THE AMOUNT OF WEALTH
stashed in oshore ta x havens
has big implications for inequalit y. Why? Unless you
can account for hidden riches, it’s dicult to know
how wide the disparities in wea lth really are. So econ-
omists led by Berkeley’s Gabriel Zucman decided to
nd out who owns the wealth in ta x havens.
ey estimated total o shore wealth at about
10 percent of world GDP in 2007, or $5.6 trillion.
About half was kept in Switz erland, the world’s
premier oshore banking center since the 1920s.
Conveniently, the central bank of Switzerland
publishes c ountry-by-cou ntry brea kdowns of
oshore wealth in the nation’s banks.
But what about other tax havens? In 2016,
the Bank for International Set tlements started
to release data on the origin of bank deposits
held in oshore banking centers li ke Jersey and
Luxembourg. at made it possible to see how
much money residents of Germany, for example,
held in accounts in Hong Kong SAR . Zucman
and his collaborators used t he two data sources
to estimate the ratio of oshore wea lth to GDP
by cou ntr y.
e gures var y dramatica lly, from just a small
percentage of GDP in Scandinav ia to as much as
60 percent in Russia, the Gul f states, and Latin
America. Interesting ly, they found connections
between oshore wealth a nd the presence of natural
resources, a history of politica l instability, and prox-
imity to Switzerla nd.
Other data—including a leak of condential
records from the Swiss subsidiar y of HSBC in
2007—suggest that the distribution of oshore
wealth is heavily ske wed toward the rich: about 80
percent belongs to the top 0.1 percent of house-
holds. e conclu sion: accounting for oshore
assets substa ntially bo osts the wealth share of the
very richest people. In other words, inequalit y may
be far greater tha n other studies have found.
Prepared by F&D’s
, based on
“Who Owns the Wealth in Tax Havens? Macro Evidence and
Implications for Global Inequality,” by Annette Altstadsaeter, Niels
Johannesen, and Gabriel Zucman, published in September 2017
by the National Bureau of Economic Research. See https://www.
Counting wealth in offshore tax havens boosts estimates of inequality
Other European tax havens
2001 03 05 07 09 11 13 15
American tax havens
Note: American oshore centers = Cayman Islands, Panama, United States;
Asian oshore centers = Bahrain, Hong Kong SAR, Macao SAR, Malaysia,
Singapore as well as The Bahamas, Bermuda, and Netherland Antilles; other
European centers = Austria, Belgium, Cyprus, Guernsey, Jersey, Isle of Man,
Luxembourg, United Kingdom.
Switzerland’s share of oﬀshore bank deposits has been declining since the global
ﬁnancial crisis of 2008–09, while those of Asian oﬀshore centers have been rising.
(percent of the wealth held in all tax havens)
In Scandinavia and Europe, the wealth of the top 0.01 percent has returned to the levels
of the 1950s. In contrast, wealth is much more concentrated in the United States, where
the share of the top 0.01 percent has surpassed levels of the early 20th century.
(top 0.01 percent wealth share, including offshore wealth)
1910 30 50 70 90 2010
Note: Europe is the arithmetic average of France, Spain, and the United
Kingdom; Scandinavia is the average of Denmark, Norway, and Sweden. Each
square represents a decennial average: 1910 denotes the average of 1900, 1901,
. . . , 1909; 2000 denotes the average of 2000, 2001, . . . , 2009.
46 FINANCE & DEVELOPMENT | September 2019