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Exploring patterns of beneficial ownership reform

Angus Barry

DPhil Researcher,

Blavatnik School of Government

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Strengthened FATF beneficial ownership recommendations, alongside 4th Round Mutual Evaluations
Inclusion of beneficial ownership transparency in the UN Convention Against Corruption
G7 Finance Ministers Communiqué on tackling illicit finance
IMF inclusion of beneficial ownership reforms in Covid recovery loans, and World Bank support
New corporate transparency laws across advanced industrial democracies: US Corporate Transparency Act; UK Economic Crime Bill; EU’s Anti-Money Laundering Directives

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Coercion, in which countries adopt policies to avoid punishment;
Mimicry, in which countries adopt policies for legitimacy, for example to signal governance maturity;
Competition, for example by undercutting other countries with lower tax rates;
Learning, in which policymakers replicate successful policies from other countries.

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International factors:

Experience of FATF greylisting may incentivise BOT reforms

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Domestic political economy:

More democratic countries are more likely to implement beneficial ownership transparency reforms

Independent variable	Democratic participation	Electoral democracy	Electoral democracy	Political stability	Civil society strength	Civil society strength
Measure	(V-Dem 2019)	(V-Dem 2019)	(Freedom House 2019)	(World Bank 2021)	(V-Dem 2019)	(World Bank 2019)
Correlation with Company Information score	0.224	0.225	0.253	0.163	0.164	0.250
Statistical significance at 10%	Yes	Yes	Yes	Yes	Yes	Yes

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The effects of domestic policy impact on BOT reforms appear to be conditional on the level of democracy

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	Government effectiveness	Government effectiveness – technology	Legal framework	Legal framework	Size of the informal economy
Measure	World Bank 2019	Internet penetration (World Bank 2019)	Regulatory quality (World Bank 2021)	Rule of law (World Bank 2021)	World Bank 2019
Correlation with Company Information score	0.495	0.351	0.423	0.388	-0.102
Statistical significance at 10%	Yes	Yes	Yes	Yes	No

There are also correlations between BOT reforms, and governance and legal capacity, including after controlling for GDP per capita

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	Coefficient	Standard Error	t-stat	Standard Coefficient	p-value
b	14.74	2.74	5.38	0.00	0.00
Experience of greylisting in the previous decade	6.27	4.66	1.35	0.14	0.18
Civil society participation	-3.07	2.87	-1.07	-0.17	0.29
Government effectiveness	11.90	2.79	4.26	0.55	0.00
Interaction of Corruption perceptions and Electoral democracy	0.12	0.07	1.61	0.22	0.11

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South Africa: As Simple as FATF?

?

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By passing the [GLA Act], this house demonstrates its commitment to not only addressing the issues which risk the greylisting by FATF, but more importantly, this government’s commitment to rooting out and preventing financial crime and the proceeds of corruption.

Enoch Godongwana, Minister of Finance

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Theoretical framework based on other areas of global governance and early experience of beneficial ownership reform

Exploratory quantitative analysis using the Global Data Barometer’s 2021 Company Information dataset

South Africa case study

Indonesia case study

Predictive quantitative analysis using the Global Data Barometer’s 2025 Company Information dataset

The more we can understand what factors are associated with beneficial ownership reforms, the more effectively we can support it.

Conclusions: Cross-country comparisons and implications for internal and external actors supporting BOT reforms