On the determinants of capital flight from Russia (original) (raw)

2002, Atlantic Economic Journal

The paper addresses the problem of deÞning and assessing the scale of capital ßight from Russia and of brießy reviewing the channels through which capital, both of legal and illegal origin, illegally leaves Russia. It then highlights the determinants of Russian capital ßight, as the traditional view of a reaction to divergences among real domestic and foreign returns and to economic and political risks proves inadequate. More important factors are linked to speciÞc features of the transition process under way, that is macroeconomic instability and variability of government policies, weak protection of property rights and savings, a fragile banking system limiting access to investment Þnance, high and unevenly enforced taxes, a large share of unofficial activities, and considerable levels of corruption. (JEL F32); Atlantic Econ. J., 30(2): pp. 150-171, Jun. 02. c°A ll Rights Reserved

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