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Andre Moulemvo - One of the best experts on this subject based on the ideXlab platform.
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Impact of Capital Flight on Public Social Expenditure in Congo‐Brazzaville
African Development Review, 2016Co-Authors: Leonce Ndikumana, Andre MoulemvoAbstract:type="main" xml:lang="en"> The economic literature has documented that a high level of Capital Flight affects domestic resource mobilization and development. However, some aspects of the effects of Capital Flight have not been adequately explored. This study assesses the effect of Capital Flight on public social expenditure in Congo-Brazzaville. It shows, through a simulation exercise covering the 2000–2012 period, that the opportunity cost of Capital Flight translates into substantial losses in health and education expenditures, and thus significantly delays the achievement of the MDGs 4 and 5. This means that policies aimed at curbing Capital Flight may have a positive effect on the level of spending on health and education.
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impact of Capital Flight on public social expenditure in congo brazzaville
African Development Review, 2016Co-Authors: Leonce Ndikumana, Andre MoulemvoAbstract:type="main" xml:lang="en"> The economic literature has documented that a high level of Capital Flight affects domestic resource mobilization and development. However, some aspects of the effects of Capital Flight have not been adequately explored. This study assesses the effect of Capital Flight on public social expenditure in Congo-Brazzaville. It shows, through a simulation exercise covering the 2000–2012 period, that the opportunity cost of Capital Flight translates into substantial losses in health and education expenditures, and thus significantly delays the achievement of the MDGs 4 and 5. This means that policies aimed at curbing Capital Flight may have a positive effect on the level of spending on health and education.
Leonce Ndikumana - One of the best experts on this subject based on the ideXlab platform.
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Impact of Capital Flight on Public Social Expenditure in Congo‐Brazzaville
African Development Review, 2016Co-Authors: Leonce Ndikumana, Andre MoulemvoAbstract:type="main" xml:lang="en"> The economic literature has documented that a high level of Capital Flight affects domestic resource mobilization and development. However, some aspects of the effects of Capital Flight have not been adequately explored. This study assesses the effect of Capital Flight on public social expenditure in Congo-Brazzaville. It shows, through a simulation exercise covering the 2000–2012 period, that the opportunity cost of Capital Flight translates into substantial losses in health and education expenditures, and thus significantly delays the achievement of the MDGs 4 and 5. This means that policies aimed at curbing Capital Flight may have a positive effect on the level of spending on health and education.
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impact of Capital Flight on public social expenditure in congo brazzaville
African Development Review, 2016Co-Authors: Leonce Ndikumana, Andre MoulemvoAbstract:type="main" xml:lang="en"> The economic literature has documented that a high level of Capital Flight affects domestic resource mobilization and development. However, some aspects of the effects of Capital Flight have not been adequately explored. This study assesses the effect of Capital Flight on public social expenditure in Congo-Brazzaville. It shows, through a simulation exercise covering the 2000–2012 period, that the opportunity cost of Capital Flight translates into substantial losses in health and education expenditures, and thus significantly delays the achievement of the MDGs 4 and 5. This means that policies aimed at curbing Capital Flight may have a positive effect on the level of spending on health and education.
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Capital Flight measurement and drivers
2014Co-Authors: Leonce NdikumanaAbstract:This paper describes the nature of Capital Flight, the methodologies used to measure it, and its drivers. The paper presents updated estimates of the magnitude of Capital Flight from 39 African countries for which adequate data are available for the period 1970-2010. It gives a global context of the problem of Capital Flight from Africa by providing comparative indicators on Capital Flight and related flows for other developing regions. The paper undertakes a detailed econometric analysis of the drivers of Capital Flight from African countries. It explores empirically the role of domestic and external factors in driving Capital Flight, including structural factors, the macroeconomic environment, governance, risk and returns to investment, Capital account openness, and financial development. The first objective of the study is to contribute to the literature by providing the most comprehensive analysis of Capital Flight from Africa that takes into account economic as well as non-economic dimensions, and recognizes the importance of both the domestic and global contexts. The second objective is to contribute to the policy debate on Capital Flight both in Africa and globally.
