This article analysed the relationship between illicit inancial lows (IFFs) and
human development, as measured with the United Nations Human Development Index
(HDI), using data for 56 low- and middle-income countries for the period 2002–2013. The
main result was that, in the cluster of the most corrupt countries, the total efect of an
annual 10% point increase in the ratio of IFFs to total trade would imply a 21.7 points
decrease in the HDI level as a long-run efect. Although apparently small, this estimated
long-run efect is three times greater than the annual average increase observed in the HDI
over the period for the entire sample of countries.
