APPLICATION OF A FINANCIAL MONITORING SYSTEM AS A COMPONENT OF AN ANTI-CORRUPTION STRATEGY
Abstract
This article examines the feasibility of using a financial monitoring system as a key component of an anti-corruption strategy. It has been determined that the main anti-corruption strategies that can eliminate the motivation to conclude a corruption agreement are to increase the effectiveness of existing formal rules and complicate the process of legalizing proceeds from corruption. The main advantage of the first of the aforementioned strategies is the simultaneous elimination of both the motivation of clients to conclude a corruption agreement and the increase in business activity, due to the reduction of the level of transaction costs of bureaucratic procedures. In contrast, the strategy of complicating the process of legalizing proceeds from corruption is aimed at reducing the motivation to conclude a corruption agreement on the part of corrupt officials at an unchanged level of transaction costs of bureaucratic procedures. The analysis of the effectiveness of the above-mentioned anti-corruption strategies allowed us to identify a number of shortcomings (the need for constant monitoring of the effectiveness of the system of current formal rules; the presence of time lags in identifying and eliminating the ineffectiveness of current formal rules; and the subjectivity of assessments of the effectiveness of formal rules), which complicate the application of increasing the effectiveness of current formal rules as an anti-corruption strategy. At the same time, it is shown that the undoubted advantage of complicating the process of legalization of income from corruption activities, an anti-corruption strategy, is the reduction of the level of costs for maintaining anti-corruption structures due to the possibility of using the financial monitoring system as the main element of the anti-corruption strategy; the absence of long time lags associated with the need to identify and reform ineffective formal rules; and the depersonalization of the financial monitoring system, which eliminates the risks of the emergence and spread of internal corruption in anti-corruption structures. It is proven that complicating the process of legalization of income from corruption activities, as an anti-corruption strategy, has high efficiency and the possibility of practical implementation.
References
Абрамов Ф.В. Трансакційні витрати корупційної угоди. Вісник Національного технічного університету «Харківський політехнічний інститут». Темат. вип. “Технічний прогрес і ефективність виробництва”. 2005. № 1. С. 273–282.
Castillo O.N., et al. Determinants of extreme wealth: the role of corruption. Hitotsubashi Journal of Economics. 2022. Vol. 63. № 2. Pp. 126–148.
Khan S. Investigating the Effect of Income Inequality on Corruption: New Evidence from 23 Emerging Countries. Journal of the Knowledge Economy. 2022. Vol. 13. № 3. P. 2100–2126.
Gök, A. Whether corruption sands or greases the wheels of foreign direct investment: a meta-regression analysis. International Review of Economics. 2023. Vol. 70. P. 477–501.
Barone R. Home sweet home, how money laundering pollutes the real estate market: an agent based model. Journal of Economic Interaction and Coordination. 2023. Vol. 18. № 4. P. 779–806.
Barone R., Masciandaro D. Cryptocurrency or usury? Crime and alternative money laundering techniques. European Journal of Law and Economics. 2019. Vol. 47. № 2. P. 233–254.
Barone R., Masciandaro D. Organized crime, money laundering and legal economy: theory and simulations. European Journal of Law and Economics. 2011. Vol. 32. № 1. P. 115–142.
Смагло О. В. Функціонування системи фінансового моніторингу в Україні. Економіка та суспільство. 2021. Випуск 26.
Canen N., and Wantchekon L. Political Distortions, State Capture, and Economic Development in Africa. The Journal of Economic Perspectives. 2022. Vol. 36. № 1. Pp. 101–124.
Agerberg M. Corrupted Estimates? Response Bias in Citizen Surveys on Corruption. Political Behavior. 2022. Vol. 44. № 2. P. 653–678.
Statnik, JC., Vu, TLG. & Weill, L. Does Corruption Discourage More Female Entrepreneurs from Applying for Credit? Comparative Economic Studies. 2023. Vol. 65. № 1. P. 1–28.
Sekkat K. Have you been served, your honor? Yes, thank you, your excellency: the judiciary and political corruption. Constitutional Political Economy. 2022. Vol. 33. № 3. P. 326–353.
Iorio R., Segnana M.L. Is paying bribes worthwhile? Corruption and innovation in middle-income countries. Eurasian Business Review. 2022. Vol. 12. № 3. P. 475–504.
Perumal K. Rethinking global anti-corruption campaign. Journal of Social and Economic Development. 2023. Vol. 25, № 1. P. 365–379.
Acaravci A., Artan S., Hayaloglu P. et al. Economic and Institutional Determinants of Corruption: The Case of Developed and Developing Countries. Journal of Economics and Finance. 2023. Vol. 47. № 1. P. 207–231.
D’Avino C. Money laundering and AML regulatory and judicial system regimes: investigation of FinCEN files. European Journal of Law and Economics. 2023. Vol. 55. № 2. P. 195–223.
