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Addressing illicit financial flows for anti-corruption at country level

A primer for development practitioners

Developing countries lose a massive volume of wealth through illicit financial flows (IFFs), presenting a major threat to their development. Initiatives to address IFFs exist at national, regional, and international levels but present several challenges. Collaboration is required across borders, to strengthen the integrity of the global financial system, encourage more transparency, and tackle international corruption and movement of illicit funds.

9 June 2019
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Main points

  • IFFs have devastating consequences for developing countries as a vast volume of wealth is lost every year that could be used to fund sustainable development and provide public services.
  • As well as significantly reducing IFFs, strengthening the rule of law and prosecuting offenders could increase citizens’ trust in state institutions and contribute to stability.
  • Standard estimate methodologies cannot be relied upon to determine the true scale of IFFs; however, there is widespread agreement that it is huge and IFFs pose a major obstacle to development.
  • The possibility of moving capital illicitly makes it easier to engage in corruption; yet many features of the global financial system facilitate IFFs.
  • Measures to tackle IFFs differ depending on the country and the underlying activity, making it difficult for development practitioners to address the problem of IFFs in partner countries and regions.
  • Although global attention on combating IFFs has increased, the scale of donor support is relatively modest. There is a need to strengthen existing regional networks and organisations through greater cross-border collaboration and political dialogue.
  • The successful collaboration between enforcement, legal, and financial agencies has led to a coordinated policy response to IFFs. Future strategies should identify key points for engagement on the issue with local and national governments and agencies.

Cite this publication


Meyer Dolve, M.; Mullard, S.; (2019) Addressing illicit financial flows for anti-corruption at country level. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Issue 2019:8)

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About the authors

Maria Helena Meyer Dolve

Maria Helena Meyer Dolve is a political scientist. She worked as a research and administrative assistant at the U4 Anti-Corruption Resource Centre from 2017–2019. She holds a master's and a bachelor’s degree in Comparative Politics from the University of Bergen. In her master's thesis she studied the effect of Chinese development aid on governance in Sub-Saharan Africa.

Saul Mullard is a senior adviser at the U4 Anti-Corruption Resource Centre and a civil society specialist with a background in historical sociology, development studies and South Asian studies. His research interests include the relationship between corruption and climate change and the role of local communities and indigenous peoples in addressing corruption and environmental protection. Mullard holds a doctorate and master’s in South and Inner Asian Studies from the University of Oxford, as well as a BA in Development Studies from the School of Oriental and African Studies (SOAS) in London.

Disclaimer


All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


illicit financial flows, financial integrity