilitated the solution of the problem so far; but the question of definitions remains a priority above...
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