Corruption, terrorism and illicit financial flows related to extractive commodity trade in Africa

Simplice Asongu and Juste Somé

Resources Policy, 2025, vol. 103, issue C

Abstract: The purpose of this study is to assess the incidence of illicit financial flows (IFFs) on terrorism in Africa, contingent on corruption-control. The study utilizes data from 38 African counties spanning from 2002 to 2021. In order to increase room for policy implications, the overall IFFs measure is decomposed into two main sub-components, namely: illicit financial inflows and illicit financial outflows. The empirical evidence is also based on: (i) baseline regressions, (ii) estimations with the lagged independent variables in order to control for the simultaneity dimension of endogeneity, as well as (iii) GMM in order to account for both the simultaneity and unobserved heterogeneity dimensions of endogeneity. The robustness of the empirical analysis is further improved by limiting the sample to the Sahel countries in which most of the terrorism has been documented over the past decades. It is apparent from the findings that corruption-control effectively moderates IFFs, especially illicit financial inflows, in order to engender an overall negative effect on the outcome variable or terrorism. For the most part, the corruption-control policy thresholds are within policy range. Policy implications are discussed.

Keywords: Terrorism; Illicit capital flows; Extractive commodities; Corruption; Africa (search for similar items in EconPapers)
JEL-codes: C50 D74 F23 N40 O55 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420725001114
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:103:y:2025:i:c:s0301420725001114

DOI: 10.1016/j.resourpol.2025.105569

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().