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Shadow Economy - The Impact of Regulation in OECD-countries

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  • Dominik Enste

Abstract

A comprehensive regulation index covering five major fields (labour, product and capital market; education/innovation and the quality of institutions) has been used to analyse the relationship between the density of regulations and the size of shadow economies. The empirical results from 25 OECD countries for the time period 1995-2005 show that - apart from tax burden and tax morale - the main causes are labour and product market regulations, overall regulations and poor quality of official public institutions and administration. An overview of relevant findings on the impact of regulation on irregular activities complements these findings.

Suggested Citation

  • Dominik Enste, 2010. "Shadow Economy - The Impact of Regulation in OECD-countries," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 555-571.
    • Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:555-571
    DOI: 10.1080/10168737.2010.525996
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    Cited by:

    1. Hans-Georg Petersen & Ulrich Thiessen, 2010. "Editors' Introduction: Shadow Economy in High Income Countries - Much Ado about Nothing?," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 413-419.
    2. Aristidis Bitzenis & Vasileios Vlachos & Friedrich Schneider, 2016. "An Exploration of the Greek Shadow Economy: Can Its Transfer into the Official Economy Provide Economic Relief Amid the Crisis?," Journal of Economic Issues, Taylor & Francis Journals, vol. 50(1), pages 165-196, January.
    3. Feige, Edgar L., 2015. "Reflections on the meaning and measurement of Unobserved Economies: What do we really know about the “Shadow Economy”?," MPRA Paper 68466, University Library of Munich, Germany.
    4. Aldo Salinas & Cristian Ortiz & Pablo Ponce & Javier Changoluisa, 2023. "Does tourism activity reduce the size of the informal economy? Capturing long-term heterogeneous linkages around the world," Tourism Economics, , vol. 29(2), pages 305-347, March.
    5. Toan Khanh Tran Pham, 2024. "Does government effectiveness moderate public spending on education–shadow economy nexus in ASEAN countries?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(3), pages 761-781, September.
    6. Mohammad Hossien Pourkazemi & Mohammad Naser Sherafat & Delfan Azari, 2015. "Modeling Iran`s Underground Economy: A Fuzzy Logic Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 19(1), pages 91-106, Winter.
    7. Óscar Afonso & Rui Sarabanda, 2017. "The impact of the informal economy on R&D, wage inequality and economic growth," Applied Economics Letters, Taylor & Francis Journals, vol. 24(1), pages 39-44, January.
    8. Hongbi Choi & Chungshik Moon, 2024. "Staying in the shadow or not? Remittances and the Shadow Economy," Social Science Quarterly, Southwestern Social Science Association, vol. 105(3), pages 682-695, May.

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