IDEAS home Printed from https://ideas.repec.org/a/brc/brccej/v3y2018i4p83-92.html
   My bibliography  Save this article

Illicit Financial Flows And Corruption - The Actual Major Problem

Author

Listed:
  • Ivan LUCHIAN

    (International Institute of Management IMI-NOVA, Republic of Moldova)

  • Victoria IORDACHI

    (National Institute of Economic Researches, Republic of Moldova)

Abstract

Illicit financial flows represent a form of capital circulation at local andi nternational level, forming the circulation of financial assets of dubious origin. Their generators are various multinational corporations, corrupt officials, tax evaders, criminal entrepreneurs, etc. Illicit financial flows have diverse forms, including capital flight, money laundering, informal flows and classified financial entities such as tax havens, coming from different areas - shadow economy, tax evasion, and corruption. Conducted studies have shown a strong bilateral link between illicit financial flows and corruption. Corruption generates illicit financial flows and contributes to legalization of illicit money by different money laundering schemes at local and international level. Studies also demonstrated the importance as a catalyst of the quasi-corruption phenomenon. Both corruption and illicit financial flows have a negative impact on economic development, especially in developing countries. With a high level of poverty, countries annually illegally lose financial resources that could help solve their internal problems. As an eloquent example, this article relates the case of the Republic of Moldova. Endemic corruption of systemic character has a destructive economic, financial ands ocial influence in Moldova, favouring the illegal money exodus

Suggested Citation

  • Ivan LUCHIAN & Victoria IORDACHI, 2018. "Illicit Financial Flows And Corruption - The Actual Major Problem," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 3(4), pages 83-92.
    • Handle: RePEc:brc:brccej:v:3:y:2018:i:4:p:83-92
    as

    Download full text from publisher

    File URL: http://www.revec.ro/papers/180411.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tatiana PETROVA & Victoria IORDACHI & Dorina CLICHICI, 2017. "Assessment Of Illegal Capital Flows In The Republic Of Moldova," ECONOMY AND SOCIOLOGY: Theoretical and Scientifical Journal, Socionet;Complexul Editorial "INCE", issue 1-2, pages 95-102.
    2. Chander Kant, 2002. "What is Capital Flight?," The World Economy, Wiley Blackwell, vol. 25(3), pages 341-358, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yin‐Wong Cheung & XingWang Qian, 2010. "Capital Flight: China's Experience," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 227-247, May.
    2. Sadik, Ali T. & Bolbol, Ali A., 2003. "Arab External Investments: Relation to National Wealth, Estimation, and Consequences," World Development, Elsevier, vol. 31(11), pages 1771-1792, November.
    3. Bebonchu Atems & John K Mullen, 2016. "Outward FDI from the USA and host country financial transparency," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(8), pages 1122-1143, November.
    4. Onour, Ibrahim, 2010. "South Sudan Referundum: A Macroeconomic Analysis of Post-Secession Scenario," MPRA Paper 29897, University Library of Munich, Germany.
    5. Onour, Ibrahim, 2011. "Financial stability in small open economy under political uncertainty," MPRA Paper 29883, University Library of Munich, Germany.
    6. Léonce Ndikumana, 2016. "Causes and Effects of Capital Flight from Africa: Lessons from Case Studies," African Development Review, African Development Bank, vol. 28(S1), pages 2-7, April.
    7. Ramos, Miguel A. & Ashby, Nathan J., 2013. "Heterogeneous firm response to organized crime: Evidence from FDI in Mexico," Journal of International Management, Elsevier, vol. 19(2), pages 176-194.
    8. Beja Jr, Edsel, 2010. "Balance of Payments-consistent unreported flows," MPRA Paper 21699, University Library of Munich, Germany.
    9. Kant, Chander, 2005. "Capital mobility among advanced countries," Journal of Policy Modeling, Elsevier, vol. 27(9), pages 1067-1081, December.
    10. Raghbendra Jha & T. Palanivel, 2007. "Resource Augmentation for Meeting the Millennium Development Goals in the Asia Pacific Region," ASARC Working Papers 2007-02, The Australian National University, Australia South Asia Research Centre.
    11. Josef Brada & Ali Kutan & Goran Vukšić, 2011. "The costs of moving money across borders and the volume of capital flight: the case of Russia and other CIS countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 717-744, November.
    12. Brada, Josef C. & Kutan, Ali M. & Vukšić, Goran, 2013. "Capital Flight in the Presence of Domestic Borrowing: Evidence from Eastern European Economies," World Development, Elsevier, vol. 51(C), pages 32-46.
    13. Onour, Ibrahim & Cameron, Norman, 1997. "Parallel Market Premia and Misalignment of Official Exchange Rates," MPRA Paper 15537, University Library of Munich, Germany.
    14. Jeffrey Kurebwa, 2021. "Implications of Illicit Financial Flows on Zimbabwe's Development," International Journal of World Policy and Development Studies, Academic Research Publishing Group, vol. 7(2), pages 27-34, 06-2021.
    15. Ahmed Imran Hunjra & Hasnain Mehmood & Haroon Bakari, 2018. "Co-Movement between Macroeconomic Variables and Capital Flight," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(9), pages 1185-1195, September.
    16. Perez, M. Fabricio & Brada, Josef C. & Drabek, Zdenek, 2012. "Illicit money flows as motives for FDI," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 108-126.
    17. Ibrahim A. Onour & Bruno S. Sergi, 2021. "The impact of a political shock on foreign exchange markets in a small and open economy: A dynamic modelling approach," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 10(3), pages 137-152.

    More about this item

    Keywords

    illicit financial flows; capital circulation; capital flight; tax evasion; corruption; bank system;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:brc:brccej:v:3:y:2018:i:4:p:83-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cristina GANESCU (email available below). General contact details of provider: http://www.univcb.ro/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.