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on Informal and Underground Economics |
| By: | Kohnert, Dirk |
| Abstract: | Sub-Saharan Africa (SSA) accounts for a third of the countries on the Financial Action Task Force (FATF) grey list. In the Money Laundering and Terrorist Financing (ML/TF) Ranking and Risk Assessment Tool, the region performed poorly in terms of resilience to ML/TF, with more than 60% of countries falling into the high-risk category. Although countries on the grey list are not subject to sanctions, inclusion on the list has a significant impact on their economies. This includes a significant reduction in capital inflows and foreign direct investment. The four main sources of illicit financial flows from SSA, South Africa, the Democratic Republic of Congo, Ethiopia and Nigeria, accounted for more than 50% of total illicit financial flows. While SSA received nearly $2 trillion in foreign direct investment (FDI) and official development assistance (ODA) between 1980 and 2018, it issued over $1 trillion in illicit financial flows. These illicitly acquired funds and diverted from the region continue to pose a development challenge. Illicit financial flows increased overall, but not concerning trade. In the 38 years from 1980 to 2018, they increased significantly in the 2000s, in parallel with the growth of African trade. Emerging and developing countries in Asia and the Middle East have become key targets. Previous initiatives to curb money laundering and improve the exchange of tax information between countries have largely failed, including the three most important: the Financial Action Task Force (founded in 1998), the Global Forum on Transparency and Exchange of Information for Tax Purposes (founded in 2009) and the Inclusive Framework on Base Erosion and Profit Shifting (founded in 2016). First, African countries lack the resources and capacity to address illicit financial flows. Second, many advanced economies are not sufficiently engaged in these initiatives. However, the repatriation of illegal funds is an important tool for strengthening the resource base of African countries. In 2020, for example, the United States and the self-governing British Crown Dependency of Jersey, one of the world's most notorious tax and money laundering havens, reached an agreement with Nigeria to repatriate more than $300 million stolen by Nigeria's former military dictator General Sani Abacha. |
| Abstract: | Subsahara-Afrika (SSA) macht ein Drittel der Länder auf der grauen Liste der Financial Action Task Force (FATF) aus. Im Ranking und Risikobewertungstool für Geldwäsche und Terrorismusfinanzierung (ML/TF) schnitt die Region in Bezug auf die Widerstandsfähigkeit gegenüber ML/TF schlecht ab, wobei mehr als 60 % der Länder in die Hochrisikokategorie fielen. Obwohl Länder auf der grauen Liste keinen Sanktionen unterliegen, hat die Aufnahme in die Liste erhebliche Auswirkungen auf ihre Wirtschaft. Dazu gehört eine deutliche Reduzierung der Kapitalzuflüsse und ausländischen Direktinvestitionen. Auf die vier Hauptquellen illegaler Finanzströme aus SSA, Südafrika, die Demokratische Republik Kongo, Äthiopien und Nigeria, entfielen mehr als 50 % der gesamten illegalen Finanzströme. Während SSA zwischen 1980 und 2018 fast 2 Billionen US-Dollar an ausländischen Direktinvestitionen (FDI) und offizieller Entwicklungshilfe (ODA) erhielt, emittierte es über 1 Billion US-Dollar an illegalen Finanzströmen. Diese unrechtmäßig erworbenen und aus der Region abgeleiteten Gelder stellen weiterhin eine Entwicklungsherausforderung dar. Die illegalen Finanzströme nahmen insgesamt zwar zu, nicht jedoch im Verhältnis zum Handel. In den 38 Jahren von 1980 bis 2018 stiegen sie in den 2000er Jahren deutlich an, parallel zum Wachstum des afrikanischen Handels. Schwellen- und Entwicklungsländer in Asien und im Nahen Osten sind zu Hauptzielen geworden. Die bisherigen Initiativen zur Eindämmung der Geldwäsche und zur Verbesserung des Austauschs von Steuerinformationen zwischen Ländern sind weitgehend gescheitert, darunter die drei wichtigsten: die Financial Action Task Force (gegründet 1998), das Global Forum on Transparency and Exchange of Information for Tax Purposes (gegründet 2009) und das Inclusive Framework on Base Erosion and Profit Shifting (gegründet 2016). Erstens mangelt