The Financial Secrecy Index: Shedding New Light on the Geography of Secrecy

32 Pages Posted: 27 Jun 2015

See all articles by Alex Cobham

Alex Cobham

Christian Aid

Petr Jansky

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies

Markus Meinzer

Tax Justice Network

Date Written: May 19, 2015

Abstract

Both academic research and public policy debate around tax havens and offshore finance typically suffer from a lack of definitional consistency. Unsurprisingly then, there is little agreement about which jurisdictions ought to be considered as tax havens — or which policy measures would result in their not being so considered. In this article we explore and make operational an alternative concept, that of a secrecy jurisdiction and present the findings of the resulting Financial Secrecy Index (FSI). The FSI ranks countries and jurisdictions according to their contribution to opacity in global financial flows, revealing a quite different geography of financial secrecy from the image of small island tax havens that may still dominate popular perceptions and some of the literature on offshore finance. Some major (secrecy-supplying) economies now come into focus. Instead of a binary division between tax havens and others, the results show a secrecy spectrum, on which all jurisdictions can be situated, and that adjustment for the scale of business is necessary in order to compare impact propensity. This approach has the potential to support more precise and granular research findings and policy recommendations.

Keywords: tax havens, offshore finance, illicit financial flows

JEL Classification: F36, F65

Suggested Citation

Cobham, Alex and Jansky, Petr and Meinzer, Markus, The Financial Secrecy Index: Shedding New Light on the Geography of Secrecy (May 19, 2015). Center for Global Development Working Paper No. 404. Available at SSRN: https://ssrn.com/abstract=2623152 or http://dx.doi.org/10.2139/ssrn.2623152

Alex Cobham (Contact Author)

Christian Aid ( email )

United Kingdom

Petr Jansky

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies ( email )

Opletalova St. 26
Prague, 11000
Czech Republic

HOME PAGE: http://ies.fsv.cuni.cz/en/staff/jansky

Markus Meinzer

Tax Justice Network ( email )

38, Stanley Avenue
Chesham, HP5 2JG
United Kingdom

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