Abstract
This chapter considers benchmarking from a political economic perspective, arguing that benchmarks are not only about performance but also about legitimacy and intent. The speaker goes on to describe Chile's Economic and Social Stabilization Fund and its search for an external manager in March 2008. More than 100 candidates were narrowed down to 10 finalists by September 2008, who arrived in Santiago just as Lehman Brothers collapsed. However, a decision was made not to change their investment policy right away. He argues that for commodity-based economies, stabilization funds save windfalls and accumulated resources. The expected value of the stabilization funds in the long term should be zero. The funds do not have to be placed on a shelf like a trophy, but used when the rainy days come. He also discusses the importance of legitimizing the process of saving.
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