IDEAS home Printed from
   My bibliography  Save this paper

Governance of Money Laundering: An Application of the Principal-agent Model


  • Shah, Syed Azhar Hussain
  • Shah, Akhter Hussain
  • Khan, Sajawal


In this model we evaluate the strategy of principal (international financial regime) and affectivity of the network of money transaction to minimize transaction of money through money laundering by making laws and procedure and get these implemented by agents. With the application of present value method of cost and returns to agents and clients payoff matrix is developed. The present strategy of principal seems suboptimal to involve informal agents and clients in anti- money laundering measures and it needs revision to involve them through incentives.

Suggested Citation

  • Shah, Syed Azhar Hussain & Shah, Akhter Hussain & Khan, Sajawal, 2006. "Governance of Money Laundering: An Application of the Principal-agent Model," MPRA Paper 8868, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8868

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, January.
    2. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    3. Mulligan, C. B. & Sala-i-Martin, X., 1997. "A labor income-based measure of the value of human capital: An application to the states of the United States," Japan and the World Economy, Elsevier, vol. 9(2), pages 159-191, May.
    4. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Shah, Syed Azhar Hussain & Shah, Syed Akhter Hussain & Khan, Sajawal, 2007. "Anti Money Laundering Mechanism: An Application of Principal-Agent Model for Pakistan," MPRA Paper 7436, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General


    Access and download statistics


    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:pra:mprapa:8868. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.