Schneider F. Turnover of organized crime and money laundering: some preliminary empirical findings. Public Choice. 2010. Vol. 144. № 3-4. P. 473–486.
Волоснікова Н.М., Сержанов В.В., Абрамов Ф.В. Попередження корупції в системі фінансового моніторингу: інституційний підхід. Цифрова економіка та економічна безпека. 2023. Випуск 4(04). С. 3–8.
Сержанов В.В, Дяченко Т. А., Абрамов Ф. В. Коррупція, неефективні інститути та європейська інтеграція. Вісник Ужгородського національного університету. Міжнародні економічні відносини та світове господарство. 2022. № 44. С. 90–95.
Волоснікова, Н.М. Планування та аналіз трансакційних витрат розробки інноваційної продукції. Науково-технічна збірка. Комунальне господарство міст. 2006. (71). с. 42-49.
В. Дяченко Т.А., Сержанов В.В., Абрамов Ф.В. Дискреційні повноваження чиновників як чинник ефективності формальних правил системи фінансового моніторингу. Держава та регіони. Серія: Економіка та підприємництво. 2023. № 4 (130). С. 6-11.
Абрамов Ф. В. Чинники сталості умовно неефективних формальних правил. Вісник Національного технічного університету «ХПІ» Збірник наукових праць. Серія: Технічний прогрес і ефективність виробництва. 2015. № 26. С. 125–131.
Абрамов Ф. В. Критерії доцільності реформування умовно та безумовно неефективних формальних правил. Бізнес Інформ. 2016. № 6. С. 8–12.
Абрамов Ф. В. Маніпулювання суспільними настроями як чинник неефективності неформальних правил. Бізнес Інформ. 2018. № 11. С. 8–13.
Абрамов Ф. В. Заходи з попередження маніпулювання суспільними настроями. Бізнес Інформ. 2019. № 11. С. 22–27.
Волоснікова Н.М., Максименко Я.А., Сержанов В.В., Абрамов Ф.В. Напів формальні правила, як чинник динаміки ефективності формальних правил фінансового моніторингу. Бізнес Інформ. 2023. № 1. С. 12–17.
Абрамов Ф. В. Напівформальні правила як чинник динаміки ефективності формальних правил. Цифрова економіка та економічна безпека. 2022. Випуск 3(03). С. 26-30.
Абрамов Ф.В. Фактори поширення корупції в безготівковому суспільстві. Східна Європа: економіка, бізнес та управління. 2023. Випуск 4 (41). С. 3-8.
Abramov F. V. (2005) Transaktsiini vytraty koruptsiinoi uhody [Transaction costs of a corrupt transaction]. Visnyk Natsionalnoho tekhnichnoho universytetu “Kharkivskyi politekhnichnyi instytut”. Thematic issue “Tekhnichnyi prohres i efektyvnist vyrobnytstva”, no. 1, pp. 273-282.
Castillo O.N., et al. (2022) Determinants of extreme wealth: the role of corruption. Hitotsubashi Journal of Economics, vol. 63, no. 2, pp. 126–148.
Khan S. (2022) Investigating the Effect of Income Inequality on Corruption: New Evidence from 23 Emerging Countries. Journal of the Knowledge Economy, vol. 13, no 3, pp. 2100–2126.
Gök, A. (2023) Whether corruption sands or greases the wheels of foreign direct investment: a meta-regression analysis. International Review of Economics, vol. 70, pp. 477–501.
Barone R. (2023) Home sweet home, how money laundering pollutes the real estate market: an agent based model. Journal of Economic Interaction and Coordination, vol. 18, no 4, pp. 779–806.
Barone R., Masciandaro D. (2019) Cryptocurrency or usury? Crime and alternative money laundering techniques. European Journal of Law and Economics, vol. 47, no 2, pp. 233–254.
Barone R., Masciandaro D. (2011) Organized crime, money laundering and legal economy: theory and simulations. European Journal of Law and Economics, vol. 32, no 1, pp. 115–142.
Smahlo O.V. (2021) “Funktsionuvannia systemy finansovoho monitorynhu v Ukraini“ [Functioning of the Financial Monitoring System in Ukraine]. Ekonomika ta suspilstvo, no. 26.
Canen, N., and Wantchekon L. (2022) Political Distortions, State Capture, and Economic Development in Africa. The Journal of Economic Perspectives, vol. 36, no. 1, pp. 101–124.
Agerberg M. (2022) Corrupted Estimates? Response Bias in Citizen Surveys on Corruption. Political Behavior, vol. 44, no. 2, pp. 653–678.
Statnik, JC., Vu, TLG. & Weill, L. (2023) Does Corruption Discourage More Female Entrepreneurs from Applying for Credit? Comparative Economic Studies, vol. 65, no 1, pp. 1–28.
