Shadow Economies and Corruption All Over the World: What Do We Really Know?

No 2315, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Estimations of the size and development of the shadow economy for 145 countries, including developing, transition and highly developed OECD economies over the period 1999 to 2003 are presented. The average size of the shadow economy (as a percent of “official” GDP) in 2002/03 in 96 developing countries is 38.7%, in 25 transition countries 40.1%, in 21 OECD countries 16.3% and in 3 Communist countries 22.3%. An increased burden of taxation and social security contributions, combined with a labor market regulation are the driving forces of the shadow economy. Furthermore, the results show that the shadow economy reduces corruption in high income countries, but increases corruption in low income countries. Finally, the various estimation methods are discussed and critically evaluated.

Keywords: quality of state institutions; tax morale; tax burden; shadow economy of 145 countries; regulation; DYMIMIC and other estimation methods (search for similar items in EconPapers)
JEL-codes: D78 H11 H2 H26 O17 O5 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2006-09
New Economics Papers: this item is included in nep-dev, nep-pbe and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (103)

Published - published in: Economies: The Open-Access, Open-Assesment E-Journal , 2007, 1

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Related works:
Chapter: Shadow Economies and Corruption all over the World: What do we Really Know? (2008)
Working Paper: Shadow economies and corruption all over the world: what do we really know? (2007)
Working Paper: Shadow Economies and Corruption all over the World: What do we really Know? (2006)
Working Paper: Shadow Economies and Corruption all over the World: What do we really know? (2006)
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