draining development.pdf - Khazar University

15Policy and Research Implicationsof Illicit FlowsPeter ReuterDomestic resource mobilization lies at the heart of development. Illicitfinancial outflows drain development resources.— Task Force on the Development Impact of Illicit Financial Flows 1IntroductionThe preceding chapters cover a wide range of topics (criminal markets,trade flows, the foundations of state legitimacy, internal firm pricing, andtax collection) and a moderately broad range of methods (accounting,criminology, economics, political theory, and law). This reflects the realitythat illicit flows, like most interesting policy phenomena, touch manydomains and require a variety of approaches to aid understanding.In the face of such diversity, this concluding essay makes no claim tocomprehensiveness. It offers observations on four matters. First, is ituseful to focus policy attention on illicit flows, given that they representa consequence of more fundamental and troubling problems (corruption,tax evasion, criminal markets, and so on)? Second, are illegal marketslikely to be an important source of such flows? Third, what can beconcluded from the existing estimates, given the lack of any systematic483