Illicit Financial Flows: Another Road Block to Human Development in Low- and Middle-Income Countries

Bienvenido Ortega, Jesús Sanjuán () and Antonio Casquero ()
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Jesús Sanjuán: Universidad de Málaga
Antonio Casquero: Universidad de Málaga

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2019, vol. 142, issue 3, No 16, 1253 pages

Abstract: Abstract This article analysed the relationship between illicit financial flows (IFFs) and human development, as measured with the United Nations Human Development Index (HDI), using data for 56 low- and middle-income countries for the period 2002–2013. The main result was that, in the cluster of the most corrupt countries, the total effect of an annual 10% point increase in the ratio of IFFs to total trade would imply a 21.7 points decrease in the HDI level as a long-run effect. Although apparently small, this estimated long-run effect is three times greater than the annual average increase observed in the HDI over the period for the entire sample of countries.

Keywords: Illicit financial flows; Human Development Index; Low- and middle-income countries; Panel data analysis (search for similar items in EconPapers)
JEL-codes: F65 K42 O15 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s11205-018-1942-z

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