Public Governance And The Underground Economy

In the real economy of a country, besides the formal or visible economy, there is also an informal or underground economy, the existence of which is a real challenge both for state authorities and for international organizations called to find solutions to limit the effects negative, which it causes to national economies and the global economy. Deciphering the nature of the underground economy, along with the main causes that generate and develop it, can provide pertinent responses to methods to counteract its negative consequences. This study attempts to answer a key question: is there any link between public governance and the underground economy? And if so, how does public governance influence the existence of the underground economy? The methodology of the study is predominantly hypothetic-deductive, the conclusions resulting from the authors' own research and from the synthesis, critical analysis and original treatment of the research results in the field. The analysis was carried out on the sample of the 28 EU Member States and covered the period 2007-2017. The data were statistically processed with the SPSS software, the results obtained demonstrating a close and negative connection between the public governance and the underground economy, in the sense that improving (increasing) the quality of public governance has the effect of lowering the underground economy.