New brief highlights who really makes the rules on illicit flows
February 23rd, 2017
It is prevailing wisdom that a country’s head of state, minister of finance, or other elected officials would be the ones setting the rules of its financial system. Taxation, finance and monetary systems are cited as the quintessential “sovereign” issues, where a state exercises full control. But this is not always the case. While national-level leaders certainly play a role, there are dozens of global institutions setting standards and writing rules. Elected officials may have little to no say in these standards, but they are often obliged to follow them. These decision-making bodies wield significant influence over the international financial system, but most people have never even heard of them.
Who Makes the Rules on Illicit Financial Flows is a new brief aimed at dissecting six of the most overlooked, yet powerful, financial institutions setting standards on tax and transparency. The brief introduces these institutions, which are generally unknown to the public despite their power in setting global norms. The piece concludes with options to make these bodies more inclusive so that global norms and standards are developed with all countries in mind, rather than just those at the decision making table.