International Monetary Fund. Communications Department
This issue of Finance & Development focuses on dark web of secret transactions that enable tax evasion and avoidance, money laundering, illicit financial flows, and corruption. Demands on government resources are building—to boost growth in some advanced economies, build infrastructure in emerging markets, and improve health and education in the developing world. IMF research shows that countries with lower levels of perceived corruption have significantly less waste in public projects. Among low-income countries, the share of the budget dedicated to education and health is one-third lower in more corrupt countries. The rise of digital finance, crypto assets, and cybercrime adds to the challenges. Consider the so-called dark web, a hidden marketplace for everything from stolen identities to arms and narcotics. Improving governance is not easy; it requires sustained effort over the long term.
Amine Hammadi, Marshall Mills, Nelson Sobrinho, Mr. Vimal V Thakoor, and Ricardo Velloso
Countries in Sub-Saharan Africa (SSA) tend to lag those in most other regions in terms of
governance and perceptions of corruption. Weak governance undermines economic
performance through various channels, including deficiencies in government functions and
distortions to economic incentives. It thus stands to reason that SSA countries could
strengthen their economic performance by improving governance and reducing corruption.
This paper estimates that strengthening governance and mitigating corruption in the region
could be associated with large growth dividends in the long run. While the process would
take considerable time and effort, moving the average SSA country governance level to the
global average could increase the region’s GDP per capita growth by about 1-2 percentage
International Monetary Fund. Middle East and Central Asia Dept.
First Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Pakistan