BEIRUT, May 6—Managers of Sovereign Wealth Funds (SWFs) gathering for their annual meeting in Sydney this week will likely note real progress on implementing the Santiago Principles—a voluntary code of conduct for SWFs designed to promote good governance, transparency, and accountability. In fact however implementation is highly uneven. There is still far to go if SWFs are to be responsible members of the global economy, concludes a new paper by Sven Behrendt.

Key Conclusions:

  • Only four of the 26 SWFs which signed the Santiago Principles are close to fully implementing all principles. As a voluntary agreement, it is at risk of failing if it does not gain wider support.
  • A country’s level of democracy correlates significantly with how fully its SWF has adopted the principles. But there is no strong correlation between a country’s level of economic development and its overall adherence.
  • At the upcoming G20 Summit in Toronto, leaders should acknowledge progress but urge SWFs to more aggressively comply with the Santiago Principles.

“The G20 wants to make progress on financial regulatory reform. The Santiago Principles are a test case for how broad the commitment to reforms in global finance is,” writes Behrendt. “The G20 should urge all signatories to the Santiago Principles to fully comply with them.”



  • Sven Behrendt is a visiting scholar at the Carnegie Middle East Center. He is an expert in global policy issues, international negotiations, corporate strategy, and diplomacy. Prior to his appointment at Carnegie, he served in various management positions at the World Economic Forum and the Bertelsmann Group on Policy Research. He is a regular commentator on television and in the press on corporate strategy and globalization.
  • The Carnegie Middle East Program combines in-depth local knowledge with incisive comparative analysis to examine economic, socio-political, and strategic interests in the Arab world to provide analysis and recommendations in both English and Arabic that are deeply informed by knowledge and views from the region.