Russia: Illicit Financial Flows and the Role of the Underground Economy

84 Pages Posted: 4 Oct 2013

See all articles by Dev Kar

Dev Kar

Global Financial Integrity; International Monetary Fund

Sarah Freitas

Global Financial Integrity

Date Written: February 2, 2013

Abstract

This study presents estimates of various types of capital flows to and from post-Soviet Russia. We argue that while netting out is a valid concept related to licit flows, illicit flows in both directions should be added in order to assess their adverse impact on the economy. Simultaneous equation modeling shows that total illicit flows both drive and are driven by underground economic activities. The latter is used as a proxy for the state of overall governance in Russia, which continues to be a serious issue. We suggest a range of domestic and international policy measures to curtail the cross-border transmission of illicit financial flows to and from Russia.

Suggested Citation

Kar, Dev and Freitas, Sarah, Russia: Illicit Financial Flows and the Role of the Underground Economy (February 2, 2013). Available at SSRN: https://ssrn.com/abstract=2335008 or http://dx.doi.org/10.2139/ssrn.2335008

Dev Kar (Contact Author)

Global Financial Integrity ( email )

1319 18th St NW
Washington, DC 20036
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202-293-0740 (Phone)
202-293-1720 (Fax)

HOME PAGE: http://www.gfip.org

International Monetary Fund ( email )

Washington, DC
United States

Sarah Freitas

Global Financial Integrity ( email )

1319 18th St NW
Washington, DC 20036
United States

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