draining development.pdf - Khazar University

9Accounting for theMissing BillionsRichard MurphyAbstractThis chapter considers, first, whether substantial transfer mispricing bymajor corporations that contributes to a loss of at least US$160 billion ayear to developing countries is plausible in the context of total likelycorporate profits earned worldwide in a year. 1Second, it tests whether corporate activities in developing countriesand in the extractive industries in particular might be especially prone tothis abuse.Third, it considers whether this sum could be hidden from viewwithin the accounts or financial statements of the multinational corporations(MNCs) that might be perpetrating the mispricing.Fourth, it explores the possibility that the MNCs might use secrecyjurisdictions to assist in hiding these transactions from view.Some of the data used in this chapter have been researched for the Mapping the FaultlinesProject of the Tax Justice Network (TJN), financed by the Ford Foundation, the resultsof which are being published at http://www.secrecyjurisdictions.com/. The author isresearch director of that project.Additional tables and figures from this chapter can be found at http://go.worldbank.org/N2HMRB4G20.265