La fiscalité a fait tomber Al Capone. Peut-elle nous aider à combattre la corruption ?

Anne-Lise Prigent, L’Observateur de l’OCDE

Photo : Robert de Niro en Al Capone dans Les Incorruptibles, 1987. ©Entertainment Pictures/Alamy Stock Photo

Chaque année, entre 1500 et 2000 milliards de dollars partent en fumée en pots-de-vin, soit 2% de l’économie mondiale. Il ne s’agit là que d’une partie infime de la corruption qui gangrène la planète. Cette corruption nourrit le terrorisme, le changement climatique ou encore la crise des réfugiés. Elle mine la confiance des citoyens dans les gouvernements et les marchés. La corruption peut également tuer, par exemple quand des bâtiments sont érigés au mépris des normes techniques afin de gagner des contrats et de remplir quelques poches. La corruption nuit sérieusement au développement.

C’est pourquoi le combat contre la corruption et les pots-de-vin fait partie intégrante des Objectifs de développement durable (objectif 16-5). Et il ne pourra être gagné sans la meilleure des armes : la coopération.

Pourtant, alors qu’une armée est déjà – par nature – stratégiquement déployée dans presque tous les pays du monde, on ne l’utilise pas – ou pas assez, comme je le souligne dans cet article.

Les contrôleurs fiscaux sont idéalement positionnés pour repérer les transactions suspectes. Ils pourraient aider à barrer la route de la corruption, comme ils ont barré celle d’Al Capone en son temps. Mais pour cela, il faudrait mettre en place une vraie coopération entre les autorités fiscales et celles qui luttent contre la corruption.

Car les chiffres laissent plutôt rêveurs. Parmi toutes les affaires de corruption internationale liées à des pots-de-vin, combien ont été détectées par les autorités fiscales entre 1999 et 2017 ? Un pour cent. Oui, un pour cent…

On a donc d’un côté des enquêteurs et procureurs fiscaux qui cherchent à traquer les cas de corruption. Et de l’autre, des contrôleurs fiscaux qui ont accès à une mine d’information. Ces deux équipes naturellement complémentaires ne jouent pas assez ensemble.

Pendant ce temps, les acteurs de l’économie criminelle coopèrent et prospèrent.

Pouvons-nous renverser la vapeur ? Oui, si nous le voulons. Le Forum mondial 2018 de l’OCDE sur l’intégrité et la lutte anti-corruption a montré comment.

L’Observateur de l’OCDE vous en dit plus ici : La fiscalité à l’assaut de la corruption : ce que peut la coopération.

©OECD Insights, avril 2018

Tax got Al Capone. Could tax now be a way of beating corruption?

Anne-Lise Prigent, OECD Observer

Pictured: Robert De Niro as Al Capone in The Untouchables, 1987. ©Entertainment Pictures/Alamy Stock Photo

Every year, bribes eat up an estimated 1 500 to 2 000 billion dollars, the equivalent of 2% of the global economy. And this is just a tiny fraction of the corruption that infects our world, feeding terrorism, climate change and the refugee crisis. Corruption undermines the public’s trust in government and markets, and holds back development. Corruption can even cost lives, as the likes of building and engineering standards are secretly bypassed to win contracts and line a few pockets, sometimes with tragic consequences.

No wonder the fight against corruption and bribery is built into the Sustainable Development Goals in Target 16-5. But the fight will not be won without co-operation and, as I highlight in this article, this sorely underused weapon could become very powerful if properly deployed.

Take the world’s tax inspectors. We have a veritable army at our disposal which is already strategically deployed in the field, in virtually every country in the world. Surely our tax inspectors could be trained to spot suspicious transactions. They could help stop corruption in its tracks, as they stopped Al Capone. For this to happen, we need more co-operation between anti-corruption and tax authorities.

How many of the international corruption cases linked to bribery between 1999 and 2017 were brought to light by tax authorities? Barely 1%. Yes, 1%!

There are investigators and prosecutors tracking down corruption cases. And then we have tax inspectors with access to a mine of financial information. But the two teams rarely co-operate, rarely join the dots.

Meanwhile, the bad guys don’t work in silos and business is booming.

Can we change this? Yes, we can if we want to. The OECD’s 2018 Global Anti-Corruption and Integrity Forum took a good hard look at the situation.

Read my article in the OECD Observer: Tackling corruption through taxation: The power of co-operation.

