IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The (Underground) Wealth of Nations

  • Bovi Maurizio

One school of thought associates the presence of hidden economy mainly with taxation. An alternative view underlines the importance of institutional failures, such as excessive regulations, inefficiency of the bureaucracy and corruption. A simple theoretical model is developed to analyse the joint behaviour of these variables. It suggests that a continuum of equilibria can emerge. Each equilibrium is characterised by different levels of underground economy. The optimal shares of shadow economy have a different nature as well, institutional-pushed vs. tax-pushed, and all of them are strictly positive. The former finding reconciles the alternative views about the main causes of the irregular economy; the latter calls for the presence of a natural rate of shadow economy. Empirical evidence for the OECD countries broadly supports the model.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.rivisteweb.it/download/article/10.1429/12923
Download Restriction: no

File URL: http://www.rivisteweb.it/doi/10.1429/12923
Download Restriction: no

Article provided by Società editrice il Mulino in its journal Politica economica - Journal of Economic Policy (PEJEP).

Volume (Year): (2004)
Issue (Month): 1 ()
Pages: 117

as
in new window

Handle: RePEc:mul:je8794:doi:10.1429/12923:y:2004:i:1:p:117
Contact details of provider:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:mul:je8794:doi:10.1429/12923:y:2004:i:1:p:117. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.