In recent years, a growing number of Emerging Market Economies, as well as most advanced countries, have witnessed growth of pension funds as institutional investors. This has often occurred in the wake of pension reform shifting retirement income provision from pay-as-you-go to funding. The ongoing ageing of the population and financing difficulties of pay-as-you-go systems suggests that such reforms will become yet more common in the future. Accordingly, it is important to analyse the impact of institutional investment on the economy. In this context, our aim is to address the role of pension funds as institutional investors in financial development, and the wider effects of such financial development on economic performance. We note inter alia some of the ways in which the behaviour and impact of institutional investors might differ in emerging market economies from advanced countries as well as policy issues
