Skip to Main Navigation

Policy Research Talk: Detecting Corruption and State Capture

October 28, 2019

Washington, DC and Online


  • Corruption is a crucial development challenge, but, by its very nature, difficult to detect. This Policy Research Talk will focus on new methods to detect grand corruption.

    In the first part of the presentation, World Bank economist Bob Rijkers will analyze the relationship between political connections, regulation, and firm performance via a case study of state capture in Tunisia during the rule of Ben Ali. Firms owned by the Ben Ali family accounted for 16% of private sector profits, and were especially profitable in highly regulated sectors. Ben Ali-owned firms were also more likely to evade taxes, evading at least $1.2 billion USD in import taxes alone. Regime change does not seem to have curbed capture.

    The second part of the presentation will discuss a new method to detect corruption in customs. Application of this method in Madagascar led to the sanctioning of several inspectors, reform of the customs administration, and coincided with rapid revenue growth.

    Rijkers will conclude with an analysis of the relationship between international aid disbursements and the accumulation of hidden wealth in private bank accounts in tax havens held almost exclusively by elites. In the most aid-dependent countries, aid disbursements are shown to coincide within the same quarter with significant and substantial increases in offshore deposits held in tax havens. By contrast, aid is not associated with financial flows to other destinations. Diversion of international aid is a possible explanation for this pattern.

  • Image

    Bob Rijkers (Speaker)

    Senior Economist

    Bob Rijkers is a Senior Economist in the Trade and International Integration Unit of the Development Research Group. He is interested in political economy, trade and labor market issues. Since joining the World Bank full-time in 2008, he has worked in the Poverty Reduction Anchor of the PREM network, the Macroeconomics and Growth Unit of the Development Economics Research Group and the Office of the Chief Economist of the Middle East and Northern Africa region. He holds a BA in Science and Social Sciences from University College Utrecht, Utrecht University and an M.Phil. and D.Phil. in Economics from the University of Oxford.


    Aart Kraay (Chair)

    Director of Research

    Aart Kraay is Director of the Development Research Group at the World Bank. He joined the World Bank in 1995 after earning a Ph.D. in economics from Harvard University (1995), and a B.Sc. in economics from the University of Toronto (1990). His research interests include international capital movements, growth and inequality, governance, and the Chinese economy. His research on these topics has been published in scholarly journals such as the Quarterly Journal of Economics, the Review of Economics and Statistics, the Economic Journal, the Journal of Monetary Economics, the Journal of International Economics, and the Journal of the European Economic Association. He is an associate editor of the Journal of Development Economics, and co-editor of the World Bank Economic Review. He has also held visiting positions at the International Monetary Fund and the Sloan School of Management at MIT, and has taught at the School of Advanced International Studies at Johns Hopkins University.


    Caroline Freund (Discussant)

    Global Director, Trade, Investment & Competitiveness

    Caroline Freund is Global Director of Trade, Investment and Competitiveness. Previously she was a Senior Fellow at the Peterson Institute for International Economics. She has also worked as Chief Economist for the Middle East and North Africa at the World Bank, after working for nearly a decade in the international trade unit of the research department. Freund began her career in the international finance division of the Federal Reserve Board and spent a year visiting the research department of the IMF. She has published extensively in academic journals and is the author of Rich People Poor Countries: The Rise of Emerging Market Tycoons and their Mega Firms. She is a US national and received a PhD in economics from Columbia University.

  • The monthly Policy Research Talks showcase the latest findings of the World Bank’s research department, challenge and contribute to the institution’s intellectual climate, and re-examine conventional wisdom in current development theories and practice. These talks facilitate a dialogue between researchers and operational staff and inform World Bank operations both globally and within partner countries. Read More »