es den afrikanischen Ländern an Ressourcen und Kapazitäten, um gegen illegale Finanzströme vorzugehen. Zweitens engagieren sich viele fortgeschrittene Volkswirtschaften nicht ausreichend in diesen Initiativen. Allerdings ist die Rückführung illegaler Gelder ein wichtiges Instrument zur Stärkung der Ressourcenbasis afrikanischer Länder. Im Jahr 2020 einigten sich beispielsweise die Vereinigten Staaten und das selbstverwaltete britische Krongebiet Jersey, eines der berüchtigtsten Steuer- und Geldwäscheparadiese der Welt, mit Nigeria auf die Rückführung von mehr als 300 Millionen US-Dollar, die vom ehemaligen nigerianischen Militärdiktator General Sani Abacha gestohlen worden waren. |
| Keywords: | Money laundering, Embezzlement, Corruption, tax evasion, Terrorism financing, Informal economy, Sub-Saharan Africa |
| JEL: | D23 D25 D53 D63 D74 E21 F35 G28 O17 Z13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:300868 |
| By: | Dinara Alpysbayeva; Annette Alstadsæter; Wojciech Kopczuk; Simen Markussen; Oddbjorn Raaum |
| Abstract: | We analyze the reporting response to an ambitiously targeted government support scheme for Norwegian businesses at the very start of the Coronavirus crisis in 2020. Our empirical design is based on cross-checking self-reported data in the applications for support with administratively reported data used for VAT. We find strong evidence that strategic misreporting was present but conclude that its remaining quantitative extent after enforcement actions already taken by the tax authorities was relatively small. Firms tend to misreport 4 percent more often than expected, and the actual support paid out was 5 percent higher than it should have been. We discuss possible reasons for the relatively limited extent of non-compliance and more general lessons for the design of transfer programs |
| JEL: | H25 H26 H83 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32801 |
| By: | Thomas Dohmen; Melanie Khamis; Hartmut Lehmann; Norberto Pignatti |
| Abstract: | Using data from the four waves of the Ukrainian Longitudinal Monitoring Survey - ULMS (2003, 2004, 2007 and 2012), we analyze whether workers with a higher willingness to take risks are more likely to select into informal employment contracts. The data permit us to distinguish between five employment states: formal and informal self-employment, formal salaried employment, voluntary informal salaried employment, and involuntary informal salaried employment. The empirical evidence reveals risk attitudes as a strong causal determinant of the incidence of all types of informal employment but involuntary informal salaried employment. We also provide evidence that our results are not driven by reverse causality: risk attitudes impact on the choice of employment state whilst this latter does not influence risk attitudes. Linking risk attitudes with selection into employment states, we also can establish that along the formal-informal divide the Ukrainian labor market is predominantly segmented for salaried workers whilst it is integrated for the self-employed. |
| Keywords: | Risk attitudes, informal employment, labor market segmentation, Ukraine |
| JEL: | D91 J42 J46 P23 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_588 |
| By: | Silvia Domit; Damla Kesimal |
| Abstract: | Despite recent improvements, Türkiye’s low female labor force participation and high share of informal female workers stand out internationally. Closing these gender gaps would boost medium-term growth and make it more inclusive. This paper puts these gaps in an international context, explores their interlinkages with fiscal policies, and identifies policy priorities. |
| Keywords: | Türkiye; gender gaps; female labor force participation; informality; tax policy; expenditure policy; gender budgeting |
| Date: | 2024–08–09 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/171 |
| By: | Katharine G. Abraham; John C. Haltiwanger; Claire Y. Hou; Kristin Sandusky; James Spletzer |
