Illuminating Dark Corners

• Author: Gita Bhatt
• Position: Editor-in-chief
• Pages: 2-2

EDITOR'S LETTER

Illuminating

Dark Corners

THIS ISSUE OF Finance & Development reminds me of a Su parable. A

woman sees a mystic searc hing for something outside his door. “What

have you lost?” she asks. “My key,” he responds. So they both kneel down

to look for it. “Where exactly did you drop it?” she ask s. “In my house,”

he replies. “en why are you looking here?” “Becau se there is more light.”

e lesson: we all search for a nswers where it is easiest to look.

at is why we decided to shine a spotlight on the da rk web of secret

transactions t hat enable tax evasion and avoidance, money laundering,

illicit nancial ows, and corruption.

Consider these estimates: bribes to the tune of $1.5–$2 trillion change

hands every yea r. Tax evasion costs governments more than $3 trillion a

year, and countless more is lost through other il licit activities. is is money

that could go for health ca re, education, and infrast ructure for millions

worldwide. But the cost to society is far g reater: corruption distorts incen-

tives and undermines public trust in institutions. It is the root of many

economic injustices young men and women suer ever y day.

e best disinfectant is sunlight. Paolo Mauro and others explore how

countries can put in place accountable institutions, improve government

budget transparenc y, and exchange nancial in formation across borders.

Jay Purcell and Ivana Rossi propose ways to resolve the tension bet ween the

need for transparency a nd the right to privacy. And Aditi Kumar and Eric

Rosenbach argue for closer cooperation a mong law enforcement, nancial

institutions, and regulators.

ese hidden transactions are not one nation’s problem nor within one

nation’s power to resolve. Tackling the problem requires strong domestic

policies and cross-border collaboration. e payo wil l be myriad other

political, economic, and socia l benets, not least reducing inequality.

All the more reason to shed lig ht on the dark corners of the world economy.

GITA BHATT, editor-in-chief

ON THE COVER

Vast sums are diverted to tax shelters, corrupt officials, and criminal enterprises, but we

have only a vague notion of how this plays out. September’s cover features illustrator

John Cuneo’s take on the funneling of money to the global economy’s hidden corners.

2 FINANCE & DEVELOPMENT | September 2019

FINANCE & DEVELOPMENT

A Quarterly Publication of the

International Monetary Fund

EDITOR-IN-CHIEF:

Gita Bhatt

MANAGING EDITOR:

Maureen Burke

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Chris Wellisz

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