Year: 2022
Type: article
Abstract: Illicit financial flows (IFFs) constitute a major challenge for development in low‐income countries, as domestic resource mobilization is imperative for providing crucial public services. The current paper focuses exclusively on the economic dimension of IFFs, thereby excluding topics as drugs trade, money laundering, and human trafficking. While several methods offer to measure the magnitude of IFFs, each has its benefits and drawbacks. Critically, methods based on the balance of payments identity may capture licit as well as illicit flows, and a method based on macroeconomic trade discrepancies suffers from doubtful assumptions. The most convincing estimate to date demonstrates that individuals hold financial assets worth around 10% of global GDP in tax havens. Evidence further indicates that developing countries are more exposed to individuals and multinational enterprises illicitly transferring money out of the country.
Source: Journal of Economic Surveys
DOI: 10.1111/joes.12518
Author: Kasper Brandt
Institution: University of Copenhagen
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,750
OpenAlex ID: W4285091758