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False and Reluctant Friends? National Money Laundering Regulation, International Compliance and Non-Cooperative Countries

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Abstract

In the aftermath of September 11th, growing attention has been paid to the role of Non-Cooperative Countries and Territories (NCCT) in money laundering and terrorist financing. The paper, applying the new political economy approach in the law and economics field, provides a model to describe, through the policymaker payoff maximization, the relationships between specific country features and endowments, on the one hand, and lax financial regulations, on the other hand. Given that in the real world relatively lax regulation means a non-cooperative attitude in the international fight against money laundering and terrorist financing we empirically test the above theoretical relationship in the case of the NCCT jurisdictions. The policy consequences on the pros and cons of international blacklisting procedures are discussed.

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Authors and Affiliations

  1. Paolo Baffi Centre, Bocconi University and Department of Economics, Mathematics and Statistics, University of Lecce, Italy

    Donato Masciandaro

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  1. Donato Masciandaro
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Correspondence to Donato Masciandaro.

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JEL K42, G28

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Masciandaro, D. False and Reluctant Friends? National Money Laundering Regulation, International Compliance and Non-Cooperative Countries. Eur J Law Econ 20, 17–30 (2005). https://doi.org/10.1007/s10657-005-1012-2

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  • DOI: https://doi.org/10.1007/s10657-005-1012-2

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