Adam D. Dixon


The financial crisis ultimately caused Western governments to welcome sovereign wealth fund (SWF) investment as a way to put a floor under collapsing markets and to provide a set of voluntary principles that would underwrite SWFs’ claim to legitimacy in the international community. In the autumn of 2007, then U.S. Treasury Secretary Henry Paulson, in conjunction with the International Monetary Fund, convened the International Working Group of SWFs (IWG) to draft a set of generally accepted principles and practices. These principles are referred to as the “Santiago Principles.” The implicit objective of these twenty-four voluntary principles is to promote greater transparency and disclosure among the SWF com-munity and mollify skepticism surrounding their commercial orientation. Like any voluntary standard, compliance relies on the goodwill of the organization, and ultimately, the organization’s sponsor. Compliance is further complicated when there are varied interpretations as to the standard requirements. What is needed is an explicit treatment of transparency in its different forms such that SWFs, their sponsors, and external analysts have a dis-cursive device for evaluating and communicating when and why (and why they think) certain nondisclosures are legitimate, or more importantly, when and why transparency in one domain may diminish the significance of disclosure in other areas, thus reducing the significance of non-disclosure in those areas. The aim, then, is to encourage dialogue, in conjunction with the Santiago Principles, on nondisclosure as doing so leads to increased transparency overall. Said slightly differently, dialogue on nondisclosure is, in itself, a form of transparency.