Strategies for preventing illicit financial flows in developing countries

Purpose: This paper aims to critically review the strategies for prevention of illicit financial flows to and from developing countries with a view of ascertaining the most effective strategies to be selected and implemented by developing countries to stem the scourge. Design/methodology/approach: The peer-reviewed journal articles were studied; those that discussed illicit financial flows were selected and reviewed critically using the systematic quantitative assessment techniques together with an output table. Findings: The critical review deduced that enacting effective trade laws, trade regulations, creating a beneficial ownership registry, multinational companies disclosing information on business, automatic exchange of information on tax issues, the Financial Action Task Force 40 guidelines on anti-money laundering and countering financing of terrorism and domestic and international cooperation are the most reliable strategies that should be implemented by developing countries. Research limitations/implications: The wide geographic scope of developing countries, use of only high-quality databases that restricted the use of other articles and use of public sector perspective are the limitations for this paper. Originality/value: This study is amongst the limited works to discuss the most reliable and effective strategies to prevent illicit financial flows in developing countries.