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Capital Flight: Measurement and Drivers *
SSRN Electronic Journal, 2014Co-Authors: Leonce NdikumanaAbstract:This paper describes the nature of Capital Flight, the methodologies used to measure it, and its drivers. The paper presents updated estimates of the magnitude of Capital Flight from 39 African countries for which adequate data are available for the period 1970-2010. It gives a global context of the problem of Capital Flight from Africa by providing comparative indicators on Capital Flight and related flows for other developing regions. The paper undertakes a detailed econometric analysis of the drivers of Capital Flight from African countries. It explores empirically the role of domestic and external factors in driving Capital Flight, including structural factors, the macroeconomic environment, governance, risk and returns to investment, Capital account openness, and financial development. The first objective of the study is to contribute to the literature by providing the most comprehensive analysis of Capital Flight from Africa that takes into account economic as well as non-economic dimensions, and recognizes the importance of both the domestic and global contexts. The second objective is to contribute to the policy debate on Capital Flight both in Africa and globally.
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Debt and Capital Flight
Handbook of Globalisation and Development, 1Co-Authors: James K. Boyce, Leonce NdikumanaAbstract:Many developing countries have experienced large-scale Capital Flight at the same time as they were borrowing from external creditors. The dual phenomena of external debt and Capital Flight raise important questions. Why does Capital flee developing countries even as foreign creditors continue to lend to them? Is there a link between inflows of borrowed money and outflows of Capital Flight? If so, what is the connection? Simultaneous external borrowing and Capital Flight reflect perverse incentive structures on both sides of the transactions that foster behaviour that is harmful from the standpoint of the borrowing country and, if the borrower ultimately cannot repay, from the standpoint of creditor institutions as well. Strategies to address the problem of Capital Flight must include mechanisms to curtail corruption, recover stolen assets, relieve the burdens of external debts, and promote transparency and due diligence in banks and other financial institutions. If well designed and rigorously implemented, such initiatives can curtail malfeasance, improve incentive structures, and contribute to a more efficient and equitable international financial architecture.
Léonce Ndikumana - One of the best experts on this subject based on the ideXlab platform.
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Capital Flight foreign direct investment and natural resources in africa
Resources Policy, 2019Co-Authors: Léonce Ndikumana, Mare SarrAbstract:This paper provides theoretical and empirical insights into the puzzling simultaneous rise in foreign direct investment inflows in Africa and Capital Flight from the continent over the past decades. Indeed, paradoxically, even as African countries have become more attractive to foreign private Capital, they have continued to experience Capital exodus in the context of improved economic performance, especially since the turn of the century. This paper explores three questions. First, does foreign direct investment fuel Capital Flight as has been established in the case of external borrowing? In other words, is there an FDI-fueled Capital Flight phenomenon akin to debt-fueled Capital Flight? Second, is natural resource endowment a possible channel for the Capital Flight-FDI link, given that resource-rich countries tend to be both preferred destinations of FDI and prominent sources of Capital Flight? Third, does the quality of institutions mitigate the impact of natural resources on Capital Flight? The paper develops a theoretical model that conceptualizes these linkages and sets the stage for an econometric investigation of these questions. The results from econometric analysis based on a sample of 30 African countries over the period 1970-2015 show that FDI flows are positively related to Capital Flight, suggesting a possible FDI-fueled Capital Flight phenomenon. However, there is no evidence for an FDI overhang effect; past stock of FDI has no impact on Capital Flight. High natural resource rents are associated with high Capital Flight and the quality of institutions does not mitigate this link. The paper offers some policy insights derived from the empirical results.
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Capital Flight and Tax Havens: Impact on Investment and Growth in Africa
2014Co-Authors: Léonce NdikumanaAbstract:This paper examines the implications of Capital Flight and tax havens for economic development in African economies. Specifically, it investigates the impact of Capital Flight on domestic investment and the opportunity costs of Capital Flight in terms of foregone growth. First, econometric analysis is used to assess the impact of Capital Flight on domestic investment. Second, a simulation exercise is undertaken to estimate the potential gains in terms of growth that could be derived from investing Capital Flight domestically. The empirical evidence is used to draw some policy implications.
