Purpose—This study examines the interaction of economic openness, governance, and money laundering. The paper’s main objective is to analyze how trade openness, foreign direct investment, and anti-corruption measures influence the risk of money laundering in specific economic blocs. Design/methodology/approach—This study analyzes these economic blocs (EU, G20, BRICS, and CIVETS) using annual data from the Basel Institute on Governance and World Bank statistics for 2012–2021. A panel-corrected standard errors (PCSE) estimator is employed to examine the relationships among the variables, accounting for cross-sectional dependence and ensuring robust parameter estimation. The corruption control index is a proxy for governance effectiveness, though it does not directly measure regulatory strength. Future research should incorporate more specific variables to evaluate the regulatory impact. Findings—This study reveals significant variations in money laundering risks by a country’s income category and economic bloc influenced by economic openness and governance structures. Economic growth and foreign direct investment (FDI) inflows exhibit contrasting effects on money-laundering risks; they tend to exacerbate risks in middle-income countries, while high-income nations demonstrated a lower risk of money laundering, likely due to more robust governance structures. Trade openness and anti-corruption measures generally reduced risks in wealthier countries, highlighting the importance of strong governance frameworks. These insights suggest that anti-money-laundering policies should be tailored to fit different regions’ unique economic and institutional contexts for enhanced effectiveness. Originality—This study employs a structured approach to analyzing a decade of panel data from key economic blocs, providing insights into the intricate relationships between governance, economic openness, and money laundering risks. Bridging the gap between theoretical research and practical, actionable strategies serves as a valuable resource for improving the effectiveness of anti-money-laundering (AML) measures on a global scale.

Purpose: This paper investigates the impact of microfinance on poverty gap which is the shortfall in income or consumption expenditures below $1.90, $3.20 and $5.50 per day. The paper’s primary goal is to investigate how microloans have impacted the severity of poverty and influenced the cost of poverty eradication in Latin America, empirically evaluate these effects and offer appropriate policy recommendations.Design/methodology/approach: This paper used panel data for 13 Latin American countries from world bank spanning the period 2001–2019 and Fully Modified Ordinary Least Squares model for heterogeneous cointegrated panels. This study used Gross Loan Portfolio per active borrowers, gross domestic product per capita, Gini index, Inflation and Unemployment rate as independent variables and poverty gaps as dependent variables.Findings: Poverty gaps narrow as the loan per borrower increases, and the degree of effect differs with the poverty line, with the magnitude increasing as the poverty line falls, underscoring microloans as an effective tool in closing poverty gaps and lowering the cost of poverty eradication. Growth of GDP per capita is helpful reducing the poverty gap, especially for the less poor of the poor. Inflation and unemployment have no to little impact on the severe poverty gaps, but they start to matter when the poverty line is $5.5 per day. Finally, income distribution inequality widens the poverty gap regardless of the poverty line used.Originality/value: This study suggests several implications. For example, Latin American nations need to embrace tangible policies that encourage economic growth while reducing inequalities in income distribution to effectively eradicate poverty. More supportive environment is necessary to increase the effectiveness of microfinance operations, particularly for the poorest populations. Microfinance institutions need to set less stringent conditions for loan accessibility and repayment schedules that are commensurate with different levels of poverty. Finally, strengthening microfinance as a strategic policy to gradually close poverty gaps and reduce the cost of poverty eradication.

This study examines how government effectiveness contributes to suppressing corruption in BRICS countries—Brazil, Russia, India, China, and South Africa. Institutional theory and the theory of good governance frame the investigation into the interaction between government effectiveness, the rule of law, political stability, and economic growth in reducing corruption, addressing a significant research gap in emerging economies. Using panel data from the World Bank spanning from 2000 to 2021, the study employs dynamic panel analysis with the Panel Autoregressive Distributed Lag (ARDL) model and the Pooled Mean Group (PMG) estimator. While government effectiveness and the rule of law significantly reduce corruption in both the short and long term, political stability exhibits a dual effect: initially aggravating corruption in the short term but reinforcing anti-corruption reforms in the long run. The error correction term is negative and statistically significant, confirming a long-run relationship among our variables, with deviations corrected over approximately three years. The findings emphasize the need for policymakers in emerging economies to enhance institutional quality, strengthen the rule of law, and promote political stability to sustain anti-corruption efforts. While the study focuses on BRICS nations, the insights may be applicable to other emerging economies facing institutional weaknesses. Future research could explore the role of digital governance and cross-country political dynamics in shaping anti-corruption strategies.

This study examines the dual impact of tax evasion on foreign direct investment (FDI) in emerging economies, specifically the BRICS and CIVETS blocs. It aims to assess whether tax evasion incentivizes or deters FDI inflows and explores the role of macroeconomic factors in this relationship. The study employs panel data analysis using World Bank data from 1991 to 2017. The econometric model incorporates key macroeconomic indicators, including public debt, GDP per capita growth, unemployment, and inflation, to evaluate their influence on FDI trends. A comparative approach assesses the differences in FDI responses between BRICS and CIVETS economies. The results indicate that tax evasion significantly negatively impacts FDI inflows, with a more pronounced effect in CIVETS economies due to weaker institutional frameworks and heightened economic volatility. Conversely, economic growth and effective public debt management positively influence FDI inflows, emphasizing the critical role of macroeconomic stability in attracting foreign investment. Additionally, inflation and unemployment emerge as significant determinants of FDI trends across different regions and periods. The findings highlight the necessity for policymakers to establish strong institutional frameworks and improve macroeconomic stability to alleviate the negative impacts of tax evasion on foreign direct investment (FDI). Enhancing regulatory mechanisms and promoting economic resilience can boost investment attractiveness and encourage sustainable economic growth. This study adds to the literature by providing a comparative analysis of tax evasion’s effect on FDI in two significant emerging economies. It delivers empirical insights into the intricate relationship between tax policy, economic stability, and foreign investment, guiding strategies for policymakers in emerging markets.

This paper investigates the impact of financial crime on capital inflows into the G20 economies over the period 2012–2023. Utilizing a panel dataset comprising indicators of financial crimes, specifically corruption perceptions and anti-money laundering (AML) compliance, alongside macroeconomic controls, the study examines whether financial crime significantly affects the overall magnitude and composition of international capital inflows. Employing panel corrected standard error (PCSE) estimations, the empirical results show a statistically significant negative relationship between financial crime and capital inflows, suggesting that higher financial crime risk discourages foreign direct investment (FDI) and remittances. Moreover, the adverse impact of financial crime differs across countries based on income classification, being more pronounced in lower-income G20 economies. These findings underline the critical importance of robust governance structures and practical regulatory frameworks to mitigate financial crime risks and maintain stable international capital inflows. The paper concludes with actionable policy recommendations aimed at enhancing institutional quality and strengthening financial oversight to foster investor confidence and promote sustainable economic growth.