Sovereign Wealth Funds ending United States protectionism?
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2020-06-24
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en
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Abstract
For a long time, the United States of America (US) tried to prevent acquisitions of foreign
governments into vital economic sectors. This long-held policy seemed to change during the onset
of the subprime mortgage crisis when Sovereign Wealth Funds (SWFs) acted as white knight’s
and provided much-needed liquidity for failing US financial institutions. The US government did
not intervene in these investments, which caused politicians to publicly voice their concerns and
lengthy congressional hearings. The final governmental response was to accept investments and
enact ‘best practices’ for SWFs and ‘guidelines’ for SWF investment recipient countries at the
IMF and OECD level. Which respectively ensured that SWFs do not invest politically, and SWF
investment recipient countries do not discriminate between state owned enterprises or private
companies. This research tried to understand this policy decision through the detailed analysis of
three policy phases. It finds that neither the Neoclassical Mercantilist nor the Critical Political
Economy (CPE) approach can fully explain this decision. Interestingly, a combination between
both approaches seems to explain why the US chooses to proliferate neoliberal policies that do not
regulate SWFs directly. It seems that the state has more agency than expected by the CPE
approach, but, in contrast to the Neoclassical Mercantilist approach, it has to be acknowledged that
the state’s decision-making is influenced by neoliberal structures. Therefore, that might imply that
the proliferation of neoliberal supremacy within international institutions and the government can
be explained by the US’s seemingly deliberate decisions.
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Faculteit der Managementwetenschappen