Incentives and the Delegation of Decision Making Power in Sovereign Wealth Funds

Artur Grigoryan ()
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Artur Grigoryan: University of Siegen

No 201117, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: The paper models the incentives of a politician to delegate the decision making power in a sovereign wealth fund to an independent external manager. It formalizes the learning-e¤ects as well as the increase of transparency of the SWF and the rise of investment possibilities associated with higher transparency. It also focuses on the role of elections as a basic mechanism to control and discipline politicians. I show that the politician has incentives for strategic behaviour if voters have incomplete information about his competence. The paper also studies when the delegation of decision making power is socially optimal and under which circumstances it takes place.

Keywords: DSovereign Wealth Fund (SWF); Transparency; Policy Delegation; External Management (search for similar items in EconPapers)
JEL-codes: D7 E6 F3 G2 (search for similar items in EconPapers)
Pages: 30pages
Date: 2011
New Economics Papers: this item is included in nep-cdm and nep-cta
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https://www.uni-marburg.de/en/fb02/research-groups ... 7-2011_grigoryan.pdf First version, 2011 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201117

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