Multidimensional analysis of interrelationships between money laundering risks, state vulnerability, and institutional transformation: Synergistic security effects

Olha Kovalchuk; Ruslan Shevchuk; Serhiy Banakh; Nataliia Holota; Bogdan Adamyk; Vladlena Benson

doi:10.1080/23322039.2026.2641296

Multidimensional analysis of interrelationships between money laundering risks, state vulnerability, and institutional transformation: Synergistic security effects

Olha Kovalchuk
, Ruslan Shevchuk
, Serhiy Banakh
, Nataliia Holota
, Bogdan Adamyk^*
, Vladlena Benson

^*Corresponding author for this work

West Ukrainian National University
University of Bielsko-Biala
Ternopil National Economic University

Research output: Contribution to journal › Article › peer-review

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Abstract

The article examines the interrelations among the key determinants of anti-money laundering (AML) systems, including money laundering risks, state vulnerability and institutional transformation, in the context of their legal regulation, aiming to identify systemic patterns in security challenges. An integrated methodological approach is applied, combining correlation analysis, correspondence analysis and quadratic modeling to explore the interdependencies between the quantitative measures of these determinants–the Basel AML Index (AMLI), the Fragile States Index (FSI), and the Bertelsmann Transformation Index (BTI). Statistical analysis revealed strong correlations: a positive relationship between AMLI and FSI (r = 0.70), and inverse relationships between AMLI and BTI (r = –0.81) and FSI and BTI (r = –0.77), all statistically significant (p = 0.00). A three-dimensional quadratic model demonstrates nonlinear threshold effects, where small changes in institutional capacity produce disproportionate shifts in risk and combined vulnerabilities amplify threats exponentially. Three critical risk zones were identified: ‘double weakness’, ‘institutional collapse’ and ‘pseudo-stability’. A paradoxical effect of ‘compensatory regulation’ was observed, where weaker states intensify formal AML measures to offset institutional deficiencies. The economic determinism of security risks was confirmed, as higher-income countries tend to perform better in AML.

Original language	English
Article number	2641296
Number of pages	36
Journal	Cogent Economics & Finance
Volume	14
Issue number	1
Early online date	12 Mar 2026
DOIs	https://doi.org/10.1080/23322039.2026.2641296
Publication status	Published - 12 Mar 2026

Bibliographical note

Copyright © 2026 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.

Funding

This work was supported by the European Union’s Horizon 2024 research and innovation program under the Marie Skłodowska-Curie grant agreement No. 101235440–FORCE.

Funders	Funder number
European Union’s Horizon 2024 research and innovation program
H2020 Marie Skłodowska-Curie Actions	101235440

Keywords

Anti-money laundering
legal regulatory
Basel AML Index
Fragile States Index
Bertelsmann Transformation Index
multidimensional analysis

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10.1080/23322039.2026.2641296Licence: CC BY 4.0

Multidimensional analysis of interrelationships between money laundering risks state vulnerability and institutional transformation synergistic secu
Copyright © 2026 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.
Final published version, 4.28 MBLicence: CC BY 4.0

Cite this

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title = "Multidimensional analysis of interrelationships between money laundering risks, state vulnerability, and institutional transformation: Synergistic security effects",

abstract = "The article examines the interrelations among the key determinants of anti-money laundering (AML) systems, including money laundering risks, state vulnerability and institutional transformation, in the context of their legal regulation, aiming to identify systemic patterns in security challenges. An integrated methodological approach is applied, combining correlation analysis, correspondence analysis and quadratic modeling to explore the interdependencies between the quantitative measures of these determinants–the Basel AML Index (AMLI), the Fragile States Index (FSI), and the Bertelsmann Transformation Index (BTI). Statistical analysis revealed strong correlations: a positive relationship between AMLI and FSI (r = 0.70), and inverse relationships between AMLI and BTI (r = –0.81) and FSI and BTI (r = –0.77), all statistically significant (p = 0.00). A three-dimensional quadratic model demonstrates nonlinear threshold effects, where small changes in institutional capacity produce disproportionate shifts in risk and combined vulnerabilities amplify threats exponentially. Three critical risk zones were identified: {\textquoteleft}double weakness{\textquoteright}, {\textquoteleft}institutional collapse{\textquoteright} and {\textquoteleft}pseudo-stability{\textquoteright}. A paradoxical effect of {\textquoteleft}compensatory regulation{\textquoteright} was observed, where weaker states intensify formal AML measures to offset institutional deficiencies. The economic determinism of security risks was confirmed, as higher-income countries tend to perform better in AML.",

