4 March 2026 - Each year, illicit financial flows divert vast public resources away from classrooms, hospitals and climate action, shrinking the fiscal space countries need to serve their people. Following ECOSOC’s first-ever Special Meeting on Financial Integrity last month, Nobel Laureate in Economics Joseph Stiglitz reflected on why financial integrity matters now and who is most affected when global rules fall short.
The meeting, a concrete outcome of the Sevilla Commitment adopted last June at the Fourth International Conference on Financing for Development, brought together leading institutions across tax cooperation, anti-money-laundering and anti-corruption to strengthen coordination. Their discussion focused on how to get and use information to tackle tax abuses and financial crimes. And ultimately, considered how global financial rules can deliver fairer and more sustainable outcomes for all.
To dive deeper into this topic, we spoke with Joseph Stiglitz, Nobel Laureate in Economic Sciences, and Professor at Columbia University, who weighed in on why financial integrity matters and what stronger international cooperation could mean for building a more transparent and accountable global system.
Many see financial integrity as a complex, technical issue. Why should it matter to everyone?
“When vast amounts of wealth can be hidden, shifted, or stolen with impunity, we should not be surprised that trust in institutions erodes, inequality widens, and democracy itself comes under strain.
Weak financial integrity fuels extreme inequality by allowing those at the top to escape taxation, steal public resources, hide assets, and launder money while ordinary citizens pay the price.
It undermines climate action by depriving governments of the fiscal space needed for the green transition. It weakens sovereignty, as states lose control over their natural resources, their own tax bases and policy choices. And it corrodes democracy, as economic power is translated into political power, often behind closed doors and beyond public scrutiny.
That is why financial integrity is not a technical issue to be postponed for better times. It is a precondition for addressing the defining challenges of our age.”
How should governments take action on financial integrity?
“This problem is far bigger than any one country or any one leader.
We are discussing financial integrity at a moment when multilateralism itself is under attack. Around the world, there are forces seeking to divide us, to weaken international cooperation, and to replace collective problem-solving with narrow national or private interests.
Defending multilateralism, therefore, is not an abstract exercise, but a practical necessity.
Financial integrity and transparency cannot be achieved by any country acting alone, no matter how powerful. Unilateral action is important, but without cooperation and coordination it will always be incomplete and vulnerable to circumvention.
The race to the bottom in taxation, the competition to attract hidden wealth, and the tolerance of secrecy jurisdictions are collective action failures. They can only be resolved collectively.”
This still seems very complex to tackle effectively. How can governments even find solutions?
“We are not starting from scratch. There is already a remarkable convergence of analysis. The UN FACTI Panel made clear: tax abuse, corruption, and financial secrecy are not isolated failures. They are systemic features of the global financial system.
Likewise, the G20 Global Inequality Report, which I had the honor to chair, showed that weak financial transparency and fragmented tax cooperation are central mechanisms through which inequality is produced and sustained, between and within countries.
The problem is not a lack of solutions. It is a lack of resolve to implement them.”
What are some of the concrete steps that countries should take?
“First, transparency must become the rule rather than the exception. This means full and public disclosure of who owns what and where. Beneficial ownership registries—covering companies, trusts, foundations, and similar vehicles—must be mandatory, verified, and accessible. It means moving toward global asset registries that allow tax authorities to identify and track wealth across borders. It also means public country-by-country reporting by multinational corporations, so profits, taxes paid, and real economic activity can no longer be hidden behind accounting fictions.
Second, international tax cooperation must be strengthened. Both the FACTI Panel and the G20 report underscore the need for coordinated approaches that ensure income is taxed where economic activities take place, and that minimum effective taxation standards apply in practice, not just on paper. Information exchange must be automatic, inclusive, and usable by all countries, not restricted to a privileged few.
Third, illicit financial flows must not be treated as an unfortunate by-product of globalization. This requires common definitions, shared data, and coordinated enforcement. It also requires holding accountable the professional enablers—banks, law firms, accounting firms—whose business models too often depend on facilitating opacity. Without addressing these enabling structures, enforcement will always lag behind abuse.”
Do you have any final thoughts on how financial integrity contributes to sustainable development?
“Financial integrity is not a narrow compliance agenda; it is about reclaiming the capacity of democratic states to govern in the public interest to deliver public services. The taxation of capital and the super-rich must work as a unifying strategy for mobilizing democratic forces. It is about ensuring that those who benefit most from globalization contribute their fair share. And it is about creating the fiscal and institutional foundations for a more equal, sustainable, and resilient world.”
For more information: ECOSOC special meeting on financial integrity
UN DESA’s Financing for Sustainable Development Office (FSDO) supports the intergovernmental process on financing for development, including the annual ECOSOC Forum on Financing for Development Follow-up and related Special Meetings under the auspices of the Economic and Social Council (ECOSOC). Learn more about this work here.