Institutional and regulatory barriers to capital repatriation in the CIS: comparative aspects
Abstract
In recent years, global initiatives have dramatically increased the transparency of financial transactions and complicated the flight of capital to offshore zones. In this context, many countries are faced with questions about finding ways to return capital from abroad for reinvestment in the national economy. This paper implies to conduct a comparative analysis of experience in capital repatriation issues using the example of four CIS countries–Russia, Kazakhstan, Tajikistan and Azerbaijan. For these purposes, it is envisaged to study political and legal measures in this sector within the framework of identifying existing problems and a general assessment of the effectiveness of the policy. All four CIS countries face the same challenges to varying degrees, the main ones being legal instability, weak guarantees for business protection, fragmented regulation and mistrust from both domestic and foreign capital. It can be argued that the experience of the Russian Federation, which traditionally sets the trend in fiscal policy and regulation for the countries of the Central Asian and Caspian regions, has not justified itself in the case of capital repatriation. For Kazakhstan, Azerbaijan, and Tajikistan, capital repatriation measures have led to a limited effect, not finding a holistic reflection at the regulatory level. These findings are interpreted through the lens of institutional economics, suggesting that weak property rights protection, regulatory inconsistency, and low institutional trust constrain the effectiveness of repatriation policies.