Why financial integrity?

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The following is by Alex Cobham of Christian Aid and is reposted from the blog of the Task Force on Financial Integrity and Economic Development. Tax Research UK is a member of the Task force:

The Task Force on Financial Integrity and Economic Development has a problem. There are two common reactions when people hear about it. The first is ‚ÄòSnappy title.’ The second is ‚ÄòFinancial integrity? What’s that?’

Now, it’s true that the title is on the long side, but this shouldn’t in itself be a problem – if the name gives people an immediate understanding of what we do, and why it matters. And to be fair, the focus of the Task Force is – well, exactly what it says on the label. Each of the five recommendations we pursue aims to contribute to a globalisation with greater financial integrity, to support a more just and inclusive pattern of economic development.

No, it’s the second reaction people have which is the problem. ‚ÄòFinancial integrity? What’s that?’ It’s a problem for the Task Force if people aren’t clear what we do; but it’s a much bigger problem if we’re not able to communicate clearly the nature and importance of the goal of financial integrity. And if people don’t immediately understand what is meant by ‚Äòfinancial integrity’, it’s probably unlikely that they’re going all out to support it‚Ķ

More than that, a lack of clarity will undermine progress even where there is support. The coordinating committee of the Task Force, for example, includes Transparency International (TI) and the Tax Justice Network (TJN). TI blazed a trail in focusing international attention on weaknesses of financial integrity among public officeholders in developing countries, through their high-profile Corruption Perceptions Index. More recently, TJN (in partnership with Christian Aid) have published their Financial Secrecy Index which highlights a lack of integrity in the ‚Äòtax haven’ behaviour of jurisdictions large and small, rich and poor.

The work of others on the coordinating committee – Christian Aid, Eurodad, Global Financial Integrity, Global Witness, the Leading Group on Innovative Financing for Development, Tax Justice Network, Tax Research UK, and Transparency International – focuses on these and other aspects of financial integrity, from the transparency of multinational group accounts to the return of assets stolen from developing countries.

How then can the Task Force communicate more clearly the shared vision of financial integrity, in a way that accelerates real progress? One possibility which we are now exploring is that of an index. Task Force members have had significant success with their various indices in raising the profile and greater understanding of their aims, and ultimately in driving policy change.

Is it possible to rank countries, according to consistent data on a range of issues that reflect the perspectives of civil society, of the private sector, of other governments and of international organisations? How would you go about capturing and then combining, and balancing the different aspects of financial integrity, or a lack thereof, from opaque accounting to different tax haven practices, from grand political corruption to low-level graft, and so on?

The Task Force will therefore be exploring these issues in the coming months, and is keen to invite a range of views. If you or your organisation would like to take part in the initial consultation or subsequent discussions, please email info@financialtaskforce.org, or leave a comment below. Initial discussions will take place at the Task Force’s Annual Conference in Bergen next month.