Quantcast
Connect with us

World Bank aid ‘leakage’ may flow to tax havens: study

Published

on

World Bank aid payments to the neediest countries appear to trigger money flows to offshore bank accounts, suggesting funds are siphoned off from the nations they are meant to help, according to a study published Tuesday.

Data showed these aid payments are mirrored by rising deposits in tax havens such as Switzerland, Luxembourg, Cayman Islands and Singapore, with no increase in non-haven countries, according to the report issued by the World Bank.

ADVERTISEMENT

“We document that aid disbursements to the most aid-dependent countries coincide with significant increases in deposits held in offshore financial centers known for bank secrecy and private wealth management,” the authors said.

“Our estimates suggest a leakage rate of around 7.5 percent for the average highly aid-dependent country,” the study concluded.

The report, which looked at 22 of the most aid-dependent countries — mostly in Africa — compared data on aid disbursements from the World Bank with foreign deposits from the Bank for International Settlements (BIS).

The study created a bit of an uproar after The Economist last week alleged the bank was suppressing the report, and implied that may have been behind the early departure of chief economist Penny Goldberg, who announced this month she would return to academia.

The World Bank defended its support of independent research, including studies of corruption, and indicated the delay in publishing was simply due to the review process.

ADVERTISEMENT

“The draft paper, ‘Elite Capture of Foreign Aid’ underwent several reviews, and it was improved as a result,” the Bank said in a statement. “The revised paper, now published as a World Bank Working Paper addresses a number of comments raised during the review process.”

The statement did not specify what changes were made, but an earlier draft of the study concluded that aid payments “cause” increased deposits in offshore accounts, but that was changed in the final version to say “coincide with.”

While the study said other explanations for the aid leakage were possible, it ruled out most options.

ADVERTISEMENT

“Aid capture by ruling politicians, bureaucrats and their cronies is consistent with the totality of observed patterns,” it said, adding that the effects “are larger for more corrupt countries.”

The study was written by Jorgen Juel Andersen of BI Norwegian Business School, Niels Johannesen of the University of Copenhagen, and Bob Rijkers of The World Bank.

ADVERTISEMENT


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

Trump’s attacks on Biden’s mental fitness just draw attention to his own problems: Joy Reid panel

Published

on

MSNBC host Joy Reid gave some helpful advice to President Donald Trump and his children, who frequently attack former Vice President Joe Biden for his mental health: It makes you look worse.

Speaking to her closing Wednesday panel with Jason Johnson and Howard Fineman, Reid showed a super-cut of Trump's knack for getting words wrong, not knowing how to pronounce simple things, slurring his words, stumbling down the stairs, not knowing where to go, dragging his feet and more.

"Well, you know, my pretext for all my students this fall will be: person, woman, man, camera, tv, and if they can do that, I know they're at least as smart as the president," joked Johnson. "Here's the thing. Joe Biden demonstrated that he literally can ride a bike and do something else at the same time. Like, I have always thought the argument that Joe Biden has lost a step or has some sort of mental deficiency was a complete lie. It's Republicans just projecting. What's important to remember is that no matter how much they spout this nonsense, every single time Donald Trump opens his mouth, he looks worse. There is nothing Joe Biden can say that is more foolish or incoherent than Donald Trump in the middle of a substantive interview."

Continue Reading

Breaking Banner

Here’s how Trump’s ‘nasty’ jab at Kamala reveals his misunderstanding of women

Published

on

President Donald Trump has reprised one of his most common attacks on women — "nasty" — to describe Joe Biden's running mate, Sen. Kamala Harris (D-CA).

On Wednesday, writing for The New York Times, Katie Rogers broke down how the president's continual attacks on women in politics — combined with his characterization of women voters — reveals a fundamental misunderstanding of modern gender norms.

Continue Reading
 

Breaking Banner

Congresswoman criticizes Republican press guy for claim Black folks don’t care about Kamala Harris: Does he know any?

Published

on

Rep. Karen Bass (D-CA) hilariously mocked former press secretary Ari Fleischer, who worked for former President George W. Bush's White House. Fleischer claimed Black people won't be that excited about Sen. Kamala Harris on the ticket.

"She's just not that historically exciting to African-Americans," said Fleischer speaking to Laura Ingraham during a Fox News appearance after the announcement.

During a conversation with MSNBC's Joy Reid, the host called Fleischer "a sort of a bygone era Republican voice" and asked Bass to listen to his comments.

"I wonder how many African-Americans," asked Bass, chuckling.

Continue Reading
 
 
You need honest news coverage. Help us deliver it. Join Raw Story Investigates for $1. Go ad-free.
close-image