Measuring the economic impact of beneficial ownership transparency

A report by Oxford Insights, Lateral Economics and Open Ownership        

We have just published a summary and full report investigating the impact, and benefits, of beneficial ownership transparency to the economy. It was co-authored with Oxford Insights and Lateral Economics and we are grateful for their diligent research and analysis.

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?

The findings and recommendations in this report are not exhaustive. Instead, the report is an exploratory study which tackles some of the conceptual questions around measuring impact in this policy area. It also presents a landscape of potential options for quantifying impact in the future. We hope that this work will be a useful starting resource for governments, international organisations and civil society stakeholders with an interest in strengthening the economic case for BOT.

Concluding recommendations

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 implementing BOT reforms should conduct impact assessments and publish their findings to help understand the economic case for 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 contribute to an effective disclosure system.

6. The Financial Action Task Force could 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.

The full report is available online, or as a downloadable PDF:

You may also wish to read our recent publication 'Designing sanctions and their enforcement for beneficial ownership disclosure' which can be accessed here: