Sovereign Wealth Funds, Dependent Development, and the New Alliance Capitalism

In recent years, sovereign wealth funds (SWFs) have grown rapidly in importance. While SWFs are primarily used by governments to achieve macroeconomic/financial objectives, almost half of all SWFs are also used to further national economic developmental objectives. Such strategic use of SWFs by various governments has generated fears and paranoia in the popular media, yet there has been almost no systematic examination or analysis of this phenomenon.;The purpose of this dissertation is to determine the nature and extent of strategic SWF investment, and to understand this phenomenon in the context of theories of the state, development, and institutionally "variegated" globalization. In it, I address the following three questions: 1) How and to what extent are states employing SWFs strategically to achieve national developmental objectives? 2) How are patterns of strategic SWF investment shaped by processes of negotiation and coalition formation involving multiple state and non-state actors based in different countries? 3) What are the implications of strategic fund investment for development, in the counties under study, and in general?;These questions have been addressed empirically through two phases of research. In the first phase, comparative case studies were developed of four states that have been particularly active in the strategic use of SWFs: China, Abu Dhabi, Dubai, and Qatar. Through archival research, a series of network maps were developed to determine the nature and extent of strategic investment by eight funds belonging to these four states, and the role of these investments in their respective national developmental strategies. In the second phase, semi-structured interviews of public and private sector key informants were conducted in Germany and the United Arab Emirates to build a detailed picture of the strategic SWF mediated relationship between Germany and the Gulf Cooperation Council (GCC) states.;The results of this research suggest that the increasingly widespread strategic use of SWFs by states in the developing world can be seen as as attempt by states to compensate for declining territorial economic sovereignty through the development of new instruments of state extraterritoriality. These strategies, however, are fundamentally conditioned by the strategies of firm and state actors in the host economies with which SWF-owning states come into direct territorial contact through strategic SWF investment. Moreover, while strategic SWF investment may help to accelerate the development of the SWF-owning economy, the patterns of development thereby accelerated may nevertheless be dependency reproducing in nature.