Shadow Economies and Corruption All Over the World - Index of - IZA

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Shadow Economies and Corruption All Over the World: What Do We Really Know? Friedrich Schneider Johannes Kepler University of Linz and IZA Bonn Discussion Paper No. 2315 September 2006 IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 E-mail: iza@iza.org Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.
IZA Discussion Paper No. 2315 September 2006 ABSTRACT Shadow Economies and Corruption All Over the World: What Do We Really Know? 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. JEL Classification: O17, O5, D78, H2, H11, H26 Keywords: shadow economy of 145 countries, tax burden, tax morale, quality of state institutions, regulation, DYMIMIC and other estimation methods Corresponding author: Friedrich Schneider Department of Economics Johannes Kepler University of Linz A-4040 Linz-Auhof Austria E-mail: friedrich.schneider@jku.at
Page 1: DISCUSSION PAPER SERIES IZA DP No.
Page 5 and 6: 1 Introduction As corruption and sh
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Page 9 and 10: (1993) found similar reactions of p
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Page 13 and 14: Source: Schneider (2004) Table 2.3:
Page 15 and 16: Table 2.6: Values/Attitudes of the
Page 17 and 18: was done for three different points
Page 19 and 20: Summarizing, the econometric result
Page 21 and 22: Table 3.2: DYMIMIC Estimation of th
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Page 25 and 26: 7 Cameroon 32,8 33,7 34,9 8 Central
Page 27 and 28: with 65.3%. and Peru with 60.9% of
Page 29 and 30: 3.2.3 Highly developed OECD-Countri
Page 31 and 32: Table 3.2.7: The Size of the Shadow
Page 33 and 34: In low income countries, to the con
Page 35 and 36: Table 4.1: Empirical Results of the
Page 37 and 38: The second conclusion is, shadow ec
Page 39 and 40: craftsman sector (including repairi
Page 41 and 42: Table 6.1: Size of the supplied sha
Page 43 and 44: anxious to minimize this discrepanc
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Page 47 and 48: money in the official economy, and
Page 49 and 50: Di: the sum on number of dependants
Page 51 and 52: There is a large body of literature
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Some critical Points of the Differe
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Table 6.5: The Size of the Shadow E
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7 Appendix 2: Definition of the var
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(8) Share of Indirect Taxation and
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9 References Ahumada, Hildegard, Al
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Frey, Bruno S. and Hannelore Weck (
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Neck, Reinhard, Hofreither, Markus
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Witte, A.D. (1987): The nature and
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