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Capital Flight from africa causes effects and policy issues
2014Co-Authors: Ibi S Ajayi, Léonce NdikumanaAbstract:This edited collection provides the most comprehensive thematic analysis of Capital Flight from Africa, covering economic and institutional aspects, as well as domestic and global dimensions. It is organized in three parts. The first part discusses the importance of Capital Flight in the context of the development policy discourse at national and international level. This part takes stock of the existing evidence on the nature, causes, and consequences of Capital Flight. It provides the most recent data on the magnitude of Capital Flight from 39 African countries, and a detailed analysis of the impact of Capital Flight on economic development in general and on poverty reduction in particular. The second part examines economic factors and impacts of Capital Flight. It presents analysis of Capital Flight in a flow of funds context, the impact of Capital Flight on macroeconomic outcomes with a focus on growth, and the linkages between Capital Flight and monetary policy, financial liberalization, and the global financial system. The third part explores the domestic and international institutional environment and its relevance for Capital Flight and stolen asset recovery. It discusses the role of governance, tax evasion, and secrecy jurisdictions in driving Capital Flight. The last part of the book offers suggestions for strategies to address the problem of Capital Flight from African countries. Contributors to this volume - Julius Agbor, Africa Growth Initiative, Brookings Institution Ibi Ajayi, University of Ibadan Rabah Arezki, International Monetary Fund Melvin Ayogu, MISTRA Frank Barry, Trinity College Dublin James Boyce, University of Massachusetts Hippolyte Fofack, The World Bank Folarin Gbadebo-Smith, Center for Public Policy Analysis, Lagos Niels Hermes, Royal University of Groningen Abbi Kedir, University of Leicester Robert Lensink, Royal University of Groningen Isabella Massa, Overseas Development Institute Qingwei Meng, African Development Bank Humphrey P. B. Moshi, University of Dar-es-Salaam Victor Murinde, African Development Bank Ameth Saloum Ndiaye, Cheikh Anta Diop University of Dakar Leonce Ndikumana, University of Massachusetts Janvier Nkurunziza, UNCTAD Chris Ochieng, United States International University Gregoire Rota-Graciozi, International Monetary Fund Lemma W. Senbet, African Economic Research Consortium and University of Maryland John Weeks, SOAS, University of London
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Capital Flight from Africa: Causes, Effects, and Policy Issues - Capital Flight from Africa : causes, effects, and policy issues
2014Co-Authors: S. Ibi Ajayi, Léonce NdikumanaAbstract:This edited collection provides the most comprehensive thematic analysis of Capital Flight from Africa, covering economic and institutional aspects, as well as domestic and global dimensions. It is organized in three parts. The first part discusses the importance of Capital Flight in the context of the development policy discourse at national and international level. This part takes stock of the existing evidence on the nature, causes, and consequences of Capital Flight. It provides the most recent data on the magnitude of Capital Flight from 39 African countries, and a detailed analysis of the impact of Capital Flight on economic development in general and on poverty reduction in particular. The second part examines economic factors and impacts of Capital Flight. It presents analysis of Capital Flight in a flow of funds context, the impact of Capital Flight on macroeconomic outcomes with a focus on growth, and the linkages between Capital Flight and monetary policy, financial liberalization, and the global financial system. The third part explores the domestic and international institutional environment and its relevance for Capital Flight and stolen asset recovery. It discusses the role of governance, tax evasion, and secrecy jurisdictions in driving Capital Flight. The last part of the book offers suggestions for strategies to address the problem of Capital Flight from African countries. Contributors to this volume - Julius Agbor, Africa Growth Initiative, Brookings Institution Ibi Ajayi, University of Ibadan Rabah Arezki, International Monetary Fund Melvin Ayogu, MISTRA Frank Barry, Trinity College Dublin James Boyce, University of Massachusetts Hippolyte Fofack, The World Bank Folarin Gbadebo-Smith, Center for Public Policy Analysis, Lagos Niels Hermes, Royal University of Groningen Abbi Kedir, University of Leicester Robert Lensink, Royal University of Groningen Isabella Massa, Overseas Development Institute Qingwei Meng, African Development Bank Humphrey P. B. Moshi, University of Dar-es-Salaam Victor Murinde, African Development Bank Ameth Saloum Ndiaye, Cheikh Anta Diop University of Dakar Leonce Ndikumana, University of Massachusetts Janvier Nkurunziza, UNCTAD Chris Ochieng, United States International University Gregoire Rota-Graciozi, International Monetary Fund Lemma W. Senbet, African Economic Research Consortium and University of Maryland John Weeks, SOAS, University of London
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Strategies for Addressing Capital Flight
2014Co-Authors: James K. Boyce, Léonce NdikumanaAbstract:This paper discusses strategies to stem Capital Flight from African countries. It emphasizes the importance of the distinction between licitly and illicitly acquired Capital, and the need to tailor strategies to the specific type of Capital Flight concerned. Policies to prevent the illegal export of honestly acquired Capital and strategies to address both trade-related Capital Flight and transfer pricing are examined. The paper discusses strategies for preventing asset theft and for tracking and repatriating stolen assets. It discusses the burden of odious debts and the role of debt audits in addressing this problem. Finally it maps the contours of a global compact for the prevention of Capital Flight and tax evasion.
