Watchdogs or partners in crime? The power play of governance and illicit financial flows: a systematic literature review

Muhammad Kashif Khalil, Muhammad Ali and Ahmad Hakimi Tajuddin

Journal of Money Laundering Control, 2025, vol. 28, issue 6, 727-746

Abstract: PurposeThis study aims to conduct a systematic literature review on illicit financial flows (IFFs), with a focus on uncovering the institutional and behavioral factors that shape such flows at global, national and corporate levels.Design/methodology/approachFollowing the PRISMA protocol, 25 highly cited peer-reviewed articles (2005–2023) were retrieved from Scopus. Manual thematic coding and deductive synthesis were applied to categorize evidence related to enforcement failures, regulatory arbitrage, institutional loopholes and the dual role of technology. A new conceptual framework links IFF dynamics to governance and cross-border accountability.FindingsFour key themes emerged: definitional ambiguities and inconsistent metrics, regulatory arbitrage through trade misinvoicing and capital shifting, opaque intermediaries and shell structures and digital enablement via fintech and unregulated platforms. These patterns reflect a broader enforcement–enablement dynamic, with limited institutional perspectives and weak cross-jurisdictional regulatory coordination.Research limitations/implicationsThis review is limited to English-language journal publications indexed in Scopus, potentially omitting gray literature and policy-based regional insights, particularly from low-income jurisdictions.Originality/valueThis study offers a theory-informed synthesis of IFFs by reframing them as outcomes of systemic governance failures rather than isolated financial crimes. It integrates governance, compliance and deterrence perspectives into the enforcement–enablement framework and aligns findings with Sustainable Development Goals 16.4 and 17.

Keywords: Illicit financial flows; PRISMA protocol; Enforcement–enablement framework; Sustainable Development Goals; Financial governance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-08-2025-0147

DOI: 10.1108/JMLC-08-2025-0147

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