The Nature Of The Underground Economy. Some Evidence From Oecd Countries
AbstractEconomic theory suggests that taxation, regulations, efficiency of the bureaucracy and corruption are among the causes of the underground economy. The association between these variables is investigated by using panel regression techniques. The results show that, for OECD countries in the 1990s, the underground economy was positively correlated mainly with institutional failures and, to a lesser extent, with taxation and market regulations. Reflecting a sustained expansion of their public sectors, many OECD countries have raised the tax burden up to late 1990s and improved their institutions. This has led regulations and taxation, excluding social contributions, to increase their association with the shadow economy in the area.
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Bibliographic InfoPaper provided by ISTAT - Italian National Institute of Statistics - (Rome, ITALY) in its series ISAE Working Papers with number 26.
Length: 24 pages
Date of creation: Nov 2003
Date of revision:
Taxation; Corruption; Regulations; Legal system; Underground economy.;
Find related papers by JEL classification:
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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