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Policy Brief 11-14

IFSWF Report on Compliance with the Santiago Principles: Admirable but Flawed Transparency

by Allie E. Bagnall, Peterson Institute for International Economics
and Edwin M. Truman, Peterson Institute for International Economics

August 2011

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Allie E. Bagnall and Edwin M. Truman examine the International Forum of Sovereign Wealth Funds (IFSWF) report, which claims to be "a solid, initial step toward a better understanding of the IFSWF and of the Santiago Principles," and find this to be largely true, with a few limitations. The report, released July 7, 2011, is a self-assessment of the voluntary compliance of 21 member sovereign wealth funds (SWFs) with the Generally Accepted Principles and Practices of SWFs, issued in October 2008. Bagnall and Truman find that the extent of compliance with the Santiago Principles is somewhat exaggerated.  In addition, some of the 21 funds have substantially lower rates of compliance than others, which is not reported. However, the report is frank about many of the issues that arise with respect to the interpretation of its results, for example regarding the application of the principles on investment policies and on nonfinancial restrictions on SWF investment decisions. Ultimately, presentation may obscure some results in the IFSWF report, but Bagnall and Truman find the report credible and admirable.


RELATED LINKS

Book: Sovereign Wealth Funds: Threat or Salvation? September 2010

Policy Brief 13-19: Progress on Sovereign Wealth Fund Transparency and Accountability: An Updated SWF Scoreboard August 2013

Working Paper 11-12: Sovereign Wealth Funds: Is Asia Different? June 2011

Policy Brief 07-6: Sovereign Wealth Funds: The Need for Greater Transparency and Accountability August 2007

Op-ed: Four Myths about Sovereign Wealth Funds August 14, 2008

Policy Brief 08-3: A Blueprint for Sovereign Wealth Fund Best Practices April 2008