©OECD Insights April 2018

Herders vs Farmers: Resolving deadly conflict in the Sahel and West Africa

Ousman Tall, Sahel and West Africa Club (SWAC/OECD)

©Obie Oberholzer/LAIF-REA

In the Sahel region of West Africa, herdsmen traditionally head south across the semi-arid strip below the Sahara desert and above the Sudanian Savanna, towards the coasts during the long dry season to graze their animals. The farmers in the host regions used to welcome the herdsmen’s arrival, as the grazing cattle fertilised their cropland. In the last decade, however, economic, environmental and population pressures have turned this mutually benefitting symbiosis into deadly conflict.

From 2011 to 2016 more than 2,000 people were killed annually in Nigeria during clashes between herders and farmers, most notably in Benue and Taraba states in Nigeria’s Middle Belt. Now, in the Sahel area, similar violence has erupted, particularly in Mali and Senegal. The need for mediation and resolution strategies is critical.

For centuries, pastoralism—the use of extensive grazing on rangelands for livestock production—has sustained both nomadic and sedentary communities throughout the Sahel. Roughly 50 million people, most of them poor, economically depend upon livestock-raising in the region. However, the pastoral way of life is increasingly under threat. Armed conflict, trafficking and terrorism have made vast areas off-limits. Desertification and climate-induced changes have wiped out grazing areas, forcing pastoralists to look elsewhere for fresh pasture and water. Crop farming has increased, and with it a further loss of available rangeland. Meanwhile, livestock density per hectare of grazing land increased by 41% between 2006 and 2016 while forage and fodder production significantly lowered. This has led to earlier cross-border transhumance—the seasonal movement of cattle from one grazing ground to another—increasing pressure on croplands and the risk of conflicts in host countries. Many of these centuries-old transhumance corridors no longer exist, further impeding the movement of herders.

Nomadic pastoralists are key to the region’s stabilisation. The UN’s Economic Commission for Africa reported last year that marginalised herders are involved in most African conflicts, including those in the Central African Republic, Chad, Mali, northeastern Kenya, Somalia and Sudan. A 2016 paper from the Global Center on Conflict, Security and Development makes the point succinctly: “With their superior knowledge of the terrain, they [pastoralists] can become key allies that can help government to monitor and control illicit activities, but that if not included in the different political and social processes can also help criminal groups navigate these challenging areas. Being the only food-producing group in these vast regions, they can sustain or constrain terrorists or other criminal groups. Finally, they are a relatively well-defined target group for development initiatives. Any long-term development effort aimed at stabilising the region would be doomed without the pastoral population’s involvement.”

International and regional efforts to help pastoralists survive and adapt are underway. At the fore are three projects initiated by the World Bank. The Regional Sahel Pastoralism Support Project (PRAPS), developed in 2015 for six livestock-producing Sahelian countries–Burkina Faso, Chad, Mali, Mauritania, Niger and Senegal–seeks to improve access to essential products, services, and markets for pastoralists and agro-pastoralists. The Regional Investment Programme for Livestock and Pastoral Development in Coastal Countries (PRIDEC) promotes policies designed to support pastoralism and cross-border transhumance in the five West African coastal countries that host nomadic livestock–Benin, Côte d’Ivoire, Ghana, Nigeria and Togo. Pastoralism and Stability in the Sahel and the Horn of Africa (PASSHA) works with PRAPS to assess and resolve conflicts in trans-border areas and along transhumance axes. Its goal is to help the six PRAPS countries better respond to pastoral crises and emergencies.

An early end to the rains last season means many Sahelian and West African countries are facing the prospect of very lean times ahead, particularly in the pastoral zones of Burkina Faso, Chad, Mali, Niger, Senegal and Mauritania. According to the Cadre Harmonisé (CH), which helps prevent food crises by identifying affected populations and recommending measures to improve food and nutrition security, grain production is significantly lower compared to the five-year average, particularly in Mauritania (deficit of 95%) and Senegal (deficit of 80%). Fodder production is almost non-existent in the major agro-pastoralist areas, which has led to a massive and much earlier departure of pastoralists to regions where conflicts could occur.

Creating a venue for dialogue is the best way to help the region better anticipate and prevent such crises. The Food Crisis Prevention Network (RPCA) Restricted Meeting (Paris, 16-18 April) at the OECD is exactly that—an opportunity for regional institutions, government officials from Sahelian and coastal countries, crop and livestock producers, civil society organisations and technical and financial partners to exchange views and find a lasting solution.

