The regulatory environment of illicit financial flows with a special focuson selected sectors

Illicit financial flows (IFFs) drain state finances and economic vitality, with disproportionate impact on developing economies. IFFs—including money laundering, tax evasion, and tax avoidance—pose a transnational problem addressed so far through international regimes of coordination and cooperation. But meaningful reductions in IFFs require addressing the root of the problem: information asymmetries. Developed nations and tax havens know where money is hidden and profits are made, while developing nations do not. Since the international system of global finance creates the incentive structure and permissive environment for illicit flows, it is at this level that states must focus their policy-making attention. New information-sharing mechanisms, such as automatic exchange of tax information and public country-by-country tax reporting, can level the playing field and enable lower-income states to effectively address the IFF problem.

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Natural Resources and Illicit Financial Flows from BRICS Countries

Biophysical Economics and Sustainability ◽

10.1007/s41247-021-00085-8 ◽

2021 ◽

Vol 6 (1) ◽

Author(s):

Hajer Dachraoui ◽

Maamar Sebri ◽

Mahmoud M. A. Dwedar

Keyword(s):

Natural Resources ◽

Financial Flows ◽

Brics Countries ◽

Illicit Financial Flows

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Hidden Inequality: How Much Difference Would Adjustment for Illicit Financial Flows Make to National Income Distributions?

Journal of Globalization and Development ◽

10.1515/jgd-2016-0022 ◽

2016 ◽

Vol 7 (2) ◽

Cited By ~ 3

Author(s):

Alex Cobham ◽

William Davis ◽

Gamal Ibrahim ◽

Andy Sumner

Keyword(s):

National Income ◽

Financial Flows ◽

Preliminary Results ◽

Income Distributions ◽

Top Incomes ◽

Recent Innovation ◽

Illicit Flows ◽

Illicit Financial Flows ◽

Using Data

AbstractA recent innovation in measuring inequality is the incorporation of adjustments to top incomes using data from tax authorities, revealing higher inequality. The thesis of this paper is that the incorporation of estimates of income from illicit financial flows (IFF), reflecting untaxed capital, may be as significant to national inequality – but with greater variation across countries. We propose a method of adjusting national inequality data for illicit flows, and present preliminary results. These estimates suggest that untaxed illicit flows could be as important as (taxed) top incomes to estimates of inequality – highlighting the importance of improving estimates of underlying illicit flows.

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