U4 Anti-Corruption Resource Centre

This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.

Query

What evidence exists on the issue of illegal cross-border flows of funds, goods and services in South Asia (Pakistan, India, Nepal and Bangladesh) and their impact on corruption? Please provide specific case studies of these processes in action.

Purpose

We are considering funding a programme to address bad governance in South Asia. Anecdotal evidence suggests illegal cross-border activities that feed corruption are a major problem. We are asking this question in an attempt to understand how empirical research supports this.

Content

1. Illegal cross border flows and corruption
2. Linkages between corruption and cross-border illicit flows
3. Conclusion
4. References

Summary

The illegal flow of funds, goods and services, and people within and across borders plagues numerous countries and regions in the world. In Asia, the borders that Bangladesh, India, Nepal and Pakistan share with each other and neighbours have exposed them to these movements and the challenges that they bring. Among these challenges is corruption, which can be both the result of and facilitator of illicit flows.

Illicit cross-border flows, also referred to as illegal flows, involve a network of actors and different countries. They also tend to overlap, meaning that the same groups that are smuggling drugs also tend to be the ones controlling arms and human trafficking. These networks also are often transnational, linking up local actors with a much broader web of players in other regions.

Global evidence from other regions, such as Africa and the Caucuses, suggests that these networks take advantage of existing weak governance and corruption in a country to establish their operations. At the same time, by bringing the country into their network, corruption is worsened as it becomes the medium for ensuring the movement of illicit flows.

To address and combat illegal cross-border flows, cross-country cooperation and coordination is needed to prevent, detect and sanction the corruption that contributes to the problem. Efforts have to look at specific interventions that can strengthen borders as well as broader governance issues that can help to build the transparency, accountability and integrity of institutions and key actors.

Authors

Craig Fagan, Transparency International, cfagan@transparency.org

Date

28/04/2011

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