Understanding Capital Flight: Causes, Methods, and Global Estimates

i discuss the theory, causes, methods, and global estimates of capital flight. Capital flight is widespread in both developed and developing countries, but the reasons differ. In developed nations, it's often legal, responding to return differences and risks. In developing countries, capital flight can be from legitimate or suspicious/illegal sources. Offshore centers that provide banking secrecy are crucial for hiding funds from authorities. Reasons for capital flight include fear of asset seizure, tax evasion, financial restrictions, and money laundering. Various methods are used to smuggle money abroad, such as invoice manipulation and using the internet. Capital flight negatively impacts developing countries by draining resources and forcing them to take on external debt. Estimates suggest the world's wealthy have trillions of dollars in hidden offshore assets, resulting in huge lost tax revenues for developing countries.