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Trillion Dollar Estimate: Illicit Financial Flows from Developing Countries

Nitsch, Volker :
Trillion Dollar Estimate: Illicit Financial Flows from Developing Countries.
In: Darmstadt Discussion Papers in Economics, 227. Darmstadt
[Report], (2015)

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Item Type: Report
Title: Trillion Dollar Estimate: Illicit Financial Flows from Developing Countries
Language: English
Abstract:

Recent estimates suggest that developing countries lose about 1 trillion US dollars each year due to illicit financial flows. This paper reviews the empirical methodology that underlies those estimates. Various critical aspects of the analytical approach are highlighted, focusing in particular on deficiencies in the use of mirror trade statistics to quantify the extent of capital outflows due to trade misinvoicing. Serious issues in the empirical analysis include, among others, arbitrary assumptions, mixed methodologies and skewed sampling. As a result, it is argued that the quantitative results obtained from those exercises have no substantive meaning. The trillion-dollar estimate of illicit financial flows from developing countries, therefore, lacks evidence and is uncorroborated.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 227
Place of Publication: Darmstadt
Uncontrolled Keywords: misinvoicing, mispricing, capital flight
Classification DDC: 300 Sozialwissenschaften > 330 Wirtschaft
Divisions: 01 Law and Economics > Volkswirtschaftliche Fachgebiete
01 Law and Economics > Volkswirtschaftliche Fachgebiete > International Economics
Date Deposited: 28 Apr 2016 11:53
Last Modified: 28 Apr 2016 13:27
URN: urn:nbn:de:tuda-tuprints-54379
Additional Information:

JEL Code: F14; F38

Additional Information:

JEL Code: F14; F38

URI: http://tuprints.ulb.tu-darmstadt.de/id/eprint/5437
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