Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/228002 
Year of Publication: 
2020
Series/Report no.: 
AGDI Working Paper No. WP/20/024
Publisher: 
African Governance and Development Institute (AGDI), Yaoundé
Abstract: 
The study examines the use of governance tools to fight capital flight by reducing the capital flight trap. Two overarching policy syndromes are addressed in the study. It first assesses whether governance is an effective deterrent to the capital flight trap in Africa, before examining what thresholds of government quality are required to fight the capital flight trap in the continent. The following findings are established. Evidence of a capital flight trap is apparent because past values of capital flight have a positive effect on future values of capital flight. The net effects from interactions of the capital flight trap with political stability, regulation quality, economic governance and corruption-control on capital flight are positive. The critical masses at which "voice & accountability" and regulation quality can complement the capital flight trap to reduce capital flight are respectively, 0.120 and 0.680, which correspond to the best performing countries. Policy implications are discussed.
Subjects: 
governance
capital flight
capital flight trap
Africa
JEL: 
C50
E62
F34
O55
P37
Document Type: 
Working Paper

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