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U4 Helpdesk Answer

The financial returns from anti-corruption and anti-money laundering initiatives

This Helpdesk Answer examines evidence on the costs of corruption and money laundering as well as the operational costs of anti-corruption and anti-money laundering initiatives. It then looks at the extent to which a cost-benefit analysis of these initiatives can be conducted. Although the data is inconclusive, some literature does suggest that there are some financial returns, particularly when measured through recovered assets. While more difficult to measure, the impact on the wider economy may be more profound.

11 March 2024
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The financial returns from anti-corruption and anti-money laundering initiatives

Main points

  • It is difficult to establish how much of an individual country's GDP is lost to corruption and money laundering per year. Existing estimates include 2.5% of the world's gross domestic product being lost to corruption each year. Similar estimates for the amount of money laundered include US$800 billion to US$2 trillion per year. However, these are approximations and should be treated as such.
  • Looking at sectoral level loss provided more precision. For example, the national health service in the UK reports around £1.27 billion lost to fraud, bribery and corruption each year.
  • One method of estimating the return of investment can include comparing the operating budget of agencies responsible for asset recovery versus the assets seized where such data is available.
  • For example, the US Department of Treasury Financial Crimes Enforcement Network operating budget in 2023 was US$222.9 million. In 2022, through investigating financial crimes, US$7.7 billion of assets were seized in total the US. In the UK, the National Crime Agency accounted for £872 million of expenditure in 2023/2024, and the same year the Home Office reported over £200 million of assets were confiscated.
  • A notable study measuring the profitability of asset confiscation work in the EU shows that all EU member states are estimated to be profitable, and only six were not.

Cite this publication

Maslen, C. (2024) Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2024:14)

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