Measuring the economic impact of beneficial ownership transparency (summary report)

Executive summary

Existing literature makes a strong case for beneficial ownership transparency (BOT), particularly when it comes to tackling issues such as money laundering and other illicit financial flows. To date, however, little research has sought to quantify the economic benefits of BOT reform. This is a potential obstacle for informed policy making.

Between January and March 2022, Oxford Insights and Lateral Economics conducted research for Open Ownership to help understand:

• What economic benefits can we expect from beneficial ownership transparency policies?
• How can we measure their extent?
• What has been done so far to measure the economic impact of BOT?
• How might quantitative evidence be used to advance BOT policymaking in the future?

This summary report provides high level insights into our full report, an exploratory study which tackles some of the conceptual questions around measuring impact in this policy area. It also presents potential options for quantifying future impact. Whilst this work is not exhaustive, we hope that it will be a useful starting resource for governments, international organisations and civil society stakeholders with an interest in assessing the economic case for BOT.

Headline findings

1. Quantifying the economic benefits of BOT are likely to be important to certain interest groups, particularly government treasuries as well as private sector businesses.
2. Existing literature already builds a strong logical case for BOT, which, when combined with the economic evidence available, strongly implies that the economic benefits of effectively implemented BOT significantly outweigh its associated costs.
3. Estimations of particular benefit types are likely to be more robust than large scale complex models at this stage. As such, any attempts to measure the economic benefits of BOT should focus on quantifying specific benefits, rather than the aggregate economic impact of BOT.
4. There are a number of survey-based, correlational and causational approaches that could be used to track the economic benefits of BOT reform.
5. Approaches to measurement, however, often involve trade-offs between how feasible it is to conduct an approach in the short-term, and its methodological robustness.
6. Currently, the most readily feasible approaches for measuring the value of beneficial ownership transparency interventions are survey-based. These methods could be employed both in jurisdictions where BOT has been implemented, and jurisdictions without a BOT regime in place.
7. Correlational and causal studies could also be possible in the longer term across countries with BOT regimes already in place. Findings generated by causal studies have the potential to be particularly robust, but these approaches would be both timely and costly to conduct and would only be possible where groundwork has been laid in terms of early data collection.

Recommendations

In light of the research conducted in this report, we set forth the following key considerations for governments, international organisations and civil society stakeholders.

1. Whilst for many jurisdictions the available economic evidence already justifies the associated costs of beneficial ownership transparency, some of the methodologies outlined in this report would strengthen the understanding of the economic impacts of BOT in the short-term. Governments in particular should consider strategically employing the most cost-effective of these approaches to fill in the gaps in the existing evidence base.
2. Focusing on particular benefit types in relation to specific policy goals is likely to be the most practical approach to studying the economic benefits of BOT.
3. Governments conducting quantitative impact assessments in this space should publish their findings to help build the evidence base for the economic impact of BOT across jurisdictions.
4. In order to support more robust research to quantify the impacts of BOT in the future, and for their own monitoring and evaluation purposes, governments need to start tracking baseline data points now.
5. As the BOT policy area matures, further work should consider how specific design elements may lead to specific economic benefits. Future research is needed to understand the evidence not just for BOT in its broadest sense, but for the specific aspects of BOT implementation which amount to effective disclosure.
6. The Financial Action Task Force should play a role in supporting countries seeking to track the impact of BOT reform by publishing guidance around collecting and analysing statistical evidence for BOT.

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