From Paper Compliance to Strategic Defense: A Game Theoretic Framework for Incentive Alignment in Sierra Leone Anti Money Laundering Regime

Jalikatu Kalokoh and Samuel Conteh
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Jalikatu Kalokoh: Masters Student in Accounting, School of Economics and Management, Beihang University, Beijing, China.
Samuel Conteh: Masters Student in Business Administration, School of Economics and Management, Beihang University, Beijing, China.

Journal of Scientific Reports, 2026, vol. 12, issue 1, 63-74

Abstract: The 2024 Anti-Money Laundering, Combating the Financing of Terrorism, and Proliferation of Weapons of Mass Destruction Act signifies Sierra Leone progress in establishing a sound legal AML or CFT framework. However, a significant implementation gap persists. This study identifies the core issue as a strategic incentive misalignment among key parties, creating a collective action problem. Using a game theoretic model, we diagnose this failure as a classic Prisoner's Dilemma among banks and a Coordination Game between banks and the Financial Intelligence Unit FIU. We propose and empirically test an Incentive Alignment Framework based on a Tiered Supervision model. This intervention reconfigures the strategic environment by offering tangible benefits for high-quality compliance. A cost benefit analysis demonstrates that while FIU operational costs may rise by 83% due to investigating more complex cases, the regimes overall efficacy soars, with projected increases of 131% in net systemic benefit and 129% in successful prosecutions. This confirms that aligning incentives can transform compliance from a defensive burden into a strategic advantage.

Keywords: Anti-Money Laundering; Game Theory; Incentive Alignment; Sierra Leone; Financial Regulation; Prisoner Dilemma; Tiered Supervision; Financial Intelligence Unit. (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:aif:report:v:11:y:2026:i:1:p:63-74

DOI: 10.58970/JSR.1155

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