Global Attractive Index for Money laundering using Walker’s Gravity Model: An Approach to Determine the Preferred Destination

This study is an attempt to establish a Money Laundering Attractiveness Index (MLAI) for the countries that are preferred for money laundering. The study first discussed the concept of money laundering and also highlighted the size or volume of money laundered we are trying to deal with. Walker's Gravity Model has been used to determine the preferred destinations, the model was developed by John Walker to estimate the illegal flow of funds globally. The model consists of two segments including attractiveness and distance. Data from 2002 to 2022 has been collected and used across around 150 countries. We also investigated the link between money laundering across countries classified by the World Bank into income groups: low-income, lower-middle-income, upper-middle-income, and high-income economies. The study analyzed the flow of illegal funds from the source country to the preferred destination from all income groups and also determined the amount involved. The results show that countries with stable economic conditions and higher standards of living hold the top positions in the money laundering attractiveness index. The study concluded with the recommendations to revisit the global approach in the fight against money laundering and other organized crimes and to formulate and implement more focused policies in the fight against money laundering by using the attractive destination index.