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Sovereign Wealth Funds and Long-Term Development Finance : Risks and OpportunitiesSovereign wealth funds represent a large
 and growing pool of savings. An increasing number of these
 funds are owned by natural resource exporting countries and
 have a variety of objectives, including intergenerational
 equity and macroeconomic stabilization. Traditionally, these
 funds have invested in external assets, especially
 securities traded in major markets. But the persistent
 infrastructure financing gap in developing countries has
 motivated some governments to encourage their sovereign
 wealth funds to invest domestically. This paper proposes
 some basic elements of a conceptual framework to create a
 system of checks and balances to help ensure that the
 sovereign wealth funds do not undermine macroeconomic
 management or become a vehicle for politically driven
 "investments." First, the risks and opportunities
 of domestic investment by sovereign wealth funds are
 analyzed. Central issues are the relationship of sovereign
 wealth fund financing to the budget process and to the
 procurement systems of sector ministries, as well as the
 establishment of appropriate benchmarks and safeguards to
 ensure the integrity of investment decisions. The paper
 argues that a well-governed sovereign wealth fund, with a
 sound mandate and professional management and staffing, can
 possibly improve the quality of the public investment
 program. But its mandate should not duplicate that of other
 government institutions with investment mandates, such as
 the budget, the national development bank, the investment
 authority, and state-owned enterprises. Establishing rules
 on the type of investment (for example, commercial and/or
 quasi-commercial) and its modalities (for example, no
 controlling stakes, leveraging private investment) is one
 way to ensure separation between the activities of the
 sovereign wealth fund and those of other institutions. The
 critical issue remains that of limiting the sovereign wealth
 fund's investment scope to that appropriate for a
 wealth fund. If investments that generate quasi-market
 returns are permitted, the size of the home bias should be
 clearly stipulated and these investments should be reported separately.
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Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical AssistanceThis paper discusses the constraints for
 private equity financing of small and medium enterprises in
 developing economies. In addition to capital, private
 equity investors bring knowledge and expertise to the
 companies in which they invest. Through active participation
 on the board of directors or in partnership with management,
 private equity investors equip companies with critical
 improvements in governance, financial accounting, access to
 markets, technology, and other drivers of business success.
 Although private equity investors could help to create,
 deepen, and expand growth of small and medium enterprises in
 developing economies, the vast majority of private equity in
 such markets targets larger or more established enterprises.
 Technical assistance, when partnered with private equity,
 can unlock more investor commitments and considerably
 enhance the ability of small and medium enterprises in
 emerging markets to raise private equity capital. Technical
 assistance provides funding that allows private equity funds
 to extend their reach to smaller companies. Technical
 assistance can mitigate some level of risk and increase the
 probability of successful investments by funding targeted
 operational improvements of investee companies. Dedicated
 technical assistance facilities financed by third parties,
 such as development finance institutions, governments, or
 other parties, have emerged to fill this critical need. The
 paper discusses the provision of investment capital twinned
 with technical assistance, which is now more accepted by
 limited partners and general partners or fund managers and
 is becoming more of a market model for private equity
 finance focused on small and medium enterprises.
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The Power of Public Investment Management : Transforming Resources into Assets for GrowthThis publication consists of seven chapters: building a system for public investment management; a unified framework for public investment management; country experiences of public investment management; approaches to better project appraisal; public investment management under uncertainty; procurement and public investment management; and public investment management for public-private partnerships.