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author = "Olha Kovalchuk and Ruslan Shevchuk and Serhiy Banakh and Nataliia Holota and Bogdan Adamyk and Vladlena Benson",

note = "Copyright {\textcopyright} 2026 The Author(s). Published by Informa UK Limited, trading as Taylor \& Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.",

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AU - Shevchuk, Ruslan

AU - Banakh, Serhiy

AU - Holota, Nataliia

AU - Adamyk, Bogdan

AU - Benson, Vladlena

N1 - Copyright © 2026 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.

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N2 - The article examines the interrelations among the key determinants of anti-money laundering (AML) systems, including money laundering risks, state vulnerability and institutional transformation, in the context of their legal regulation, aiming to identify systemic patterns in security challenges. An integrated methodological approach is applied, combining correlation analysis, correspondence analysis and quadratic modeling to explore the interdependencies between the quantitative measures of these determinants–the Basel AML Index (AMLI), the Fragile States Index (FSI), and the Bertelsmann Transformation Index (BTI). Statistical analysis revealed strong correlations: a positive relationship between AMLI and FSI (r = 0.70), and inverse relationships between AMLI and BTI (r = –0.81) and FSI and BTI (r = –0.77), all statistically significant (p = 0.00). A three-dimensional quadratic model demonstrates nonlinear threshold effects, where small changes in institutional capacity produce disproportionate shifts in risk and combined vulnerabilities amplify threats exponentially. Three critical risk zones were identified: ‘double weakness’, ‘institutional collapse’ and ‘pseudo-stability’. A paradoxical effect of ‘compensatory regulation’ was observed, where weaker states intensify formal AML measures to offset institutional deficiencies. The economic determinism of security risks was confirmed, as higher-income countries tend to perform better in AML.

AB - The article examines the interrelations among the key determinants of anti-money laundering (AML) systems, including money laundering risks, state vulnerability and institutional transformation, in the context of their legal regulation, aiming to identify systemic patterns in security challenges. An integrated methodological approach is applied, combining correlation analysis, correspondence analysis and quadratic modeling to explore the interdependencies between the quantitative measures of these determinants–the Basel AML Index (AMLI), the Fragile States Index (FSI), and the Bertelsmann Transformation Index (BTI). Statistical analysis revealed strong correlations: a positive relationship between AMLI and FSI (r = 0.70), and inverse relationships between AMLI and BTI (r = –0.81) and FSI and BTI (r = –0.77), all statistically significant (p = 0.00). A three-dimensional quadratic model demonstrates nonlinear threshold effects, where small changes in institutional capacity produce disproportionate shifts in risk and combined vulnerabilities amplify threats exponentially. Three critical risk zones were identified: ‘double weakness’, ‘institutional collapse’ and ‘pseudo-stability’. A paradoxical effect of ‘compensatory regulation’ was observed, where weaker states intensify formal AML measures to offset institutional deficiencies. The economic determinism of security risks was confirmed, as higher-income countries tend to perform better in AML.

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KW - legal regulatory

KW - Basel AML Index

KW - Fragile States Index

KW - Bertelsmann Transformation Index

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IS - 1

M1 - 2641296

ER -

Multidimensional analysis of interrelationships between money laundering risks, state vulnerability, and institutional transformation: Synergistic security effects

Abstract

Bibliographical note

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Keywords

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