International Journal of Social Science & Economic Research
Submit Paper



|| ||

1. Assistant Professor of Economics at High School of Commerce, University of Sfax, Tunisia.
2. Ph.D of Economics, University of Sfax, Tunisia.
3. Professor of Economics at High School of Commerce, University of Sfax, Tunisia.

MNIF, Afef TRABELSI, et al. "THE ROOT CAUSES OF CAPITAL FLIGHT IN TUNISIA: AN EMPIRICAL INVESTIGATION." Int. j. of Social Science and Economic Research, vol. 3, no. 9, Sept. 2018, pp. 5270-5294, Accessed Sept. 2018.
MNIF, A., KHARRAT, O., & FEKI, R. (2018, September). THE ROOT CAUSES OF CAPITAL FLIGHT IN TUNISIA: AN EMPIRICAL INVESTIGATION. Int. j. of Social Science and Economic Research, 3(9), 5270-5294. Retrieved from
MNIF, Afef TRABELSI, Olfa KHARRAT, and Rochdi FEKI. "THE ROOT CAUSES OF CAPITAL FLIGHT IN TUNISIA: AN EMPIRICAL INVESTIGATION." Int. j. of Social Science and Economic Research 3, no. 9 (September 2018), 5270-5294. Accessed September, 2018.

[1]. Afef Mnif Trabelsi (2017): Political Uncertainty and behavior of Tunisian Stock Market cycles: structural unobserved components time series models, Research in International Business and Finance (2017), pp. 206-214
[2]. Ajayi, I.S., (1997), "An analysis of external debt and capital flight in the severely indebted low income countries in sub-Saharan Africa". Working Paper No. 97/68. International Monetary Fund, Washington D.C
[3]. Alam M, Quazi R., (2003), "Determinants of capital flight: an econometric case study of Bangladesh", International Review of Applied Economics 17: 85-103.
[4]. Arezki, Rabah&Bruckner, Markus, 2011. "Oil rents, corruption, and state stability: Evidence from panel data regressions," European Economic Review, Elsevier, vol. 55(7), pages 955-963.
[5]. Bai, Chong-En, and Shang-Jin Wei. 2000. "Quality of bureaucracy and open economy macro policies." NBER Working Paper 7766. NBER, Cambridge, MA.
[6]. Blanchard, O., Dell’Ariccia, G. and Mauro, P. (2010), "rethinking macroeconomic policy", IMF Working paper.
[7]. Bouchet, M. H., 1986,"Capital flight in Latin America". Washington D.C.: Institute of International Finance, Mar. 21
[8]. Boyce, J.K and Ndikumana, L., (1992), "The revolving door? External debt and capital flight: Philippine case study". World Development 20 (3): 335-49.
[9]. Boyce, J.K. and Ndikumana, L. (2001), "Is Africa a Net Creditor? New Estimates of Capital Flight from Severely Indebted Sub-Saharan African Countries, 1970-1996", Journal of Development Studies, 38(2), 27-56.
[10]. Boyce, J.K et Ndikumana,L. (2002). "Public Debts and Private Assets: Explaining Capital Flight from Sub-Saharan African Countries." PERI Working Paper
[11]. Boyce, J.K and Ndikumana, L. (2008)."New Estimates of Capital Flight from Sub-Saharan African Countries: Linkages with External Borrowing and Policy Options," Working
[12]. Papers wp166, Political Economy Research Institute, University of Massachusetts at Amherst.
[13]. Cheung,Y., Qian, X., (2010), "Capital flight: Chinas experience". Review of Development Economics 14: 227-247
[14]. Chunhachinda, Pornchai, and KulpatraSirodom (2007), "Determinants of Asian Capital Flight and the Impact of 1997", Economic dynamism of Asia in the new millennium, Singapore: World Scientific, ISBN 9812568980, p. 1-29.
[15]. Collier P., Hoeffler A. and Pattillo C., (1999, 2001) "Flight Capital as a Portfolio Choice", World Bank Policy ResearchWorking Paper, n'2066, February 1999, and World Bank Economic Review, Vol. 15, N'. 1, pp. 55-80, Washington, D.C., 2001
[16]. Cuddington, J.T. (1986), "Capital flight: Estimates, issues, and explanations", Princeton Studies in International Finance,n'58, Department of Economics, International Finance section, Princeton University, N.J., 44p.
[17]. Cuddington, J.T. (1987), "Macroeconomic Determinants of Capital flight: An econometric investigation", In Lessard, D.R. and Williamson, J. (eds), Capital Flight and Third World Debt, pp. 85-96. Washington, D.C.: Institute for International Economics.
[18]. Dooley, M., Helkie, W., Tyron, R. and Underwood, J. (1986), "An Analysis of External Debt Positions of Eight Developing Countries Through 1990", Journal of Development Economics, 21 (2), 283-318.
[19]. Dooley, M (1988) "Capital flight: A response to differences in financial risks", IMF Working paper, Washington, D.C. July 18, 1988
[20]. Dornbusch, R. (1985), "Policy and Performance Links between LDC Debtors and industrial nations", Brookings Papers on Economic Activity, (2), 303-367.
[21]. Erbe, S. (1985), "The Flight of Capital from Developing Countries", Intereconomics, 20 (6), 268-275.
[22]. Forgha, G.N., (2008), "Capital Flight, Measurability and Economic Growth in Cameroon: An Econometric Investigation", International Review of Business Research Papers Vol. 4 No.2 March 2008 Pp.74-9.
[23]. Harrigan, J., G. Mavrotas. And Z. Yusop. (2007). On The Determinants Of Capital Flight: A New Approach. Journal of the Asian Pacific Economy, 7(2): 203 - 241.
