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Shadow economies and corruption all over the world: revised estimates for 120 countries

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  • Schneider, Friedrich G.
  • Buehn, Andreas

Abstract

Estimations of the shadow economies for 120 countries, including developing, Eastern Europe and Central Asian and high income OECD countries over 1999 to 2006 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2004/05 in 76 developing countries is 35.5%, in 19 Eastern and Central Asian countries 36.7% and in 25 high income OECD countries 15.5%. An increased burden of taxation and social security contributions, combined with labour market regulations are the driving forces of the shadow economy. Furthermore, the results show that the shadow economy reduces corruption in high income countries, but increases corruption in low income countries. Finally, the various estimation methods are discussed and critically evaluated. --

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Bibliographic Info

Article provided by Kiel Institute for the World Economy in its journal Economics: The Open-Access, Open-Assessment E-Journal.

Volume (Year): 1 (2007)
Issue (Month): 9 (Version 2) ()
Pages: 1-53

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Handle: RePEc:zbw:ifweej:20079r

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Keywords: Shadow economy of 120 countries; tax burden; tax moral; quality of state institutions; regulation; MIMIC and other estimation methods;

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References

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Citations

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Cited by:
  1. Boysen-Hogrefe, Jens, 2010. "Ist Griechenland noch zu retten? Und der Euro?," Kiel Policy Brief 19, Kiel Institute for the World Economy (IfW).
  2. Raffaella Basile & Bruno Chiarini & Elisabetta Marzano, 2012. "Can we rely upon fiscal policy estimates in countries with unreported production of 15 per cent (or more) of GDP?," Working Papers 1, Department of the Treasury, Ministry of the Economy and of Finance.
  3. Silvio Contessi, 2012. "An application of conventional sovereign debt sustainability analysis to the current debt crises," Review, Federal Reserve Bank of St. Louis, issue May, pages 197-220.
  4. Johanna D'Hernoncourt & Pierre-Guillaume Méon, 2008. "The not so dark side of trust: does trust increase the size of the shadow economy?," Working Papers CEB 08-030.RS, ULB -- Universite Libre de Bruxelles.
  5. Dobson, Stephen & Ramlogan-Dobson, Carlyn, 2012. "Inequality, corruption and the informal sector," Economics Letters, Elsevier, vol. 115(1), pages 104-107.
  6. Vargas, Jose P Mauricio, 2012. "To be or not to be informal?: A Structural Simulation," MPRA Paper 41290, University Library of Munich, Germany.
  7. Gabriele Morettini & Andrea F. Presbitero & Massimo Tamberi, 2012. "Determinants of international migrations to Italian provinces," Economics Bulletin, AccessEcon, vol. 32(2), pages 1604-1617.
  8. Saul Estrin & Tomasz Mickiewicz, 2012. "Shadow Economy and Entrepreneurial Entry," Review of Development Economics, Wiley Blackwell, vol. 16(4), pages 559-578, November.
  9. World Bank, 2010. "Scaling-Up SME Access to Financial Services," World Bank Other Operational Studies 12515, The World Bank.
  10. Schneider, Friedrich, 2014. "The Shadow Economy and Shadow Labor Force: A Survey of Recent Developments," IZA Discussion Papers 8278, Institute for the Study of Labor (IZA).
  11. Miguel García-Posada & Juan S. Mora-Sanguinetti, 2012. "Why do spanish firms rarely use the bankruptcy system? The role of the mortgage institution," Banco de Espa�a Working Papers 1234, Banco de Espa�a.
  12. Dobson, Stephen & Ramlogan-Dobson, Carlyn, 2012. "Why is Corruption Less Harmful to Income Inequality in Latin America?," World Development, Elsevier, vol. 40(8), pages 1534-1545.
  13. Dan Andrews & Aida Caldera Sánchez & Åsa Johansson, 2011. "Towards a Better Understanding of the Informal Economy," OECD Economics Department Working Papers 873, OECD Publishing.

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