Impact of illicit financial flows on infant vaccination coverage in developing countries.
Ortega-Aguaza, Bienvenido,Sanjuán-Solís, Jesús Carlos,Casquero-Tomás, Antonio
- Published
- 2017-10-09
- Language
- en
Abstract
Objectives This paper analysed the impact of illicit financial flows (IFFs) on the infant immunisation coverage rate as a first step in analysing the social costs of IFFs in developing countries. Background The liberalization of capital flows is generally associated with prospects of higher growth. However, in developing countries, opening the capital account may also facilitate the flow of capital out of the country through illicit financial flows (IFFs). Since 1980, developing countries have lost US$16.3 trillion dollars through broad leakages in the balance of payments, trade misinvoicing, and unrecorded financial transfers. Moreover, according to the Global Financial Integrity (GFI), illicit flows from the developing world increased steadily to reach US$1.1 trillion in 2013. Given that IFFs drain the scarce public resources available to finance the provision of public goods and services, the extent of illicit capital flows from developing countries is serious cause for concern. Data/Methods Data for 56 low- and middle-income countries for the period 2002-2013 have been employed. All data are open access (from GFI, World Health Organization and World Bank). Also, in order to analyse the impact of the relative size of IFFs on child vaccination coverage, as a baseline specification, a dynamic panel data model has been employed. Results/Expected Results The main result of the empirical analysis is that, as expected, the relative level of illicit financial flows negatively impacts vaccination coverage in the sample of countries considered. Specifically, the total effect of a year increase of 1 p.p. in the ratio of IFF to total trade is to reduce the level of vaccination coverage rate over the coming years by 0.1 p.p. Taking into account that the average annual number of infants in the countries analysed, over the sample period, was approximately 65.3 million, this result suggests that at least 65,300 children may not receive this basic health care intervention in the future as a consequence of the increase in the ratio of IFF to total trade in a particular year. Policy Implications The findings of this study offered evidence showing that, in developing countries, the existence of both sufficiently strong and stable financial institutions and an efficient legal system might be crucial in order to prevent the long-run negative effects of capital flows on the health conditions of populations.
Full text
Impact of illicit financial flows on infant vaccination coverage in developing countries Bienvenido Ortega ([email protected]) Jesús Sanjuán (jsanj[email protected]) Antonio Casquero (cas[email protected]) Universidad de Málaga. Andalucía Tech. 84th International Atlantic Economic Conference Montréal, Canada 5-8 October 2017
OBJECTIVE To analyse the impact of illicit financial flows (IFFs) on the infant immunisation coverage rate (Cov) as afirst step in analysing the social costs of this kind of capital flight in low-and middle-income countries. With this aim, the main hypothesis to be tested is: H1:there is anegative impact of the relative level of IFF on the combined coverage rate achieved in infant immunisation against measles, polio, and DPT in low-and middle-income countries.
WHAT ARE IFFs?
KEY VARIABLES 1. The infant immunisation coverage rate, calculated as a composite metric comprising the percentage of children less than 1 year who received measles, polio, and DPT immunisations in a given year. 2. The ratio of the IFFs to total trade, given that the amount of IFFs in a country is closely related to the amount of capital flight originating from trade (close to 80% of the total estimated annual outflows are moved offshore using trade misinvoicing).
DATABASE Data from 56 countries for the period 2002-2013 (672 observations)
IFFs: DESCRIPTIVE ANALYSIS Liberia Togo Nicaragua Costa Rica Suriname Zambia Honduras Paraguay Ethiopia Serbia Azerbaijan Georgia Malawi Venezuela Chad Armenia Kazakhstan Russian Federation Gambia Congo, Republic of Cote d'Ivoire Belarus Moldova Bangladesh Namibia El Salvador Lesotho Botswana Guatemala Madagascar Cambodia Burkina Faso Mexico Indonesia Cameroon Mali Philippines Bulgaria Panama India Ecuador Ukraine Peru China Argentina Morocco Brazil Dominican Republic Jamaica Tanzania Maldives Thailand Tunisia Romania Colombia Algeria 010 20 30 40 50 60 70 80 90 Ratio of IFF to total trade (%). Averages for the period 2002-2013.
IFFs: DESCRIPTIVE ANALYSIS Relationship between the share to total trade and the share to total IFFs. All countries in the sample. Averages for the period 2002-2013. Brazil China India Indonesia Malaysia Mexico Russian Federation Thailand 0 5 10 15 20 25 30 35 0 5 10 15 20 25 30 35 Share in total IFF (%) Share in total trade (%)
IFFs: DESCRIPTIVE ANALYSIS Algeria Argentina Azerbaijan Bangladesh Belarus Bulgaria Ukraine Colombia Costa Rica Cote dÍvoire Venezuela Dominican Rep. Ecuador Guatemala Honduras Kazakhstan Morocco OBulgariaman Panama Paraguay Peru Philippinnes Romania Serbia Tunisia 0,0 0,5 1,0 1,5 2,0 2,5 0,0 0,5 1,0 1,5 2,0 2,5 Share in total IFF (%) Share in total trade (%) Relationship between the share to total trade and the share to total IFFs. All countries in the sample excluding those indicated before. Averages for the period 2002-2013.
IFFs: DESCRIPTIVE ANALYSIS Relationship between the share to total trade and the share to total IFFs. All countries in the sample excluding those indicated before. Averages for the period 2002-2013. Armenia Botswana Burkina Faso Cambodia Cameroon Chad Congo, Rep. of Ethiopia Gambia Georgia El Salvador Jamaica Lesotho Madagascar Maldives Mali Moldova Namibia Nicaragua Suriname Tanzania Liberia Malawi Togo Zambia 0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35 0,40 0,45 0,50 0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35 0,40 0,45 0,50 Share in total IFF (%) Share in total trade (%)
Impact of illicit financial flows on infant vaccination coverage in developing countries Bienvenido Ortega ([email protected]) Jesús Sanjuán (jsanj[email protected]) Antonio Casquero (cas[email protected]) Universidad de Málaga. Andalucía Tech. 84th International Atlantic Economic Conference Montréal, Canada 5-8 October 2017