Beautiful Virgin Islands

Wednesday, Aug 27, 2025

IMF: Corruption draining up to $3 trillion a year from government revenues

IMF: Corruption draining up to $3 trillion a year from government revenues

The world is changing. The IMF is changing with it. The question, however, is not only how it needs to change if it is to remain relevant. It is also whether the political environment will allow it to remain relevant.

The IMF is built on a commitment to cooperation among member countries. That commitment is on the wane. But the countries of the world might rediscover its importance. If so, they will find the Fund an invaluable instrument. The IMF cannot ensure that outcome. But it can, and must, prepare for it. To its credit, it is doing so.

The world that surrounds the Fund has changed, or is changing, in several crucial respects.

Global GDP last year was $87 trillion, up from just $11 trillion in 1980. While GDP is just one among many measures of well-being, the improvement is remarkable. But before we start celebrating, consider these numbers, which point to the dark side of the global economy:

$7 trillion

That figure, equal to 8 percent of global GDP, represents the amount of private wealth estimated to be hidden in offshore financial centers, much of which likely comes from illicit activities.

$1 trillion

That's the gain in government revenue, by one calculation, that could be achieved by reducing corruption around the world by one-third.

These numbers shine a light on the hidden corners of the global economy, the money that escapes the reach of tax collectors, regulators, and law enforcement. These are the ill-gotten gains of graft, the proceeds of regulatory arbitrage, and the profits from tax domiciles that some consider to be the equivalent of tax evasion. Taken together, they detract from the public good. It is money lost that could be put to use improving people's lives.

The rise of digital finance, crypto assets, and cybercrime adds to the challenges. Consider the so-called dark web, a hidden marketplace for everything from stolen identities to arms and narcotics.

Illegal or legitimate, these practices have a big impact on government revenues around the world, and increasingly the international community is being called upon to eliminate the regulatory gray areas.

But it is not just a matter of law enforcement. Governments are being pressed to adjust to rapid changes in the global economy that-if properly handled-can bring considerable benefits. That is certainly the case with fintech and, potentially, crypto assets.

Demands on government resources are building-to boost growth in some advanced economies, build infrastructure in emerging markets, and improve health and education in the developing world. So the draining away of trillions of dollars represents a threat to our well-being. It contributes to a weakening of trust in government and undermines its ability to address key economic problems like inequality and poverty.

IMF research shows that countries with lower levels of perceived corruption have significantly less waste in public projects. And among low-income countries, the share of the budget dedicated to education and health is one-third lower in more corrupt countries. That reduces the effectiveness of social spending.

So how do we address these problems?

That's where the IMF aims to make a difference. We have worked closely with national authorities, multilateral bodies, and the private sector for nearly two decades to combat money laundering and the financing of terrorism. We have been at the forefront of the effort to strengthen fiscal transparency and, increasingly, to confront corruption.

It comes down to the core notion of governance-how a country defines and implements its economic policies in all their myriad detail and how it adheres to the rule of law. Last year, the IMF adopted a comprehensive framework for enhanced engagement on governance that encompasses the functions most relevant to the economy, things like tax collection, central banking, and financial sector oversight and market regulation.

Improving governance isn't easy; it requires sustained effort over the long term. It's not only the right thing to do, it also brings tangible benefits to millions of people. Joint action will help ensure success.

(The writer David Lipton is the acting managing director of the IMF).

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Spotify’s Strange Move: The Feature Nobody Asked For – Returns
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
A new faith called Robotheism claims artificial intelligence isn’t just smart but actually God itself
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
Nurse who raped woman continued working for a year despite police alert
Drought forces closures of England’s canal routes, canceling boat holidays
Sweet tooth scents: food-inspired perfumes surge as weight-loss drugs suppress appetites
Experts warn Britain dangerously reliant on imported food
Family of Notting Hill Carnival murder victim call event unmanageable
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
×