Discussion Paper

No. 2007-9 | March 09, 2007
Shadow Economies and Corruption All Over the World: What Do We Really Know?

Abstract

Estimations of the shadow economies for 145 countries, including developing, transition and highly developed OECD economies over 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 28 transition countries 40.1% and in 21 OECD countries 16.3%. An increased burden of taxation and social security contributions, combined with a labour 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.

JEL Classification

D78 H11 H2 H26 O17 O5

Cite As

Friedrich Schneider (2007). Shadow Economies and Corruption All Over the World: What Do We Really Know?. Economics Discussion Papers, No 2007-9, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2007-9

Assessment



Comments and Questions


anonymous - Referee Report
May 07, 2007 - 09:15

see attached file


anonymous - Referee Report
May 07, 2007 - 09:16

see attached file