What is capital flight?

Capital flight is the transfer of savings from developing countries to industrially advanced countries in order to avoid government expropriation, taxation, or higher rates of inflation, or simply to realize greater returns on financial investments. Many wealthy citizens of DVCs have used their savings to invest in the more economically advanced nations, enabling them to avoid the high investment risks at home. Capital flight offsets much of the IAC's lending and granting of financial aid to developing nations.