Capital flight and the banking sector
Capital flight erodes the financial basis of developing countries, and the illicit financial flows are a major constraint for the implementation of efficient development policy by facilitating corruption, tax evasion and organized crime. The role of banks and financial institutions in facilitating capital flight is acknowledged, but there is a need for more systematic studies of the banking sector’s involvement to be able to formulate policies to address the problem. On this background Norad has commissioined CMI to conduct a review of existing literature on the role of banks and financial institutions in capital flight from Africa. This mapping study is an initial step in the process to identifying possible areas for Norwegian development aid interventions related to capital flight.
The paper will focus on Africa because of the large challenges connected to the relatively unregulated banking sector in many African countries. The project is a desk study that will produce a literature review that is addressing the following issues:
- What literature exists on the issue?
- What are the main concerns and areas of focus in the existing literature?
- What does the literature say are the most common methods when using banks to channel illegal money flows?
- Which actors and institutions are currently occupied with the issue?
- Which knowledge gaps can be identified?
The full report can be accessed here:
Illicit financial flows within the extractive industries sector: a glance at how legal requirements can be manipulated and diverted
Crime, Law and Social Change
Besteuerung und Kapitalflucht aus Afrika: Die Steuervermeidungsindustrie [The tax avoidance industry: facilitators of capital flight from Africa]
Taxing Africa: Coercion, Reform and Development
Mick Moore, Wilson Prichard and Odd-Helge Fjeldstad
With a little help from the banks
Kari Heggstad and Odd-Helge Fjeldstad
Lifting the veil of secrecy: Perspectives on international taxation and capital flight from Africa
Corruption, évitement fiscal, blanchiment dans le secteur extractif: de l'art de jouer avec le droit
Social accountability and water integrity: Learning from experiences with participatory and transparent budgeting in Ethiopia and Nepal
Birke Otto, Floriane Clement, Binayak Das, Hari Dhungana, Lotte Feuerstein, Girma Senbeta, Jasmina Van Driel
‘Kenyapowerless’ – Corruption as 'Problem Solving' in Kenya's Periphery
Festus Boamah, David Aled Williams