Mare Sarr - One of the best experts on this subject based on the ideXlab platform.
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Capital Flight foreign direct investment and natural resources in africa
Resources Policy, 2019Co-Authors: Léonce Ndikumana, Mare SarrAbstract:This paper provides theoretical and empirical insights into the puzzling simultaneous rise in foreign direct investment inflows in Africa and Capital Flight from the continent over the past decades. Indeed, paradoxically, even as African countries have become more attractive to foreign private Capital, they have continued to experience Capital exodus in the context of improved economic performance, especially since the turn of the century. This paper explores three questions. First, does foreign direct investment fuel Capital Flight as has been established in the case of external borrowing? In other words, is there an FDI-fueled Capital Flight phenomenon akin to debt-fueled Capital Flight? Second, is natural resource endowment a possible channel for the Capital Flight-FDI link, given that resource-rich countries tend to be both preferred destinations of FDI and prominent sources of Capital Flight? Third, does the quality of institutions mitigate the impact of natural resources on Capital Flight? The paper develops a theoretical model that conceptualizes these linkages and sets the stage for an econometric investigation of these questions. The results from econometric analysis based on a sample of 30 African countries over the period 1970-2015 show that FDI flows are positively related to Capital Flight, suggesting a possible FDI-fueled Capital Flight phenomenon. However, there is no evidence for an FDI overhang effect; past stock of FDI has no impact on Capital Flight. High natural resource rents are associated with high Capital Flight and the quality of institutions does not mitigate this link. The paper offers some policy insights derived from the empirical results.
Sweta Chaman Saxena - One of the best experts on this subject based on the ideXlab platform.
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Robbing the Riches: Capital Flight, Institutions and Debt
The Journal of Development Studies, 2008Co-Authors: Valerie Cerra, Meenakshi Rishi, Sweta Chaman SaxenaAbstract:Capital Flight undermines economic growth and the effectiveness of debt relief and foreign aid, and sometimes drains more resources from poor countries than does debt service. In an analysis of a large panel of developing and emerging market countries using annual data for 1970-2001, we show that both institutions and macro policies robustly affect Capital Flight. Our study also supports the existence of a revolving door relationship between debt and Capital Flight. More notably we find countries with weak institutions have a greater propensity to accumulate debt because weak institutions spur Capital Flight, which, in turn, creates a financing need.
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Robbing the Riches: Capital Flight, Institutions, and Instability
SSRN Electronic Journal, 2005Co-Authors: Valerie Cerra, Meenakshi Rishi, Sweta Chaman SaxenaAbstract:Capital Flight may undermine economic growth and the effectiveness of debt relief and foreign aid. This paper is the first attempt to test whether unsound macroeconomic policies or weak institutions lead to Capital Flight, using panel data for a large set of developing, emerging market and transition countries. In addition, the paper tests the revolving door hypothesis that links debt accumulation and Capital Flight, and analyzes the contribution of institutions to several channels in this relationship.
