GFI & Illicit Financial Flows

While browsing the list of Wikipedia’s think tanks, I stumbled upon the Global Financial Integrity (GFI) organization based on Washington DC and thought it was particularly relevant to BGS. GFI is described as a “non-profit, research and advocacy organization” focusing its research on “national and multilateral policies, safeguards, and agreements aimed at curtailing illicit financial flows and enhancing global development and security”. It fits under the second category of think tanks as a privately funded organization, receiving funding from the Ford Foundation, the Task Force on Financial Integrity and Economic Development, and individual donors.

GFI focuses primarily on research that applies to stemming illicit financial flows, a term I was unfamiliar with. Basically, its an illegal form of capital flight (when assets/money rapidly flow out of a country due to some economic event and causes investors to lose confidence in its economic strength and/or lower their valuations of the country) and occurs when money is illegally earned or transferred. The money disappears from the struggling country of origin and earnings on the stock of illicit financial flows are rarely returned to that country. The idea is that large global companies will “misprice” (overprice) goods as a means to shift money out of developing countries. This video by the GFI director Raymond Baker does a pretty good job of explaining the concept and its effects (it’s pretty long, but the segment from about 4:40 – 6:00 sums it up):

GFI Director Explains Illicit FInancial Flows

After learning about the enormous degree of global corruption that exists behind closed doors, I think I’d definitely rather work for a privately or university funded think tank as opposed to government funded. I think, especially in some think tanks of other countries, the government sponsor could wield too much influence in what research can be conducted/published, which has the potential for obvious harmful consequences. Furthermore, privately funded think tanks are sponsored by donors who have a passion for the organization’s mission statement and could provide additional support. If I could create a think tank to investigate any particular issue I would have to go with America’s youth and education. There has been extensive research conducted on the importance of education and literacy, but little advocacy for a particular solution for increasing a. the quality of education received and b. the graduation rate of children today. Again, I would want my think tank to be privately sponsored so that the issue can be addressed without government intervention, and also because there are numerous organizations currently in existence that are dedicated to promoting education that could be beneficial to partner with.