It is generally agreed that understanding a problem is a major and most important step towards solving it. To better understand the problem of capital flight, we present a casual loop diagram (CLD) that integrates many of the available theories about capital flight in a cobweb of cause and effect relationship to holistically conceptualize this problem. The existing studies try to explain the problem from a single country perspective and try to identify its causes like indebtedness (Ndikumana and Boyce 2011), weak institutions and political systems including taxation and other laws (Schjelderup, Cappelen et al. 2009), and expropriation, inflation, or devaluations (Rojas-Suarez 1990). We draw analogy to the story of the blind men and an elephant originated in India and observe that all these studies are partial representation of the system. We argue that CLD provides a necessary template to conceptually map the existing theories to fully understand the problem to develop a holistic, integrated and unified policy framework at global level. The objective of this effort is to provide a template to identify a comprehensive set of variables of relevance so that sovereign states agree to develop an integrated and unified measuring and reporting system like SNA of UN.
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