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Social Indicators Research

, Volume 142, Issue 3, pp 1231–1253 | Cite as

Illicit Financial Flows: Another Road Block to Human Development in Low- and Middle-Income Countries

  • Bienvenido OrtegaEmail author
  • Jesús Sanjuán
  • Antonio Casquero
Article
  • 144 Downloads

Abstract

This article analysed the relationship between illicit financial flows (IFFs) and human development, as measured with the United Nations Human Development Index (HDI), using data for 56 low- and middle-income countries for the period 2002–2013. The main result was that, in the cluster of the most corrupt countries, the total effect of an annual 10% point increase in the ratio of IFFs to total trade would imply a 21.7 points decrease in the HDI level as a long-run effect. Although apparently small, this estimated long-run effect is three times greater than the annual average increase observed in the HDI over the period for the entire sample of countries.

Keywords

Illicit financial flows Human Development Index Low- and middle-income countries Panel data analysis 

JEL Classification

F65 K42 O15 

Notes

Funding

This research did not receive any specific Grant from funding agencies in the public, commercial, or not-for-profit sectors.

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Copyright information

© Springer Nature B.V. 2018

Authors and Affiliations

  1. 1.Departamento de Economía Aplicada (Estructura Económica)Universidad de MálagaMálagaSpain

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