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The Shadow Economy and Morals: A Note

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  • Schlicht, Ekkehart

Abstract

If the established rules are obeyed spontaneously in an economy, this increases economic efficiency since the uncertainties, monitoring costs and incentive problems induced by opportunism can be avoided. Opportunism will be increasedby increasing the incentives for unlawful behaviour, however, and a slight increase in these incentives might cause a cumulative and self-nourishing breakdown of morals. The dangers of the growing shadow economy are louring here.

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Bibliographic Info

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This chapter was published in: Schlicht, Ekkehart , , pages , .

This item is provided by University of Munich, Department of Economics in its series Chapters in Economics with number 3140.

Handle: RePEc:lmu:muench:3140

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Related research

Keywords: shadow economy; business morality; critical mass; taxation; tax compliance;

References

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  1. Akerlof, George A, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 599-617, November.
  2. Schlicht, Ekkehart, . "Cognitive Dissonance in Economics," Chapters in Economics, University of Munich, Department of Economics.
  3. Schlicht, Ekkehart, 1981. "Reference Group Behaviour and Economic Incentives," Munich Reprints in Economics 10623, University of Munich, Department of Economics.
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Cited by:
  1. Jost, Peter-J, 2001. "Crime, coordination, and punishment: An economic analysis," International Review of Law and Economics, Elsevier, vol. 21(1), pages 23-46, March.
  2. Holger C. Wolf, 1993. "Anti-Tax Revolutions and Symbolic Prosecutions," NBER Working Papers 4337, National Bureau of Economic Research, Inc.

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