The Role and Effect of Indirect Demand for Proceeds of Corruption. By Noemi Gal-Or

  1. Introduction

Governments, international organisations and non-governmental organisations derive a considerable part of their understanding of corruption and how to counter it from independent research. So far, the supply side of corruption – consisting of those who are requested to provide the funds (and goods, services) in order to have their interests satisfied – has been studied extensively, particularly in the context of international development assistance,[1] while the demand aspect has remained comparatively understudied.[2] A welcome development is Transparency International’s (TI)[3] recent attention to the “beneficiary” – the natural person gaining from the corrupt transaction concealed behind the legal person’s veil.[4] In this paper, I deepen the analysis by examining the outer circle of beneficiaries, those indirectly profiting from, but necessary to, and one step removed from, the primary corrupt transaction.[5] This paper thus tackles the indirect demand side-effect of the corrupt transaction. It focuses on the beneficiary in the residential real estate sector in metropolitan cities who facilitates – deliberately or not, knowingly or not, the laundering hence integration of proceeds of corruption into the housing economy.

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The role and effect of indirect demand for proceeds of corruption – NG