Tuesday, November 16, 2010

Zoellick, Baudelaire and the devil's disguise

Recently we pointed out this superb quote from World Bank president Robert Zoellick, which goes a long way towards explaining why the world has been so blind to the problem of tax havens, or secrecy jurisdictions, for so long.
Too often research economists seem not to start with the key knowledge gaps facing development practitioners, but rather search for questions they can answer with the industry’s currently favorite tools.
It is hard to measure illicit, secret things - and it doesn't help that nobody agrees exactly what a secrecy jurisdiction is. So secrecy jurisdictions have grown to dominate the world economy, almost completely beneath the radar. Now we have been reminded of another quote, this time from the French poet Charles Baudelaire, which nicely complements the Zoellick quote, and drives the point home.
La plus belle des ruses du diable est de vous persuader qu'il n'existe pas.
(The devil's finest trick is to persuade you that he doesn't exist.)
Well, the world has long known of the existence of secrecy jurisdictions; but it has failed to see what they are really about. They are not about money laundering or terrorist financing -- though those are a minor part of it -- but something much bigger. Find out more about this vast subject here.

Update: a reader of today's blog sent us this (we've tweaked it slightly for ease of reading):

"I agree 100% that this runs to the core of much of today's problem in dealing with secrecy, crime and secrecy jurisdictions. Speaking with an IMF Anti Money Laundering (AML) expert, he seemed consumed by the problem of how to measure effective AML systems. In my view it is nearly futile to do so. Discussing best practice, highlighting weaknesses - yes; but measuring it so in ways that allow comparisons... I don't believe that we will ever do so."


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