Corruption, which was identified as a cross-cutting theme in the Institute’s program of work for 2013, is not only a problem in its own right but also part of the “larger” issue of illicit financial flows (IFFs). Simply put, IFFs deprive governments in both developed and developing countries of resources that might otherwise be invested in public goods such as health, agriculture, infrastructure, and education. IFFs concern both illicit money and in- and outflows of money, and corruption is both their cause and consequence. Corruption often “generates” the illicit money, which also can stem from fraud or trafficking of persons, drugs, weapons, or other illegal goods. In addition, abuse of entrusted power for private gain - as corruption is commonly defined - often lures in in- and outflows of money – for instance, when illegal money is laundered to leave via the regular financial system or when local authorities negotiate tax concessions and incentives for (foreign) investment for states, companies, or individuals.
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