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

( GDPpct − GDPpct−1)
Per Capita Growth =
GDPpct
−1
Source: World Bank, International Comparison Programme database; own calculation by
authors.
(3) Shadow Economy
The variable Shadow Economy is defined as the informal sector [shadow economy] in percent
of official GDP. The estimations for the size of the shadow economy are undertaken using the
DYMIMIC and the currency demand approaches; using the values calculated in section 3.
This variable is available for three points in time namely the years 1999/00, 2001/02 and
2002/03.
Source: Own calculation by the author.
(4) Dummy Industrialized Countries
The variable Dummy Industrialized Countries is a binary variable and takes the value 0 if a
country is a developing country and 1 if the country is an industrialized country. “Developing
Country” corresponds to high income classification of World Bank Indicators 2002 with per
capita income of USD 9,265 or less. The same applies to “Industrialized Countries” which are
defined as countries with per capita GDP of USD 9,266 or more.
Source: Own calculation by authors.
(5) Dummy Transition countries
The variable Dummy Transition Countries is a binary variable and takes the value 1 if a
country is a transition country from a centrally planned economy to a market economy and 0
if the country is not. This variable is used for the classification of the countries.
Source: Own Calculation by authors.
(6) Dummy OECD countries
The variable Dummy OECD countries is a binary variable and takes the value 1 if a country is
member of the OECD and 0 if the country is not.
Source: Own Calculation by authors.
(7) Share of Direct Taxation (in % of GDP)
Source: OECD, Paris 2003, Taxing Wages and World Bank (Washington D.C.), 2003,
Governance Indicators.
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