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Hidden Inequality: How Much Difference Would Adjustment for Illicit Financial Flows Make to National Income Distributions?

Research output: Contribution to journalArticle

Alex Cobham, William Davis, Gamal Ibrahim, Andy Sumner

Original languageEnglish
Article number2016002
JournalJournal of Globalization and Development
Volume7
Issue number2
DOIs
Publication statusPublished - 16 Jun 2017

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  • Hidden Inequality How Much_COBHAM_Publishedonline16June2017_GREEN AAM

    Hidden_Inequality_How_Much_COBHAM_Publishedonline16June2017_GREEN_AAM.pdf, 901 KB, application/pdf

    16/06/2018

    Accepted author manuscript

    Other

    This is the peer-reviewed final manuscript version of Cobham, A., "Hidden Inequality: How Much Difference Would Adjustment for Illicit Financial Flows Make to National Income Distributions?". Journal of Globalization and Development, © de Gruyter, 2017.
    The final publication is available at www.degruyter.com, at https://doi.org/10.1515/jgd-2016-0022

King's Authors

Abstract

A recent innovation in measuring inequality is the incorporation of adjustments to top incomes using data from tax authorities, revealing higher inequality. The thesis of this paper is that the incorporation of estimates of income from illicit financial flows (IFF), reflecting untaxed capital, may be as significant to national inequality-but with greater variation across countries. We propose a method of adjusting national inequality data for illicit flows, and present preliminary results. These estimates suggest that untaxed illicit flows could be as important as (taxed) top incomes to estimates of inequality-highlighting the importance of improving estimates of underlying illicit flows.

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