World Bank chief economist leaves after WB won't let her publish a report showing that putting aid into a developing economy increase the money leaving the country & getting laundered into off-shore tax havens!
#ButNothingsHappening
#ButNothingsHappening
Seems their research found that about 5% of foreign aid goes almost directly to tax havens. I suspect even more goes there indirectly through consulting contracts, loans & other instruments used to hide these transactions. 
The Economist is pay walled & I haven't found another access yet to read it in full.
It did lead me to this great paper, showing 15% of oil price windfalls to third world regimes go directly to off-shore havens.
nielsjohannesen.net/wp-content/upl…
It did lead me to this great paper, showing 15% of oil price windfalls to third world regimes go directly to off-shore havens.
nielsjohannesen.net/wp-content/upl…
Rent seeking has been a political problem since kings first learned to grant economic benefits to themselves, their allies & their lackeys.
This report looks at the oil industry because with 75% of it nationalized (often by autocratic governments) it is easily exploited by corruption to gain both services, transportation & production contracts.
This doesn't look at the built in or baseline corruption getting diverted into havens. This is only the extra diverted off when oil prices double....
Interestingly the correlation does not match up well with the International County Risk Guide corruption measures, because this type of corruption is very high level & hard to capture.
A similar effect was found in the other sector I have pointed to, the minerals extraction industry. But it doesn't show up in non-government controlled commodities markets. (but they may just be more price stable, corruption is baked in not variable)
Shell company games by ruling families & autocrats...
Interesting connections with other research, the money diverted by these leaders are used to shore up their regimes longevity. Buying friends within their country & outside. This is how PR firms, lobbyists, & services contracts are used to get western politicians to protect them.
This is how you get to rule a country for 30 years, you buy off enough allies locally to prevent a coup. Then you buy access so that Western intelligence agencies & national security bureaucracies protect your regime in the name of stability...
I love how even the process of selecting a list of what countries are havens is skewed. China put pressure to keep Macau & Hong Kong off the OECD list of havens.
Even at the 30,000 foot view it is hard to determine what is what. As assets are laundered through shell companies in one haven to bank accounts in another haven. This likely camouflages even larger figures for the amount of money diverted...
Another reason this undercounts the corruption is it only looks at bank deposits. It does not count money hidden in securities, stocks, bonds, funds & the like.
As I have stated before, many of these efforts were institutionalized in the 1970s by pioneers in global corruption
From 1977-2010 bank deposits in tax havens have grown from $12B to $2.6T as cash is stashed away from tax authorities & law enforcement.
From 1977-2010 bank deposits in tax havens have grown from $12B to $2.6T as cash is stashed away from tax authorities & law enforcement.
This is just the cash, not the totals as much of the money is hidden in investments & securities owned by shell companies. In 2013, those total estimates exceeded $32 trillion. And they have been growing by about $2T per year since then!
Interesting, autocratic countries place 50% of their overseas bank deposits into havens.
Non-autocratic countries ONLY place 25% of their foreign deposits into these havens.
Non-autocratic countries ONLY place 25% of their foreign deposits into these havens.