| Abstract: | Using rich administrative tax data, we explore the effects of the introduction of online ridesharing platforms on entry, employment and earnings in the Taxi and Limousine Services industry. Ridesharing dramatically increased the pace of entry of workers into the industry. New entrants were more likely to be young, female, White and U.S. born, and to combine earnings from ridesharing with wage and salary earnings. Displaced workers have found ridesharing to be a substantially more attractive fallback option than driving a taxi. Ridesharing also affected the incumbent taxi driver workforce. The exit rates of low-earning taxi drivers increased following the introduction of ridesharing in their city; exit rates of high-earning taxi drivers were little affected. In cities without regulations limiting the size of the taxi fleet, both groups of drivers experienced earnings losses following the introduction of ridesharing. These losses were ameliorated or absent in more heavily regulated markets. |
| JEL: | J20 J30 J40 J62 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32766 |
| By: | Ozili, Peterson K |
| Abstract: | Using six widely accepted indicators, this study compares the progress made in financial inclusion in Nigeria, Sub-Saharan Africa and the rest of the World, with a view to deducing lessons that each entity can improve upon. We find that Nigeria outperformed sub-Saharan Africa in three indicators of financial inclusion while sub-Saharan Africa did better than Nigeria in one metric. Nigeria and sub-Saharan Africa exceeded the World average in informal borrowings. We also constructed an index of financial inclusion and found that financial institution account ownership, formal borrowing, informal borrowing and debit or card ownership are significant positive determinants of the financial inclusion index. These findings indicate that policymakers in Nigeria and sub-Saharan Africa have significant room for improving their financial inclusion standings towards the global average. We make recommendations on the aspects where policymakers can place their focus in pursuit of this goal. |
| Keywords: | financial inclusion, Nigeria, Sub-Saharan Africa, digital financial inclusion |
| JEL: | G00 G20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121527 |
| By: | Nguyen, T.H.N.; Dang, C.D.; Nguyen, P.L.; Nguyen, M.D. |
| Abstract: | Diversification of rural livelihood through the development of non-farm activities is one of important policies for holistic rural development in Vietnam. However, non-farm households in general and pottery households in particular have faced with capital shortage in production process. One of reasons for their capital limitation is difficulties in formal credit access. This paper aimed to identify factors that influence pottery households’ access to formal credit in Bat Trang village, Hanoi city. By using Yamane’s formula, sample size of 167 households was determined. Descriptive statistics and Probit regression model were applied in quantitative data analysis. The results showed that households’ credit access was influenced by factors including age, educational level, collateral value asset, and return from ceramic production after tax. This study recommended that policy makers should implement a specific credit support for non-farm households in rural areas. In addition, commercial banks should loose credit requirements on collateral value assets in order to help rural non-farm households to access to formal credit, particularly banking loan. |
| Keywords: | Agricultural Finance, Consumer/Household Economics |
| Date: | 2024–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:ags:asea24:344449 |
| By: | Kohnert, Dirk |
| Abstract: | L’Afrique subsaharienne (ASS) représente un tiers des pays figurant sur la liste grise du Groupe d’action financière (GAFI). Dans l’outil de classement et d’évaluation des risques du blanchiment d’argent et du financement du terrorisme (BC/FT), la région a obtenu de mauvais résultats en termes de résilience au BC/FT, avec plus de 60 % des pays entrant dans la catégorie à haut risque. Bien que les pays figurant sur la liste grise ne soient pas soumis à des sanctions, leur inscription sur la liste a un impact substantiel sur leur économie. Cela comprend une réduction significative des entrées de capitaux et des investissements directs étrangers. Les quatre principales sources de flux financiers illicites en provenance d’Afrique subsaharienne, d’Afrique du Sud, de République démocratique du Congo, d’Éthiopie et du Nigeria, représentaient plus de 50 % du total des flux financiers illicites. Alors que l’ASS a reçu près de 2 