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.
“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.
“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.
“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.
© 2020 AFP
Biden cares more about the well-being of Trump supporters than Trump himself: MSNBC’s Joy Reid
On MSNBC Wednesday, anchor Joy Reid broke down how Joe Biden has more concern for the health and safety of President Donald Trump's voters than the president does himself.
"There are now just six days left for America to decide who will lead our country for the next four years," said Reid. "Now at a breaking point and desperate for progress on the economy, race relations, and a coronavirus crisis that has taken more than 228,000 lives and infected millions more. In the face of these numbers, Trump continues to utilize his favorite form of gaslighting, which is lying through his teeth on the COVID surge, even getting the so-called White House Science Office to say Trump ended the pandemic, as the nation hits record cases and hospitalizations."
Trump continues to ‘lie to us’ about COVID-19 ending — and his facts don’t add up: report
President Donald J. Trump joked Tuesday about the coronavirus pandemic that's plagued his own country, killing more than 227,000 Americans to date. And, as the death toll from coronavirus in America steadily climbs with every passing day, it has not stopped the 74-year-old commander-in-chief from proclaiming the nation is "rounding the turn."
According to the CDC, the seven-day average of new cases is nearly 70,000 -- a record number that is only expected to get worse. The COVID Tracking Project cites that more than 42,000 people are currently hospitalized with COVID-19, up from an estimated 30,000 one month ago.
WATCH: Supercut of proof of Donald Trump’s long-held racism
Supporters of President Donald J. Trump regularly defend the divisive president claiming he isn’t a racist — but he has a long history showing the contrary. On MSNBC's The Beat with Ari Melber Wednesday, the host shared a supercut of instances where President Donald J. Trump's racism was on full display.
"This year's a fundamental reckoning," Melber began. He later added, "So every voter must answer, 'Are you for or against this?" Melber asked before playing a clip that showed a pre-presidential Trump who sought to disprove then-Democratic candidate Barack Obama's American heritage.