Shadow Economies All Over the World: New Estimates for 162 Countries from 1999 to 2007

54 Pages Posted: 20 Apr 2016

See all articles by Friedrich Schneider

Friedrich Schneider

Johannes Kepler University Linz - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Andreas Buehn

University of Cooperative Education Bautzen

Claudio E. Montenegro

World Bank Group; Universidad de Chile, Economics Department

Date Written: June 1, 2010

Abstract

This paper presents estimations of the shadow economies for 162 countries, including developing, Eastern European, Central Asian, and high-income countries over the period 1999 to 2006/2007. According to the estimations, the weighted average size of the shadow economy (as a percentage of "official" gross domestic product) in Sub-Saharan Africa is 38.4 percent; in Europe and Central Asia (mostly transition countries), it is 36.5 percent, and in high-income OECD countries, it is 13.5 percent. The authors find a clear negative trend in the size of the shadow economy: The unweighted average of the 162 countries in 1999 was 34.0 percent and in 2007 31.0 percent; hence a reduction of 3 percentage points!.The driving forces of the shadow economy are an increased burden of taxation (both direct and indirect), combined with labor market regulations and the quality of public goods and services, as well as the state of the "official" economy.

Keywords: Economic Theory & Research, Currencies and Exchange Rates, Emerging Markets, Post Conflict Reconstruction, Country Strategy & Performance

Suggested Citation

Schneider, Friedrich G. and Buehn, Andreas and Montenegro, Claudio E., Shadow Economies All Over the World: New Estimates for 162 Countries from 1999 to 2007 (June 1, 2010). World Bank Policy Research Working Paper No. 5356. Available at SSRN: https://ssrn.com/abstract=1645726

Friedrich G. Schneider (Contact Author)

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria
+43 732 2468 8210 (Phone)
+43 732 2468 8208 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Andreas Buehn

University of Cooperative Education Bautzen ( email )

Loebauer Strasse 1
Bautzen, 02625
Germany

Claudio E. Montenegro

World Bank Group ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Universidad de Chile, Economics Department

Diagonal Paraguay 257
Torre 26, Of. 1801
Santiago
Chile

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