Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229393
Authors: 
Brandt, Kasper
Year of Publication: 
2020
Series/Report no.: 
WIDER Working Paper No. 2020/169
Abstract: 
Illicit financial flows (IFFs) constitute a major challenge for development in the Global South, as domestic resource mobilization is imperative for providing crucial public services. While several methods offer to measure the extent 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 ten per cent of global GDP in tax havens. Evidence further indicates that countries in the Global South are more exposed to individuals and multinational enterprises illicitly transferring money out of the country. Further research is warranted on profit shifting out of countries in the Global South and the effectiveness of anti-IFF policies in countries outside Europe and the United States.
Subjects: 
illicit financial flows
domestic resource mobilization
tax havens
multinational enterprises
profit shifting
JEL: 
H26
H87
F23
O23
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-926-6
Document Type: 
Working Paper

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