Measuring the economic impact of beneficial ownership transparency (summary report)

  • Publication date: 16 May 2022
  • Authors: Oxford Insights, Lateral Economics, Open Ownership

Where might a quantitative economic analysis of beneficial ownership transparency be relevant?

A number of experts we spoke with were sceptical about the need for detailed measurement of the economic benefits of BOT, because existing evidence suggests these benefits are large, or that BOT is implemented for non economic reasons.

Some experts we spoke to were sceptical about the need for quantitative evidence to support BOT reform at all. Economists, for example, drew attention to a large body of empirical evidence surrounding BOT’s wider benefits, arguing that this existing research is likely sufficient when looking to make the economic case for reform. [10]

This existing evidence comes in three main forms, and is discussed in more detail in our main report. First, numerous studies point to the scale and importance of the problems that BOT can help address. These include the large costs of corruption, tax evasion, and money laundering with its associated contributions to organised crime and terrorism. Second, studies of related interventions in financial transparency indicate that past reforms have reduced the scale of these problems and realised economic benefits. Third, BOT is understood as one of the most important missing pieces – according to some authors, the "lynchpin" – in the institutional structure supporting financial transparency. [11] The logic of institutional design is frequently a key driver of policy change. In combination, these three types of evidence already allow economists to tell a coherent story about the benefits of reform.

Some interviewees also questioned whether quantifying economic benefits would be a major driver of reform in this policy area, pointing out that a number of governments have already been able to push forward BOT regimes without being able to place monetary values on projected benefits. One interviewee suggested that countries were much more likely to implement a BOT regime due to international pressure – such as the EU’s 5th Anti Money Laundering Directive, or fear of FATF greylisting – than because of economic benefits specifically generated by BOT, and was doubtful that quantifying benefits would lead to further reform. [12]

Nonetheless, we heard that measuring the economic benefits of BOT is still likely to be important for some, particularly government treasuries looking to justify the costs of an intervention or to raise the priority of BOT with respect to other anti-corruption reforms.

While some interviewees were more sceptical about the need for hard numbers to support BOT policies, others pointed to specific groups who would be receptive to further quantification of the benefits of reform in this area. Governments, and particularly government treasuries, were repeatedly identified as one such group, given their role justifying the economic spend needed for reforms by conducting cost benefit analyses.

It was also suggested that quantifying economic benefits of BOT might be particularly relevant to lower-income countries with scarce public resources, for whom implementation costs need more financial justification. [13] One interview in particular highlighted the need for quantification amongst governments looking to finance BOT reforms through loans from international development banks. [14] It was suggested that impact quantification would support ministries of finance, as it would demonstrate that an investment in BOT will not just have positive social impacts but also bring about economic benefits that facilitate the repayment of the loan.

We also heard that better means of measuring the impacts of BOT could help treasuries to justify pursuing BOT over other reforms in the wider financial transparency or anti corruption toolkit, where benefits are easier to quantify. For instance, at present, it might be easier to justify using the budget to increase the capacity of an anti-corruption unit (where calculating benefits could be as simple as multiplying existing detection rates by an increase in capacity), as opposed to a BOT reform. In this sense, one expert suggested that BOT was “fighting an uphill battle” in terms of the challenges associated with assessing impact in this area compared with other reforms. [15]

Quantitative estimates of economic benefits are also likely to be relevant to the private sector, given that businesses bear most of the regulatory burden of BOT reform.

Most of the regulatory burden of BOT registers falls on the private sector in the form of costs of compliance. Businesses need to commit time and resources to familiarising themselves with regulation, and to reporting their information to a register. In the UK context, a Post Implementation Review of the UK’s PSC register estimates these costs at £649m of one-off costs for UK businesses to familiarise themselves with regulation, collect and submit information, and £87.2 million in annual costs for companies to maintain records and report updates to Companies House. [16]

In light of these costs, it is perhaps unsurprising that business communities in particular have called for more economic evidence in favour of BOT. One expert we interviewed alluded to difficulties advocating for BOT amongst industry specialists without being able to quantify economic gains. [17] They claimed that the broader social value arguments, which posit that BOT is crucial to public integrity, preventing corruption and reducing financial crime, were readily dismissed in the private sector, and that being able to point to robust estimates of the benefits of BOT would be a “game changer” for advocacy organisations working in this context. [18]


[10] Discussions with economist experts, February 2022.

[11] Sharman, J.C. (2011). Testing the Global Financial Transparency Regime, International Studies Quarterly. Volume 55, no. 4.

[12] Interview with academic expert, January 2022.

[13] Interview with academic subject matter expert, January 2022; Interview with BOT advocacy organisation, January 2022.

[14] Interview with subject matter experts, March 2022.

[15] Ibid.

[16] BEIS. (2019). Post-Implementation Review of the People with Significant Control Register.

[17] Interview with BOT advocacy organisation, January 2022.

[18] Interview with BOT advocacy organisation, January 2022.

Next page: What has already been done to measure the economic impacts of beneficial ownership transparency?