Shadow Economies and Corruption All Over the World: Revised Estimates for 120 Countries

54 Pages Posted: 18 Dec 2010

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

Date Written: 2007

Abstract

Estimations of the shadow economies for 120 countries, including developing, Eastern Europe and Central Asian and high income OECD countries over 1999 to 2006 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2004/05 in 76 developing countries is 35.5%, in 19 Eastern and Central Asian countries 36.7% and in 25 high income OECD countries 15.5%. An increased burden of taxation and social security contributions, combined with labour market regulations 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.

Keywords: Shadow economy of 120 countries, tax burden, tax moral, quality of state institutions, regulation, MIMIC and other estimation methods

JEL Classification: O17, O5, D78, H2, H11, H26

Suggested Citation

Schneider, Friedrich G. and Buehn, Andreas, Shadow Economies and Corruption All Over the World: Revised Estimates for 120 Countries (2007). Economics: The Open-Access, Open-Assessment E-Journal, Vol. 1, 2007-9, Available at SSRN: https://ssrn.com/abstract=1726802 or http://dx.doi.org/10.5018/economics-ejournal.ja.2007-9

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

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