Yes, but not necessarily in the way most people think. Peter Reuter addressed this question at the Center for Global Development last week based on research in Draining Development? Controlling Flows of Illicit Funds from Developing Countries – a volume that he edited for the World Bank. It is clearly the most thorough assessment to date in assessing the channels by which illicit flows affect development.
CGD Policy Blogs
This is a joint posting with Cindy Prieto.
Since the coup ousting Honduran president Manuel Zelaya last June, the international community has responded with strong words and a mix of mostly mild actions. The Organization of American States (OAS) unanimously voted to suspend Honduras when the de facto regime ignored its demand for the immediate reinstatement of Zelaya, and the UN General Assembly has also adopted a resolution denouncing the coup. The United States and European Union have halted some forms of non-humanitarian aid. But despite some calls for action , the United States and other major trade partners have yet to adopt trade sanctions or to freeze the coup leaders' assets.