[24]. Hermes, N., and R. Lensink (1992). 'The Magnitude and Determinants of Capital Flight: The Case for Six Sub-Saharan African Countries'. De Economist, 140 (4): 515-30.
[25]. Johansen, S. (1991), "Estimating and Hypothesis testing of Cointegrating Vectors Autoregressive Models", Econometrica, 59, 1551-1589.
[26]. Kant, C. (1996). 'Foreign Direct Investment and Capital Flight'.Princeton Studies in International Finance, 80. Princeton, NJ: Princeton University.
[27]. Le, Quan V., and MeenakshiR., 2006, Corruption and Capital Flight: An Empirical Assessment, International Economic Journal, Vol. 20, No. 4, pp. 523-540, December.
[28]. Lensink, R. Hermes,N. et Murinde,V. (July 1998) "The effect of financial liberalization on capital flight in African economies."World Development, Volume 26, Issue 7, Pages 1349-1368.
[29]. Lessard, D. R. and Williamson, J. (1987), "Capital Flight and Third World Debt", Journal of International BusinessStudies,19 (3),506-508.
[30]. Ljungwall C and Wang Z (2008)."Why is capital flowing out of China?", China Economic Review, 19, pp.359-372.
[31]. Mauro, P. (1998), "Corruption and the composition of government expenditure", Journal of Public Economics, 69, 263- 279.
[32]. Mesbahy. K (2002), "La corruption : un fait social total", Bulletin Economique et Social du Maroc. Rapport du Social 2002.
[33]. Morgan Guaranty Trust Company (1986), "LDC Capital flight", World Financial Markets, 13- 15.
[34]. Murinde, V., N. Hermes, and R. Lensink (1996),'Comparative Aspects of the Magnitude and Determinants of Capital Flight in Six Sub-Saharan African Countries', Savings and Development Quarterly Review, 20 (1): 61-78.
[35]. Murphy, K. M., Shleifer A. and Vishny, R. M. (1991), "The Allocation of Talent: Implication for Growth", QuarterlyJournal of Economics, 106(2), 503-530.
[36]. Murphy, K. M., Shleifer, A. and Vishny R. M. (1993), "Why is Rent Seeking So Costly to Growth?",AmericanEconomic Review, 83(2), 409-414.
[37]. Muscatelli, A., and A. H. Hallett (1992). 'How Successfully Do We Measure Capital Flight? Evidence from Five Developing Countries'.Journal of Development Studies, 28 (3): 538- 56.
[38]. National Commission of investigation on corruption and malfeasance (2011), "CNICM report", Tunisia, november 2011, 335p.
[39]. Ndikumana, L. and Boyce, J.K. (2003), "Public Debts and Private Assets: Explaining Capital Flight from Sub-Saharan African Countries", World Development, 31 (1), 107-130.
[40]. Ndikumana, L. and Boyce, J.K. (2011), "Capital flight from sub-saharan African countries : linkages with external borrowing and policy options", international Review of Applied Economics, 25 (2), 149-170.
[41]. Ndikumana, L. and Boyce, J.K. (2012), "Capital Flight from North African Countries", PERI Working Papers, October 2012, 17p.
[42]. Ndikumana, L. and Boyce, J.K. (2013), "La dette odieuse de l'Afrique : Comment l'endettement et la fuite des capitaux ont saigne un continent", Amalion Editions 2013, 208 p.
[43]. Nyong M.O. (2003), "Capital Flight and Economic growth in Four African Countries". Nigeria, Cote D'ivoire, Morroco and Ghana, DMO Monthly Seminar Series N'2, February.
[44]. Pastor, M. JR., (1990), "Capital flight from latin America", World Development, 18 (1), 1-18.
[45]. Schneider. B (2003), "Measuring Capital Flight: Estimates and Interpretations", working paper 194, Overseas Development Institute, London, UK, 92 p.
[46]. Sheets, N., (1995), "Capital flight from the countries in transition: some theory and Empirical evidence", International Finance Discussion papers, number 514, 48 p.
[47]. Shleifer, A. and Vishny, R.W. (1993), "Corruption", Quarterly Journal of Economics, 108, 599- 617. World Bank (1985), "World Development Report", Washington D.C, 259 p
[48]. Talahite, F., (2000), "Economie administree, corruption et engrenage de la violence en Algerie In: Tiers-Monde". 2000, tome 41 n'161. pp. 49-74.
[49]. Williams, I. (2005) "Corrupt practices: Implications for Economic Growth and Development of Nigeria", The Nigeria accountants, 38 (4), pp 44-50.

In this paper we analyze the root causes of Capital flight in Tunisia. So we determine whether there is a relationship between capital flight and some institutional and macroeconomic variables by using annual data between 1984 and 2014. The capital flight was used as dependent variable, measured by the Bank Deposit Approach which adopts an indirect proxy of capital flight in the sense of private wealth held abroad by resident as reported by the Bank for International Settlements. For estimation purposes, we use Ordinary Least Squares estimation method, cointegration test and ECM methods. Our results indicate that the major incentives for capital movement were corruption, political events, exchange rates overvaluation, and external debts use. This study opens up new insights for policies markers to implement the appropriate mechanisms in order to stop the massive capital outflows, repatriate flight capital and promote good governance for sustainable economic development.