The leading digit distribution of the worldwide Illicit Financial Flows

Abstract

Benford's law states that in data sets from different phenomena leading digits tend to be distributed logarithmically such that the numbers beginning with smaller digits occur more often than those with larger ones. Particularly, the law is known to hold for different types of financial data. The Illicit Financial Flows (IFFs) exiting the developing countries are frequently discussed as hidden resources which could have been otherwise properly utilized for their development. We investigate here the distribution of the leading digits in the recent data on estimates of IFFs to look for the existence of a pattern as predicted by Benford's law and establish that the frequency of occurrence of the leading digits in these estimates does closely follow the law.

13 pages, 10 figures, 6 tables, additional data analyis

References in corpus (4)

• Law of the leading digits and the ideological struggle for numbers
• Benford's law predicted digit distribution of aggregated income taxes: the surprising conformity of Italian cities and regions
• The Benford law behavior of the religious activity data
• First Digit Distribution of Hadron Full Width

Cited by in corpus (6)

• Benford's law predicted digit distribution of aggregated income taxes: the surprising conformity of Italian cities and regions
• Data science for assessing possible tax income manipulation: The case of Italy
• The Benford law behavior of the religious activity data
• Benford's laws tests on S&P500 daily closing values and the corresponding daily log-returns both point to huge non-conformity
• Intriguing behavior when testing the impact of quotation marks usage in Google search results
• Note on pre-taxation reported data by UK FTSE-listed companies. A search for Benford's laws compatibility