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Illicit Financial Flow in view of Financing the Post-2015 Development Agenda


  • Towfiqul Islam Khan
  • Mashfique Ibne Akbar


The present study argues that not only is it important to have dedicated targets and indicators towards curbing illicit financial flow (IFF) in the post-2015 development agenda, but it is also necessary to understand the influencing factors behind the growing IFF phenomenon. The results of the quantitative analysis are intuitive in certain arenas, as well as confirmative in other aspects. Per capita GDP, openness and capital account convertibility have been found to be significant determinants of IFF in the developing countries. Nonetheless, exchange rate, inflation, democratic accountability and political stability also influence the flow of capital outflow, but these variables are interpreted with caution since these variables were not found to be influencing IFF in all of the estimation techniques considered in the analysis. The paper emphasises that continuous efforts will have to be put to uphold this issue when the Sustainable Development Goals (SDGs) are finalised at the United Nations General Assembly.

Suggested Citation

  • Towfiqul Islam Khan & Mashfique Ibne Akbar, 2015. "Illicit Financial Flow in view of Financing the Post-2015 Development Agenda," Southern Voice Occasional Paper 25, Southern Voice.
  • Handle: RePEc:svo:opaper:25

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    References listed on IDEAS

    1. Chinn, Menzie D. & Ito, Hiro, 2006. "What matters for financial development? Capital controls, institutions, and interactions," Journal of Development Economics, Elsevier, vol. 81(1), pages 163-192, October.
    2. Asian Development Bank (ADB), 2013. "Financing Low Carbon Urban Development in South Asia: A Post-2012 Context," ADB Reports RPT136012-2, Asian Development Bank (ADB), revised 20 Nov 2013.
    3. Blackburne, Edward F. III & Frank, Mark W., 2007. "Estimation of nonstationary heterogeneous panels," Stata Journal, StataCorp LP, vol. 7(2), pages 1-12.
    4. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
    5. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    6. Edward F. Blackburne III & Mark W. Frank, 2007. "Estimation of nonstationary heterogeneous panels," Stata Journal, StataCorp LP, vol. 7(2), pages 197-208, June.
    7. Dafe, Florence & Hartwig, Renate & Janus, Heiner, 2013. "Post 2015: why the development finance debate needs to make the move from quantity to quality," Briefing Papers 22/2013, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE).
    8. James Boyce & Léonce Ndikumana, 2008. "New Estimates of Capital Flight from Sub-Saharan African Countries: Linkages with External Borrowing and Policy Options," Working Papers wp166, Political Economy Research Institute, University of Massachusetts at Amherst.
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