Date of Award

Spring 1-1-2016

Document Type


Degree Name

Doctor of Philosophy (PhD)


Political Science

First Advisor

David H. Bearce

Second Advisor

Moonhawk Kim

Third Advisor

Andy Baker

Fourth Advisor

Robert McNown

Fifth Advisor

David Leblang


Over the past half-century, roughly one-quarter of states in the international system have created Sovereign Wealth Funds (SWFs). As a case of sovereign states investing public money mostly in private markets across borders, it is not altogether clear why SWFs have proliferated to this extent. What explains their spread in recent decades? In this dissertation, I argue that states create SWFs as a type of insurance against external risks that arise from participating in global markets. I reason that relatively vulnerable, medium powers presided over by secure leaders are the states most likely to create this type of institution. This is because SWFs are well suited to address an array of risks faced by this category of state. To evaluate my argument, I rely on novel datasets consisting of all states in the international system from 1950 to 2012, and all leaders in the international system from 1950 to 2004. I complement this analysis with four case studies to illustrate in greater depth the relationship between relative power, vulnerability, and the likelihood of states creating SWFs.