Illicit Financial Flows, Violent Conflicts and Longevity in Power in Sub‐Saharan Africa

ABSTRACT The issue of illicit financial flows is attracting increasing attention. The aim of this article is to analyze the effects of illicit financial flows on violent conflicts, based on the length of time in power. The panel data used covers 42 sub‐Saharan African (SSA) countries and relates to the period from 2002 to 2023. In terms of methodology, the estimation technique favors Wang's method, which is very important in the analysis of non‐linear relationships with threshold effects. This work stands out from other studies in terms of methodology: recent data, an extended time horizon and an increased sample size. The results show that illicit financial flows significantly increase violent conflicts in two stages. In the first stage, a length of time in power below the threshold of 23 years contributes to a slight increase in the effects of illicit financial flows on violent conflicts. In the second stage, a length of time in power above the threshold of 23 years contributes to a sharp increase in the effects of illicit financial flows on violent conflicts. In terms of economic policy implications, the results suggest that public authorities in sub‐Saharan African countries should reduce false invoicing in order to mitigate illicit financial flows. In addition, the results suggest limiting presidential terms to two decades in order to reduce illicit financial flows and violent conflict.