Fighting corruption is an inherently complex challenge that requires transnational action. The stakes are high: Initiatives such as the Summit for Democracy and the United States Agency for International Development’s Combating Transnational Corruption Grand Challenge have underscored that multistakeholder efforts to combat corruption are a key pillar of advancing democratic renewal globally. Illicit financial flows (IFFs), defined as “illegal movements of money or capital from one country to another,” serve as a case in point. IFFs around the world facilitate corruption, deepen inequality, reduce economic security, and exacerbate environmental degradation. In low- and middle-income countries especially (but not exclusively), the consequences are particularly profound since IFFs lead to a “loss of what are often desperately needed resources to fund public initiatives or critical investments.”
Of course, no economy can tackle this problem alone: The globalized nature of financial systems means that solutions to IFFs require extensive cooperation across country lines and jurisdictions. In this piece, we examine key challenges associated with and recommendations to address IFFs from the production and trade of gold from Venezuela, which exemplifies many of the challenges associated with IFFs broadly.