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Informal sector gouvernance and regulation


  • Mohamed Jellal

    () (Al Makrîzi Institut d''Economie)


In this paper, we present a model of tax evasion in the presence of imperfect auditing. We show that there is a clear link between the degree of observability associated with respect to fiscal agency. We also show that the degree of observability is critical in determining the optimal regulation policies to be followed by the fiscal authorities. Our imperfect monitoring approach provides a new strategy for understanding the informal sector in developing countries, which can be interpreted as that group of economic activities characterized by low observability.

Suggested Citation

  • Mohamed Jellal, 2010. "Informal sector gouvernance and regulation," Economics Bulletin, AccessEcon, vol. 30(1), pages 683-691.
  • Handle: RePEc:ebl:ecbull:eb-09-00483

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    More about this item


    governance; regulation; imperfect auditing; tax evasion; informal sector;

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development


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