Shadow Economies Around the World: Size, Causes, and Consequences
IMF Working Papers, January 1, 2000
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- Shadow Economies Around the World: Size, Causes, and Consequences
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Bibliographic details
- Authors: Friedrich Schneider, Dominik Enste
- Published: January 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451844375.001
Overview
- Paper presents estimates of the size of the shadow economy in 76 developing, transition, and OECD countries.
- Estimates are derived by combining figures from different estimation methods.
- The paper describes and discusses the strengths and weaknesses of the different estimation methods.
- Publication date: January 1, 2000.
- Length: 56 pages.
Key findings
- The shadow economy is "remarkably large" in the 76 countries studied.
- Growth of the shadow economy is strongly related to:
- increasing burdens of taxation and social security contributions;
- the extent of state regulatory activities.
- Rising corruption has a clearly positive impact on the growth of the shadow economy.
Methods and limitations
- Estimates combine figures from multiple estimation methods.
- The paper discusses strengths and weaknesses of the different estimation methods (details in full text).
Policy implications and analysis
- Fiscal and regulatory burdens (taxation and social security contributions, regulatory activities) are central drivers of shadow-economy growth.
- Corruption reduction is implicated as a policy lever to contain shadow-economy expansion.
- Implicit recommendation: reform tax and social security burdens and streamline regulatory frameworks to reduce incentives for informal activity (policy emphasis follows from the relationships documented).
Content in this bundle
- Shadow Economies Around the World: Size, Causes, and Consequences - WP/00/26