Working Paper

Do Illicit Financial Flows Hurt Tax Revenues? Evidence from the Developing World

Show simple item record

collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Combes, Jean-Louis
dc.contributor.author
Minea, Alexandru
dc.contributor.author
Sawadogo, Pegdewende Nestor
dc.date.accessioned
2021-09-27T21:29:03Z
dc.date.available
2021-09-27T21:29:03Z
dc.date.issued
2021-09
dc.date.lastModified
2021-09-28T05:10:41Z
dc.description.abstract
Recent work draws attention to the fragility of domestic tax revenues—a vital resource for the developing world—to illicit financial flows. To cope with two major challenges in the illicit financial flows–tax revenues relationship—related to the mere illicit financial flows measurement and reverse causality—this paper exploits the Financial Action Task Force data using an impact assessment analysis. Estimations reveal a significant tax revenue loss in countries associated with important illicit financial flows with respect to comparable countries without important illicit financial flows. Moreover, this causal effect—estimated as being economically meaningful—is supported by a large robustness section, and in particular remains unchanged when using several “doubly robust” estimators. Lastly, it unveils heterogeneities in the impact of illicit financial flows on tax revenues, related to the type of tax—a significant loss for indirect but not for direct taxes—and the considered environment. Therefore, policies combating illicit financial flows—for example, by developing institutions or a sound financial system, as shown by the estimations—may provide additional tax revenues for the developing world.
en
dc.identifier
http://documents.worldbank.org/curated/undefined/920391632411569911/Do-Illicit-Financial-Flows-Hurt-Tax-Revenues-Evidence-from-the-Developing-World
dc.identifier.uri
http://hdl.handle.net/10986/36308
dc.language
English
dc.publisher
World Bank, Washington, DC
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
TAX REVENUE
dc.subject
ILLICIT FINANCIAL FLOWS
dc.subject
FINANCIAL ACTION TASK FORCE
dc.subject
EVENT ANALYSIS
dc.title
Do Illicit Financial Flows Hurt Tax Revenues? Evidence from the Developing World
en
dc.type
Working Paper
en
okr.date.disclosure
2021-09-23
okr.date.lastmodified
2021-09-23T00:00:00Z
en
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://documents.worldbank.org/curated/undefined/920391632411569911/Do-Illicit-Financial-Flows-Hurt-Tax-Revenues-Evidence-from-the-Developing-World
okr.googlescholar.linkpresent
yes
okr.guid
920391632411569911
okr.identifier.doi
10.1596/1813-9450-9781
okr.identifier.externaldocumentum
090224b0889dab17_1_0
okr.identifier.internaldocumentum
33437623
okr.identifier.report
WPS9781
okr.imported
true
en
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/920391632411569911/pdf/Do-Illicit-Financial-Flows-Hurt-Tax-Revenues-Evidence-from-the-Developing-World.pdf
en
okr.topic
Finance and Financial Sector Development :: Financial Regulation & Supervision
okr.topic
International Economics and Trade :: Foreign Trade Promotion and Regulation
okr.topic
Law and Development :: Financial Law
okr.topic
Public Sector Development :: Regulatory Regimes
okr.unit
Office of the Chief Economist, Africa Region

Show simple item record



This item appears in the following Collection(s)