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Tackling the Propensity towards Undeclared Work: Some Policy Lessons from Croatia

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  • Williams Colin C.

    (Professor of Public Policy Management School, University of Sheffield, UK)

  • Franic Josip

    (Marie Curie Research Fellow Management School, University of Sheffield, UK)

Abstract

The aim of this paper is to evaluate contrasting policy approaches towards undeclared work. To do so, evidence is reported from 1,000 face-to-face interviews conducted in Croatia during 2013. Logistic regression analysis reveals no association between participation in undeclared work and the perceived level of penalties and risk of detection, but a strong association between participation in undeclared work and the level of tax morality. It thus confirms recent calls for the conventional direct controls approach, which seeks to deter engagement in undeclared work by increasing the penalties and risk of detection, to be replaced by an indirect controls approach which seeks to improve tax morality so as to encourage greater self-regulation and a culture of commitment to compliance. The implications for theory and policy are then discussed.

Suggested Citation

  • Williams Colin C. & Franic Josip, 2015. "Tackling the Propensity towards Undeclared Work: Some Policy Lessons from Croatia," South East European Journal of Economics and Business, Sciendo, vol. 10(1), pages 18-31, April.
    • Handle: RePEc:vrs:seejeb:v:10:y:2015:i:1:p:18-31:n:3
    DOI: 10.1515/jeb-2015-0003
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    Citations

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    Cited by:

    1. Krasniqi Besnik A. & Williams Colin C., 2017. "Explaining individual- and country-level variations in unregistered employment using a multi-level model: evidence from 35 Eurasian countries," South East European Journal of Economics and Business, Sciendo, vol. 12(2), pages 61-72, December.
    2. Josip FRANIC, 2020. "Why workers engage in quasi-formal employment? Some lessons from Croatia," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 11, pages 94-112, December.
    3. Ayşegül KAYAOĞLU & Colin C. WILLIAM, 2020. "Explaining Tax Non-Compliance from a Neo-Institutionalist Perspective: Some Lessons from a Public Opinion Survey in Turkey," Sosyoekonomi Journal, Sosyoekonomi Society.
    4. Colin C WILLIAMS & Slavko BEZEREDI, 2018. "Explaining informal entrepreneurship in South-East Europe: a tax morale approach," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 47-68, December.
    5. Colin Williams, 2020. "Evaluating Public Administration Approaches towards Tax Non-Compliance in Europe," Administrative Sciences, MDPI, vol. 10(3), pages 1-15, July.
    6. Colin C Williams & Slavko Bezeredi, 2017. "Explaining Consumers’ Motives for Purchasing from the Informal Economy: Some Lessons from a Study of Bulgaria, Croatia and FYR of of Macedonia," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 515-531, December.
    7. Williams Colin C. & Yang Junhong, 2017. "Evaluating the Use of Personal Networks to Circumvent Formal Processes: A Case Study of Vruzki in Bulgaria," South East European Journal of Economics and Business, Sciendo, vol. 12(1), pages 57-67, April.
    8. Colin C. Williams & Slavko Bezeredi, 2018. "An Institutional Theory Of Informal Entrepreneurship: Some Lessons From Fyr Macedonia," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 1-22, September.
    9. Lukasz Arendt & Wojciech Grabowski & Iwona Kukulak-Dolata, 2020. "County-Level Patterns of Undeclared Work: An Empirical Analysis of a Highly Diversified Region in the European Union," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(1), pages 271-295, May.
    10. Marko Crnogorac & Santiago Lago-Pe?as, 2019. "Tax evasion in the countries of Former Yugoslavia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 37(2), pages 823-851.
    11. C. Williams, Colin & Bezeredi, Slavko, 2017. "Evaluating The Use Of Personal Connections To Bypass Formal Procedures: A Study Of Vrski In Republic Of Macedonia," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 8(2), pages 169-182.
    12. Colin C Williams & Ioana A Horodnic, 2017. "Evaluating the policy approaches for tackling undeclared work in the European Union," Environment and Planning C, , vol. 35(5), pages 916-936, August.
    13. Grega Ferenc, 2022. "Schwarzarbeit in Ost­-, Westdeutschland und Slowenien – Ein Vergleich," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 29(06), pages 19-26, December.
    14. Colin Williams, 2020. "An Institutional Theory of Tax Non- Compliance in Bulgaria: a Tax Morale Approach," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 33-49, March.
    15. Bejaković Predrag & Bezeredi Slavko, 2019. "Determinants of Tax Morale in Croatia: an Ordered Logit Model," Business Systems Research, Sciendo, vol. 10(2), pages 37-48, September.
    16. Colin C. Williams & Slavko Bezeredi, 2021. "Explaining informal entrepreneurship in Croatia: a social actor approach," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 42(3), pages 348-368.
    17. Williams Colin C. & Gashi Ardiana, 2022. "Formal Institutional Failings and Informal Employment: Evidence from the Western Balkans," South East European Journal of Economics and Business, Sciendo, vol. 17(2), pages 83-95, December.
    18. Williams Colin C. & Bezeredi Slavko, 2018. "Explaining and Tackling Under-Declared Employment in FYR Macedonia: The Employers Perspective," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 19-31, December.

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