Saudi Arabia Joins the Sovereign Wealth Fund “Club”

The Economist reports that Saudi Arabia will be the next nation to start a sovereign wealth fund. These funds have been proliferating recently, creating considerable disagreement among economic commentators. Some see them as dangerous because they magnify the investment clout of human rights abusers like the Chinese leadership. Others, however (including the OECD) find them to be beneficial to their home nations and the recipients of their investments. But even many of the funds supporters emphasize the need for more transparency. The Norwegian fund is the recognized exemplar of transparency, and the Saudis’ statements suggest that they will take Norway’s practices as a model. But many are skeptical about whether or not this kind of openness and accountability can be achieved in the political culture of a nation like Saudi Arabia.