By Vaclav Prusa

Liberia’s mining sector accounts for a significant amount of its GDP, but its economic potential is undermined by bribery and political interference in licensing and the granting of concession agreements. While data on illicit financial flows (IFFs) derived from or enabled by corruption is limited, bribery cases involving foreign companies, the prevalence of trade mispricing and existence of a professional enabler industry, suggest vulnerabilities. Corruption and IFFs in the sector create fiscal losses, lead to environmental degradation and foster instability. Best practices for mitigation include robust legal frameworks, enhanced transparency and accountancy mechanisms, greater regional collaboration and community engagement.

Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen InstituteU4 HELPDESK ANSWER 10 2025. 30p.

By Mathias Bak and Matthew Jenkins

Illicit financial flows (IFFs) undermine economic growth by weakening institutional quality, state legitimacy, facilitating corruption and discouraging foreign and domestic investment. Empirical studies that have explicitly assessed the links between IFFs and economic growth, either on a regional scale or at the national level, generally find that illicit financial outflows have a negative and significant impact on core determinants of economic growth, notably domestic investment. Evidence suggests that IFFs not only hinder growth in source countries but also distort investment patterns in destination countries, particularly in real estate markets.

Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2025: 2. 44p.

By Rodrigo R. Soares and Danilo Souza

We document that oil-producing areas of Brazil experienced increases in crime during the period of increased economic growth driven by the 2000s oil boom. This challenges the understanding that the impact of income shocks on crime is driven primarily by the legal status of the market in question. Offshore oil production, refining, and distribution in Brazil are concentrated in large firms, without scope for income contestability. We show that various equilibrium effects of the shock – such as increased inequality, urbanization, illegal goods presence, and deterioration in public goods provision – are likely to have contributed to the increase in crime.

Bonn: IZA – Institute of Labor Economics, 2023. 47p.