The United States government’s recent decision to establish a sovereign wealth fund has boosted interest in these vehicles in the U.S. and beyond, even though several U.S. states have maintained domestic sovereign wealth funds for decades. This study offers the first examination of why some U.S. states currently possess sovereign wealth funds while others do not. In doing so, we find high-income and resource-rich states are more likely than their lower-income and resource-poorer counterparts to currently possess a sovereign wealth fund. Additionally, state spending on K-12 education is negatively related to the likelihood the state currently owns a sovereign wealth fund, perhaps owing to their limited absorptive capacities relative to the scale of their resource revenues.
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