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Shadow economies and corruption all over the world: what do we really know?

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  • Schneider, Friedrich G.

Abstract

Estimations of the shadow economies for 145 countries, including developing, transition and highly developed OECD economies over 1999 to 2003 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2002/03 in 96 developing countries is 38.7%, in 28 transition countries 40.1% and in 21 OECD countries 16.3%. An increased burden of taxation and social security contributions, combined with a labour market regulation 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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Paper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2007-9.

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Date of creation: 2007
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Handle: RePEc:zbw:ifwedp:5523

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Keywords: shadow economy of 145 countries; tax burden; tax moral; quality of state institutions; regulation; DYMIMIC and other estimation methods;

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Cited by:
  1. Humphrey, David B., 2010. "Retail payments: New contributions, empirical results, and unanswered questions," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1729-1737, August.
  2. Mariya Aleksynska & Ahmed Tritah, 2011. "Occupation-Education Mismatch of Immigrant Workers in Europe: Context and Policies," Working Papers 2011-16, CEPII research center.
  3. Lipatov, Vilen, 2005. "Corporate Tax Evasion: the Case for Specialists," MPRA Paper 14181, University Library of Munich, Germany, revised Mar 2009.
  4. World Bank, 2013. "Pakistan : Finding the Path to Job-Enhancing Growth," World Bank Other Operational Studies 15979, The World Bank.
  5. Sheilagh Ogilvie, 2007. "'Whatever Is, Is Right'?, Economic Institutions in Pre-Industrial Europe (Tawney Lecture 2006)," CESifo Working Paper Series 2066, CESifo Group Munich.
  6. Niall O’Higgins, 2010. "Youth Labour Markets in Europe and Central Asia," Working Papers id:2740, eSocialSciences.
  7. Schneider Friedrich, 2010. "The Influence of Public Institutions on the Shadow Economy: An Empirical Investigation for OECD Countries," Review of Law & Economics, De Gruyter, vol. 6(3), pages 441-468, December.
  8. Buehn, Andreas & Schneider, Friedrich, 2009. "Corruption and the Shadow Economy: A Structural Equation Model Approach," IZA Discussion Papers 4182, Institute for the Study of Labor (IZA).
  9. Giorgio Gobbi & Roberta Zizza, 2007. "Does the underground economy hold back financial deepening? Evidence from the Italian credit market," LSE Research Online Documents on Economics 19731, London School of Economics and Political Science, LSE Library.
  10. Unal Zenginobuz & Sumru Altug, 2009. "What has been the Role of Investment in Turkey's Growth Performance?," Working Papers 2009/02, Bogazici University, Department of Economics.
  11. Andreas Bühn & Alexander Karmann & Friedrich Schneider, 2007. "Size and Development of the Shadow Economy and of Do-it-yourself Activities in Germany," CESifo Working Paper Series 2021, CESifo Group Munich.
  12. Silviu PRIPOAIE & Rodica PRIPOAIE, 2011. "The Tax Pressure Influence on Underground Economy Size in Romania between 2001-2010," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 64-69.
  13. Peichl, Andreas & Schneider, Hilmar, 2010. "Soziale Gerechtigkeit durch Leistung und Gegenleistung: Workfare im Niedriglohnbereich," IZA Standpunkte 25, Institute for the Study of Labor (IZA).
  14. Friedrich Schneider, 2012. "The Shadow Economy and Tax Evasion: What Do We (Not) Know?," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 13(2), pages 03-12, 07.
  15. Alexandru Adriana Anamaria & Dobre Ion & Ghinararu Catalin, 2009. "Estimating The Size Of Romanian Shadow Economy Using The Currency Demand Approach," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 2(1), pages 623-631, May.
  16. Sørensen, Jens Fyhn Lykke, 2011. "Undeclared work: A dark side of social trust?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 888-894.
  17. Eugene Amromin & Sujit Chakravorti, 2007. "Debit card and cash usage: a cross-country analysis," Working Paper Series WP-07-04, Federal Reserve Bank of Chicago.
  18. Junko Koeda & Era Dabla-Norris, 2008. "Informality and Bank Credit: Evidence from Firm-Level Data," IMF Working Papers 08/94, International Monetary Fund.
  19. Era Dabla-Norris & Gabriela Inchauste, 2007. "Informality and Regulations: What Drives Firm Growth?," IMF Working Papers 07/112, International Monetary Fund.
  20. Mason, Nicole M. & Jayne, T.S. & Chapoto, Antony & Donovan, Cynthia, 2011. "Putting the 2007/2008 global food crisis in longer-term perspective: Trends in staple food affordability in urban Zambia and Kenya," Food Policy, Elsevier, vol. 36(3), pages 350-367, June.
  21. Strand, Jon, 2009. ""Revenue management"effects related to financial flows generated by climate policy," Policy Research Working Paper Series 5053, The World Bank.

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