Each year, billions of dollars are stolen, laundered, and hidden from governments and communities from around the world through illicit financial flows (IFFs). These flows affect developed and developing countries alike, they contribute to the widening sustainable development financing gap, and they put the Sustainable Development Goals further beyond reach.
We know that IFFs occur within complex, transnational ecosystems. We also know that these systems consist of many interacting parts and typically involve myriads of transactions routed through layers of anonymous corporate entities domiciled in financial secrecy jurisdictions. However, efforts tackling IFFs often focus on a specific country, stakeholder or technical challenge. This offers useful in-depth insights, but risks missing the bigger picture.
At UNDP’s Global Policy Centre for Governance, we have therefore applied systems thinking to deepen our understanding of IFFs and to find ways to tackle them more holistically. This piece provides an overview of what we did, what we learned, and implications for efforts to address IFFs. I a nutshell, the insights call for fostering adaptive, collaborative, and ecosystem-based approaches that go beyond technical fixes and help transform the systems through which illicit wealth flows.
