Effects of Illicit Financial Flows on Violent Conflict in Sub-Saharan Africa: The Role of Regime Durability

The aim of this article is to analyze the role of regime durability in the relationship between illicit financial flows and violent conflict. The panel data used cover the analysis period from 2009 to 2018 on sub-Saharan African (SSA) countries. The estimation method used is Wang's nonlinear method. Results show that illicit financial flows increase violent conflict. First, illicit financial flows reduce violent conflict when regime durability is below the 22-year threshold. In a second stage, illicit financial flows increase violent conflict when the sustainability of the regime exceeds the 22-year threshold. In terms of economic policy implications, governments and policymakers are encouraged to reduce illicit financial flows by controlling false invoicing of exports and imports. They are also invited to reduce the number of years that regimes are in power in order to facilitate the reduction of illicit financial flows and violent conflicts.