Publisher description for The shadow economy : theoretical approaches, empirical studies, and political implications / Friedrich Schneider, Dominik H. Enste.


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Counter Illicit work, social security fraud, economic crime and other shadow economy activities are fast becoming an international problem. Friedrich Schneider and Dominik H. Enste use currency demand, physical input (electricity) method, and the model approach, to estimate the size of the shadow economy in 76 developing, transition and OECD-countries. They argue that during the 90s the average size of a shadow economy varied from 12% of GDP for OECD, to 23% for transition and to 39% for developing countries. They examine the causes and consequences of this development using an integrated approach explaining deviant behaviour, which combines the findings of economic, sociological and psychological research. The authors suggest that increasing taxation, social security contributions, rising state regulatory activities and the decline of the tax morale, are all driving forces behind this growth, especially in OECD-countries. They propose a reform of state institutions to improve the dynamics of the official economy.

Library of Congress subject headings for this publication: Informal sector (Economics) Business enterprises Corrupt practices, Commercial crimes, Tax evasion, Illegal aliens, Welfare fraud, Fraud