000 milliards de dollars d’investissements directs étrangers (IDE) et d’aide publique au développement (APD) entre 1980 et 2018, elle a émis plus de 1 000 milliards de dollars de flux financiers illicites. Ces fonds acquis illégalement et détournés de la région continuent de poser un défi au développement. Les flux financiers illicites ont globalement augmenté, mais pas en ce qui concerne le pourcentage de commerce. Au cours des 38 années allant de 1980 à 2018, ils ont considérablement augmenté dans les années 2000, parallèlement à la croissance du commerce africain. Les pays émergents et en développement d’Asie et du Moyen-Orient sont devenus des cibles privilégiées. Les initiatives précédentes visant à lutter contre le blanchiment d'argent et à améliorer l'échange d'informations fiscales entre les pays ont largement échoué, y compris les trois plus importantes : le Groupe d'action financière (fondé en 1998), le Forum mondial sur la transparence et l'échange d'informations à des fins fiscales (fondé en 2009) et le Cadre inclusif sur l'érosion de la base d'imposition et le transfert de bénéfices (fondé en 2016). Premièrement, les pays africains manquent de ressources et de capacités pour lutter contre les flux financiers illicites. Deuxièmement, de nombreuses économies avancées ne sont pas suffisamment engagées dans ces initiatives. Cependant, le rapatriement des fonds illégaux constitue un outil important pour renforcer la base de ressources des pays africains. En 2020, par exemple, les États-Unis et la dépendance autonome de la Couronne britannique de Jersey, l'un des paradis fiscaux et de blanchiment d'argent les plus notoires au monde, ont conclu un accord avec le Nigeria pour rapatrier plus de 300 millions de dollars volés par l'ancien dictateur militaire du Nigeria, Sani Abacha. |
| Abstract: | Sub-Saharan Africa (SSA) accounts for a third of the countries on the Financial Action Task Force (FATF) grey list. In the Money Laundering and Terrorist Financing (ML/TF) Ranking and Risk Assessment Tool, the region performed poorly in terms of resilience to ML/TF, with more than 60% of countries falling into the high-risk category. Although countries on the grey list are not subject to sanctions, inclusion on the list has a significant impact on their economies. This includes a significant reduction in capital inflows and foreign direct investment. The four main sources of illicit financial flows from SSA, South Africa, the Democratic Republic of Congo, Ethiopia and Nigeria, accounted for more than 50% of total illicit financial flows. While SSA received nearly $2 trillion in foreign direct investment (FDI) and official development assistance (ODA) between 1980 and 2018, it issued over $1 trillion in illicit financial flows. These illicitly acquired funds and diverted from the region continue to pose a development challenge. Illicit financial flows increased overall, but not concerning trade. In the 38 years from 1980 to 2018, they increased significantly in the 2000s, in parallel with the growth of African trade. Emerging and developing countries in Asia and the Middle East have become key targets. Previous initiatives to curb money laundering and improve the exchange of tax information between countries have largely failed, including the three most important: the Financial Action Task Force (founded in 1998), the Global Forum on Transparency and Exchange of Information for Tax Purposes (founded in 2009) and the Inclusive Framework on Base Erosion and Profit Shifting (founded in 2016). First, African countries lack the resources and capacity to address illicit financial flows. Second, many advanced economies are not sufficiently engaged in these initiatives. However, the repatriation of illegal funds is an important tool for strengthening the resource base of African countries. In 2020, for example, the United States and the self-governing British Crown Dependency of Jersey, one of the world's most notorious tax and money laundering havens, reached an agreement with Nigeria to repatriate more than $300 million stolen by Nigeria's former military dictator General Sani Abacha. |
| Keywords: | Blanc himent d'argent, détournement de fond, corruption, évasion fiscale |
| JEL: | D23 D25 D53 D63 D74 E21 O17 Z13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:300874 |