Mandal B. (2022) Lower Corruption Warrants Less, but Higher Corruption Removes it: A Ricardian Note. Journal of Quantitative Economics, vol. 20, no. 2, pp. 479–486.
Sekkat K. (2022) Have you been served, your honor? Yes, thank you, your excellency: the judiciary and political corruption. Constitutional Political Economy, vol. 33, no. 3, pp. 326–353.
Perumal K. (2023) Rethinking global anti-corruption campaign. Journal of Social and Economic Development, vol. 25, no. 1, pp. 365–379.
Acaravci A., Artan S., Hayaloglu P. et al. (2023) Economic and Institutional Determinants of Corruption: The Case of Developed and Developing Countries.Journal of Economics and Finance. vol. 47, no. 1, pp. 207–231.
D’Avino C. (2023) Money laundering and AML regulatory and judicial system regimes: investigation of FinCEN files. European Journal of Law and Economics, vol. 55, no. 2, pp. 195–223.
Schneider F. (2010) Turnover of organized crime and money laundering: some preliminary empirical findings. Public Choice, vol. 144, no. 3-4, pp. 473–486.
Volosnikova N.M., Serzhanov V.V., Abramov F.V. (2023) Poperedzhennya koruptsiyi v systemi finansovoho monitorynhu: instytutsiynyy pidkhid [Corruption prevention in the financial monitoring system: an institutional approach]. Tsyfrova ekonomika ta ekonomichna bezpeka, vol. 4(04), pp. 3–8.
Serzhanov V.V, Dyachenko T. A., Abramov F. V. (2022) Korruptsiya, neefektyvni instytuty ta yevropeysʹka intehratsiya [Corruption, inefficient institutions and European integration]. Visnyk Uzhhorodsʹkoho natsionalʹnoho universytetu. Mizhnarodni ekonomichni vidnosyny ta svitove hospodarstvo. Uzhhorod, no. 44, pp. 90–95.
Volosnikova, N.M. (2006) Planuvannya ta analiz transaktsiynykh vytrat rozrobky innovatsiynoyi produktsiyi [Planning and analysis of transaction costs of developing innovative products]. Naukovo-tekhnichna zbirka. Komunalne hospodarstvo mist, pp. 42-49.
Dyachenko T.A., Serzhanov V.V., Abramov F.V. (2023) Dyskretsiyni povnovazhennya chynovnykiv yak chynnyk efektyvnosti formalʹnykh pravyl systemy finansovoho monitorynhu [Discretionary powers of officials as a factor in the effectiveness of formal rules of the financial monitoring system]. Derzhava ta rehiony. Seriya: Ekonomika ta pidpryyemnytstvo, no. 4 (130), pp. 6-11.
Abramov F. V. (2015) Chynnyky stalosti umovno neefektyvnykh formalnykh pravyl [The factors of stability of conditionally inefficient formal rules]. Visnyk Natsionalnoho tekhnichnoho universytetu «KhPI». Seriia «Tekhnichnyi prohres i efektyvnist vyrobnytstva», no. 26, pp. 125-131.
Abramov F. V. (2016) Kryterii dotsilnosti reformuvannia umovno ta bezumovno neefektyvnykh formalnykh pravyl [Criteria for the Appropriateness of Reforming Both the Conditionally and the Unconditionally Inefficient Formal Rules]. Biznes Inform, no. 6, pp. 8-12.
Abramov F. V. (2018) Manipulyuvannya suspilnymy nastroyamy yak chynnyk neefektyvnosti neformalʹnykh pravyl [Manipulation of public sentiment as a factor in the ineffectiveness of informal rules]. Biznes Inform, no. 11, pp. 8–13.
Abramov F. V. (2019) Zakhody z poperedzhennya manipulyuvannya suspilʹnymy nastroyamy [Measures to prevent manipulation of public sentiment]. Biznes Inform, no. 11, pp. 22–27.
Volosnikova N.M., Maksymenko Ya.A., Serzhanov V.V., Abramov F. V. (2023) Napiv formalʹni pravyla, yak chynnyk dynamiky efektyvnosti formalʹnykh pravyl finansovoho monitorynhu [Semiformal rules as a factor in the dynamics of the effectiveness of formal financial monitoring rules]. Biznes Inform, no. 1, pp. 12–17.
Abramov F. V. (2022) Napivformalʹni pravyla yak chynnyk dynamiky efektyvnosti formalʹnykh pravyl [Semi-formal rules as a factor in the dynamics of the effectiveness of formal rules]. Tsyfrova ekonomika ta ekonomichna bezpeka, vol. 3(03), pp. 26-30.
Abramov F.V. (2023) Faktory poshyrennya koruptsiyi v bez·hotivkovomu suspilʹstvi [Factors of the spread of corruption in a cashless society]. Skhidna Yevropa: ekonomika, biznes ta upravlinnya, vol. 4 (41), pp. 3-8.
