and Economic Governance for Inclusive, Accountable and Effective Governance Systems
A lack of financial integrity – corruption, illicit financial flows, money laundering, embezzlement, opacity and more – is prevalent at all levels of financial and economic governance systems. It represents not only a severe drain on development financing, but is also a driver of mistrust, inequality and abuse of power. In addition, it impacts severely on public service delivery and creates significant obstacles to leaving no one behind.
At the global level, a shadow financial system allows for the obscuring of accountability and ownership, of tax rights and duties and hides crime and conflict-fueling finances. At the moment, the lack of financial integrity in the global system allows for billions of dollars in illicit financial flows out of developing contexts, effectively cancelling out other development finance and efforts. It can potentially create a regulatory race to the bottom and contribute to persistent fiscal balancing challenges.
At national and local levels, corrupt and opaque systems create high-risk conditions for large scale corruption and financial mismanagement. Lack of financial integrity leads to ineffective public services that cause countless lives to be lost, futures to be ruined or markets to fail.
Financial integrity issues are essentially issues of governance. While technology, systems reform, accountability structures, legislation and oversight mechanisms are all important part of the integrity puzzle, these cannot be addressed in a piecemeal fashion. True sustainable and efficient financial integrity needs a politically sensitive and values-based approach, building on a broader, systemic approach to governance intervention in a chain spanning from local contexts to the global level.