Illicit Financial Flows: Another Road Block to Human Development in Low- and Middle-Income Countries

Ortega, Bienvenido; Sanjuán, Jesús; Casquero, Antonio

doi:10.1007/s11205-018-1942-z

Cited by 4 publications

(4 citation statements)

References 35 publications

(26 reference statements)

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“…In addition, a better level of financial integrity also indicates that a government can achieve its economic policies, which accelerate the overall economic progress through better use of public funds (Combes et al,2019;Ortega, Sanjuán & Casquero, 2019). Moreover, governments' efficiency in domestic and international fund transactions can positively affect monetary activities, removing obstacles to fund leakage from the illicit leakage and helping in achieving economic goals (Bashi et al, 2022;Kengatharan, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Empirical studies assert countries with low FI management frequently experience fund leakages from public sources through certain loopholes, such as illegal financial flows, trade misinvoicing, tax fraud, and money laundering, while strong FI management can limit fund leakages from the channels (Fisera, Tiruneh & Hojdan, 2021;Ortega, Sanjuán & Casquero, 2019). Transparent and leakage-free national and international transaction helps keep the money transparent and help to implement economic policies through the proper use of the public fund according to the projected trajectory (Osadume & Imide, 2022;Slama & Gueddari, 2022).…”

Section: Introductionmentioning

confidence: 99%

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Impact of External Debt and Financial Integrity Management on Economic Growth in Developing Countries: Evidence from the MMQR Approach

Musa¹,

Ali²,

Said³

et al. 2022

APMAJ

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The study examined the impact of external debt on economic growth in the context of developing countries. Since the level of financial integrity plays a vital role in the growth factor, we also investigated the direct impact of financial integrity (FI) management on economic growth as well as the moderating role of FI on the nexus between external debt and economic growth. To achieve the goals, we deployed a newly developed econometric approach, the Method of Moment Quantile Regression (MMQR), considering the quantile in both scale and location due to highly heterogeneous panel data from 1990 to 2020. The empirical estimation of the MMQR approach demonstrated that external debt is counterproductive in all quantiles for economic growth in the context of developing countries. Besides, FI management was insignificant in the bottom to top quantiles. Besides, the results also depicted that external debt works better for economic growth by the presence of FI in upper quantiles than the lower quantiles. The findings indicated that external debt is detrimental to economic growth in developing countries, while financial integrity management supports the debt-growth relationship. The study provides several policy implications. Keywords: external debt, economic growth, MMQR, financial integrity, developing countries

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Impact of External Debt and Financial Integrity Management on Economic Growth in Developing Countries: Evidence from the MMQR Approach

Musa¹,

Ali²,

Said³

et al. 2022

APMAJ

View full text Add to dashboard Cite

show abstract

“…IFFs are defined as illicit flows emanating from illegal financial transactions (Ortega et al 2019). IFF practices do not frequently contravene rules and regulations; however, management may make use of obscurity in the rules and regulations to portray their preferences on the financial position of the entity (Makhaiel and Sherer 2018).…”

Section: Conceptualising Illicit Financial Flows (Iffs)mentioning

confidence: 99%

A Conceptual Framework to Analyse Illicit Financial Flows (IFFs)

Netshisaulu

Poll

2022

Risks

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This article develops a conceptual framework, based on a comprehensive literature review, to address illicit financial flows (IFFs), characterised by the illegal move of monies or capital across country borders. IFFs compromise transparency through complex transactions and incur harmful effects for both developing and developed economies. Financial opacity creates a conducive environment for IFFs to flourish, as a challenge to good financial practices. Following an interpretive philosophy, an inductive research approach, qualitative methodological choice, cross-sectional time horizon all through data collection through review of scholarly literature, and framework were developed to analyse the said IFFs. Our framework encourages good corporate governance and provides insights, as well as the identification of possible characteristics of IFFs perpetuated in the financial statements of entities, which would discourage entities to engage in IFFs. Specifically, practitioners should be able to identify characteristics of IFFs and use the framework to address these. Within the finance dimension, it is important to study the specific mechanisms regarding how IFFs may damage an entity’s reputation, as well as their going concern. In future work, we shall enhance the framework through interviews with auditors, followed by a validation of the enhanced framework through a focus group. The utility of the final framework can be tested through case studies in the industry to analyse IFFs.

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“…remittances, portfolio investment, foreign direct investment, and official development assistance) and the long-run negative relationship among upsurge terror incidents, remittances inflow, and foreign direct investment and portfolio investment. Ortega et al (2019) and Ortega et al (2020) claimed that there is a significant relationship between illicit financial flows and human development and health services, particularly in low and middle-income countries. Osberghaus, (2019) investigated twenty-one studies of eighteen independent research teams including twelve empirical studies on the impact of natural disaster on financial flows and fluctuations on international trade, and revealed that foreign aid inflows and remittances slightly increase after disasters.…”

Section: Literature Reviewmentioning

confidence: 99%

A Country-Level Analysis of Worldwide Official Financing by International Financial Institutions

Basit¹,

Qazi

Khan

2021

ojs

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This study aims to evaluate worldwide official financial flows by international financial institutions to selected 123 countries of the world. The design of the study is composed of a review of literature elicited from research databases, extraction of secondary data of World Development Indicators (WDI) 2020, and mathematical analysis. In real time, cross-sectional country-level data, a classical process of Grey Relational Analysis (GRA) has been applied. Results of the study show that Argentina, Ethiopia, Bangladesh, India, Egypt, Arab Rep., Kenya, Costa Rica, Vietnam, Chad, Tanzania, Colombia, Uzbekistan, Nepal, Indonesia, Nigeria, Rwanda, Cameroon, and Uganda have exceptionally high grey relational grade meaning thereby, having an effective system of obtaining official international financial flows. Zimbabwe, Russian Federation, Botswana, Afghanistan, Bulgaria, South Africa, Burundi, Belarus, Kazakhstan, Armenia, Pakistan, Peru, Romania, and Ukraine have poor grey relational grade meaning thereby, having a relatively weak system of obtaining official financial flows. It is a unique study that provides extensive information on the official financial flows of more than a hundred countries of the world and provides the basis for the informed opinion of policymakers, political governments, economic policymakers, researchers, and academia. It also provides valuable information useful for international financial institutions.

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Illicit Financial Flows: Another Road Block to Human Development in Low- and Middle-Income Countries

Cited by 4 publications

References 35 publications

Impact of External Debt and Financial Integrity Management on Economic Growth in Developing Countries: Evidence from the MMQR Approach

Impact of External Debt and Financial Integrity Management on Economic Growth in Developing Countries: Evidence from the MMQR Approach

A Conceptual Framework to Analyse Illicit Financial Flows (IFFs)

A Country-Level Analysis of Worldwide Official Financing by International Financial Institutions

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