Financial Transparency Coalition

Guinea is the world’s largest producer of the mineral Bauxite, which is the main source of aluminum. Guinea also possesses reserves of hydropower and solar power, and it exports other valuable minerals: it’s the world’s fifth largest producer of iron ore and it also produces gold and diamonds. Historically, however, Guinea has experienced tremendous difficulty in profiting from this potential. Correspondingly, Guinea has high rates of poverty, high inflation, and low levels of tax revenues. According to a joint study by Global Financial Integrity and the African Development Bank, Guinea lost about 10 percent of its GDP...

This blog post is the first post in a two-part series on the connection between extractive industries and corruption in developing countries. Natural resources, particularly fuels and ores, are often associated paradoxically with stagnant economic growth. More intuitively, natural resource wealth is also often associated with poorer governance, most notably corruption. Understanding why this is the case, however, is not necessarily intuitive. To that end, I’ll explore the correlational relationship between natural resource wealth and corruption in this post and show a model for examining these issues. Next week, I’ll use these theories to talk about some specific hypotheses explaining...

Stealing Africa, a documentary in the series Why Poverty that focuses on the case of the international mining giant Glencore in Zambia, is a must-watch for anyone concerned with domestic resource mobilization, global poverty, the resource curse, or illicit financial flows. These topics mesh together to one simple idea: money that should be staying in Africa's poorest nations is in fact fleeing at an astounding rate, and something needs to be done about it.

Africa and the rest of the developing world are often criticized for failing to effectively combat corruption. While many of these countries have a lot to do to get their domestic house in order, not enough attention is paid to the systemic global problems that make it very difficult for even a well-meaning, responsible African government to put a serious dent in illicit financial flows. Western financial secrecy and lax regulations make it very easy for elites in developing countries to squirrel away illicit money, far away from any tax authority.