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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.

Suggested Citation

  • Schlicht, Ekkehart, . "The Shadow Economy and Morals: A Note," Chapters in Economics,, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muench:3140
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    File URL: https://epub.ub.uni-muenchen.de/3140/1/3140.pdf
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    References listed on IDEAS

    as
    1. Schlicht, Ekkehart, 1980. "Reference Group Behaviour and Economic Incentives," Darmstadt Discussion Papers in Economics 2, Darmstadt University of Technology, Department of Law and Economics.
    2. Schlicht, Ekkehart, . "Cognitive Dissonance in Economics," Chapters in Economics,, University of Munich, Department of Economics.
    3. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 599-617.
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    Cited by:

    1. Bouwe R. Dijkstra, 2011. "Good and Bad Equilibria with the Informal Sector," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(4), pages 668-685, December.
    2. Holger C. Wolf, 1993. "Anti-Tax Revolutions and Symbolic Prosecutions," NBER Working Papers 4337, National Bureau of Economic Research, Inc.
    3. Andris Zimelis, 2020. "Corruption research: A need for an integrated approach," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 23(3), pages 288-306, September.
    4. 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.

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