This paper investigates the relationship between corruption and capital flight in developing countries. Part I tackles the challenge of defining and measuring capital flight, as well as the various root causes of expatriated savings. Our research contributes to the corruption and capital market literature in several ways. First, the issue of capital flight has attracted less attention than that of external capital inflows in emerging market countries. In particular, capital flight has kept a low profile in academic circles until the late 1990s. In addition, research often looks at capital flight as a portfolio issue, and very few studies consider corruption as a «push factor». Second, our paper looks at why capital flight deserves renewed interest, as the globalization of financial markets broadens investment diversification opportunities for domestic residents. Increasingly, official ...

This paper investigates the relationship between corruption and capital flight in developing countries. Part I tackles the challenge of defining and measuring capital flight, as well as the various root causes of expatriated savings. Our research contributes to the corruption and capital market literature in several ways. First, the issue of capital flight has attracted less attention than that of external capital inflows in emerging market countries. In particular, capital flight has kept a low profile in academic circles until the late 1990s. In addition, research often looks at capital flight as a portfolio issue, and very few studies consider corruption as a «push factor». Second, our paper looks at why capital flight deserves renewed interest, as the globalization of financial markets broadens investment diversification opportunities for domestic residents. Increasingly, official ...