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ILLICIT FINANCIAL FLOWS – this generally involves the cross-border transfer of money earned through illegal activities, and efforts to shelter wealth from a country’s tax authorities. The sources of the funds of these transfers come in three forms: corruption, such as bribery and theft by government officials; criminal activities, such as drug trading, human trafficking, illegal arms sales and more; and tax evasion and transfer mispricing. Also referred to as CAPITAL FLIGHT.

INCENTIVE – an inducement or stimulus (the carrot or the stick), that encourages someone to do something. Incentive theory provides a conceptual framework for analysing the role and potential of recruitment and promotion mechanisms, detection and penalties, and different wage systems in improving the efficiency of public agencies. It challenges, for instance, the simplistic view that pay increases will always reduce fraud in public administration. Note that an incentive might also be a bribe, persuading officials to return undue favours to the briber.

INTEGRITY – refers to adherence to a set of moral or ethical principles. An integrity system, therefore, is a political and administrative arrangement that encourages integrity. Embraced by individuals as well as institutions, it creates a barrier to corruption.

INTEGRITY PACT – an agreement intended to prevent corruption in public contracting. One of the parties represents a central, local or municipal government, a government’s subdivision or even a state-owned enterprise. The other party is usually a private company interested in obtaining the contract, or in charge of implementing it. In the processes related to the public project, such as bidding, contracting and implementing, both the administration and the company pledge not to bribe or take bribes, and agree to punishment should they break this pledge.

INTEREST PEDDLING – this occurs when a professional solicits benefits in exchange for using his influence to unfairly advance the interests of a particular person or party. Interest peddling is addressed through transparency and disclosure laws, which aim to expose suspect agreements. Also referred to as INFLUENCE PEDDLING.