©OECD Insights April 2018

The fine art of reading financial accounts and balance sheets

Peter van de Ven, OECD Statistics and Data Directorate

©REUTERS/John Gress

Worried what the future holds in store for the world economy? Picking through national accounts data can improve your understanding.

It’s 2018 and that means a decade has passed since the collapse of financial markets that led to the onslaught of the worst economic and social crisis in our lifetimes. And we are not out of the woods yet! Indeed we are still grappling with the consequences of the crisis today. True, the economy as measured by GDP and employment have returned to their pre-crisis levels in many countries, but unorthodox monetary policies remain in place, such as expanding the money supply through “quantitative easing” and low or even negative interest rates. Some experts worry that we may be entering into a new era of asset price bubbles. Central bankers are pulling their hair out trying to figure out how to reverse these policies without disrupting capital markets and the economy at large. Rapid credit expansion is happening in emerging market economies, which may exacerbate financial vulnerabilities worldwide, while high public debt levels in developed countries could cramp governments’ ability to act if there is another financial crisis, as it has in the past.

Trying to understand all these phenomena underlines how useful and important it is to be able to reach for timely, reliable and comprehensive data to help you monitor financial and economic developments, and their interconnections across sectors and countries. The framework of financial accounts and balance sheets (part of the system of national accounts) is the mechanism that delivers essential macro-economic information to help assess financial risks and vulnerabilities, and analyse links between the world of finance and the “real” economy, key elements that policymakers need to make informed decisions.

However, policy analysts and researchers often overlook this rich source of information, and underestimate the useful role such accounts play in the pyramid of official statistics.

Financial accounts and balance sheets basically provide a complete and consistent overview of the assets and liabilities of sectors such as households, non-financial corporations, financial corporations, and government, as well as the financial relations of a country with the rest of the world. You can derive, for example, how much national governments and households are indebted, according to narrower and broader definitions. The financial accounts and balance sheets not only provide information on the stocks of financial assets and liabilities, but show how savings are used to invest or how investments are financed by incurring liabilities, and how stocks are affected by holding gains and losses. They show, for example, how investments by corporations are financed by retained profits or by additional borrowing. Or whether holding gains on assets accumulated by pension funds help to sustain the payments of future pension benefits.

The macro-economic framework brings coherence to hundreds of statistical sources on finance available for our countries, be it annual reports of corporations, government financial budgets, supervisory information for banks, insurance corporations and pension funds, foreign direct investment, or statistics on household wealth.

The fact that interpreting financial accounts and balance sheets can be a challenge should be no excuse for not looking at them. Back in 1777, David Hume started his Essays on Commerce and Trade with a surprising warning that can apply to the intricacies (and importance) of financial accounts: “The greater part of mankind may be divided in two classes, that of shallow thinkers who fall short of the truth; and that of abstruse thinkers who go beyond it. The latter class are by far the most rare and, I may add, the most useful and valuable.”

Why is there such a lack of awareness of the system of national accounts? For a start, few university degree programmes in economics include macro-economic statistics in their curriculum. There is discussion about GDP, household disposable income and debt, but there is very little education on how these aggregates are defined, what they include or exclude, and how they are measured.

The OECD has decided to take these challenges on by publishing more accessible explanations of the basics of national accounts. Understanding Financial Accounts responds to the renewed interest in monetary and financial stability issues, and in monitoring financial risks and vulnerabilities, including their impact on growth and employment. You will not be surprised therefore to find a special emphasis on the links between the financial accounts and balance sheets and the non-financial accounts section of the system of national accounts, which deals with the “real” economy. As an example, it shows that in some countries non-financial corporations did not invest their earnings in new capital assets such as new production facilities and employment, but instead used their profits to invest in liquid financial assets. All too often, financial accounts and non-financial accounts are treated as separate systems, partly because they are compiled by different national statistical authorities, but also because policy and research frequently concentrates on one or the other.

If you are a young statistician, student, journalist, economist, or concerned policymaker, delving into national accounts will take you straight to the heart of financial developments in OECD economies. You might not be able to predict the future exactly, but you will be better able to understand and respond to it, when it comes.

Understanding Financial Accounts is the fruit of a fully co-operative effort between the OECD and the Bank for International Settlements (BIS), the European Central Bank (ECB), Fondazione AIB, the International Monetary Fund (IMF), National Central Banks (Austria, Italy and Portugal) and National Statistical Offices (Australia and Canada) and the Treasury of Canada.

Reference

van de Ven, P. and D. Fano (eds.) (2017), Understanding Financial Accounts, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264281288-en.

©OECD Insights April 2018