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Shadow Economies Around the World; Size, Causes, and Consequences

  • Friedrich Schneider
  • Dominik Enste

This paper presents estimates of the size of the shadow economy in 76 developing, transition, and OECD countries, which are derived by combining figures from different estimation methods. We describe and discuss the strengths and weaknesses of the different estimation methods. We find that the growth of the shadow economy—which is now remarkably large in the 76 countries—is strongly related to increasing burdens of taxation and social security contributions, as well as to the extent of state regulatory activities. Rising corruption also has a clearly positive impact on the growth of the shadow economy.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 00/26.

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Length: 56
Date of creation: 01 Jan 2000
Date of revision:
Handle: RePEc:imf:imfwpa:00/26
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  18. Ben-Zion Zilberfarb, 1986. "Estimates of the Underground Economy in the United States, 1930-80: A Comment on Tanzi," IMF Staff Papers, Palgrave Macmillan, vol. 33(4), pages 790-798, December.
  19. Petersen, Hans-Georg, 1982. "Size of the Public Sector, Economic Growth and the Informal Economy: Development Trends in the Federal Republic of Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 28(2), pages 191-215, June.
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