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Democracy and Corruption: On the Limited Role of Political Accountability in Deterring Asset Stripping

Author

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  • Melvin D. Ayogu

    () (Fellow, Africa Growth Initiative, Brookings Institution)

  • Tendai Gwatidzo

    () (School of Economics and Business Sciences, University of Witwatersrand)

Abstract

Focusing on capital flight of the worst kind for developing countries-stolen public assets-we develop a model which shows that both the threat of losing elective office and its complement, the threat of delayed detection, do not affect the choice of whether to plunder or not. Rather they mitigate the level of plundering. The role of instantaneous detection in the model drives the implication that separating a miscreant from the benefits of his crime can be an effective deterrent. However, such weaponry requires investment in the capabilities for "integrated financial investigation" and international cooperation. The ideas espoused in this paper corroborate the logic of the StAR initiative of the UNODC and the World Bank. We suggest the development of a research agenda on how to (i) grow adequate capabilities for detection, and (ii) create the political demand for the required international cooperation.

Suggested Citation

  • Melvin D. Ayogu & Tendai Gwatidzo, 2011. "Democracy and Corruption: On the Limited Role of Political Accountability in Deterring Asset Stripping," Journal of African Development, African Finance and Economic Association, vol. 13(2), pages 223-236.
  • Handle: RePEc:afe:journl:v:13:y:2011:i:2:p:223-236
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    Keywords

    Africa; Capital flight; Democracy; Corruption;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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