Temptation and the Virtues of Long-Term Commitment : The Governance of Sovereign Wealth Fund Investment

In this article we look at the governance of SWFs from the perspective of the competing political interests embedded in the sponsor – the domestic political claims on funds and the principles and practice of governance used to discipline those interests in favour of a long-term perspective that emphasizes the conservation of wealth and the intergenerational transfer of benefits. Using the case study of the Australian SWF known as the Future Fund, we argue that SWFs can be used as legal instruments to promote the interests of future generations. In this way, it puts into action the principle of intergenerational equity which has been hereto notoriously difficult to substantively apply in international law. By invoking the intergenerational principle we argue that the Australian government not only responded to the legal challenges of implementing intergenerational equity but also contributed to its currency as a customary norm