Managing the Public Trust: How to Make Natural Resource Funds Work for Citizens

Given their collective size – approximately $3.5 trillion in assets as of end-2013 and growing – and concerns about the motivations of their government owners, much has been written on natural resource funds (NRFs), their investments and global influence. However their impacts on governance and public financial accountability at home have received far less attention.

On the one hand, these funds can be used to serve the public interest, for example by covering budget deficits when resource revenues decline, saving for future generations, or helping to mitigate Dutch Disease through fiscal sterilization. On the other hand, they can undermine public financial management and be sources of patronage and nepotism.

The Natural Resource Governance Institute (NRGI) and Columbia Center on Sustainable Investment (CCSI) conducted a world-wide survey of NRFs looking at their management, investments, transparency, and accountability to the public, as well as the fiscal rules that govern them. This project sought to foster cross-country experience-sharing on fund governance. Policy briefs, the NRF profiles, and the webpage were designed to provide government officials, policymakers, researchers, and citizens with information to better understand NRF governance and in particular to equip policymakers with the necessary background to set up funds or reform existing ones.

The NRF profiles research methodology drew on a number of resources for its analytical framework, including Edwin Truman’s Sovereign Wealth Fund Scoreboard and NRGI’s Toolkit for Assessing Oil, Gas and Mineral Revenue Management. Each profile was the product of in-depth study of the laws, regulations, and policies governing one or a set of funds in a given country, province, or state. Primary sources were used when available and all profiles were peer-reviewed by sovereign wealth fund experts, based in-country where possible.