Governance and the capital flight trap in Africa

Arbeitspapier

The study examines the use of governance tools to fight capital flight by reducing the capital flight trap. Two overarching policy syndromes are addressed in the study. It first assesses whether governance is an effective deterrent to the capital flight trap in Africa, before examining what thresholds of government quality are required to fight the capital flight trap in the continent. The following findings are established. Evidence of a capital flight trap is apparent because past values of capital flight have a positive effect on future values of capital flight. The net effects from interactions of the capital flight trap with political stability, regulation quality, economic governance and corruption-control on capital flight are positive. The critical masses at which "voice & accountability" and regulation quality can complement the capital flight trap to reduce capital flight are respectively, 0.120 and 0.680, which correspond to the best performing countries. Policy implications are discussed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: AGDI Working Paper ; No. WP/20/024

Classification and Topics

• Classification: Wirtschaft ; Econometric Modeling: General ; Fiscal Policy ; International Lending and Debt Problems ; Economywide Country Studies: Africa ; Socialist Systems and Transitional Economies: Legal Institutions; Illegal Behavior
• Subject: governance ; capital flight ; capital flight trap ; Africa

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Asongu, Simplice ; Nnanna, Joseph
• Event: Veröffentlichung
• (who): African Governance and Development Institute (AGDI)
• (where): Yaoundé
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/228002
• Last update: 10.03.2025, 11:44 AM CET