Tackling the Informal Economy: Towards a Coordinated Public Policy Approach
Public Policy and Administration, Vol. 20, No. 2, pp. 38-53, Summer 2005
17 Pages Posted: 8 Jul 2013
Date Written: 2005
Throughout the western world, the informal economy is now a priority for action in public policy circles. This paper analyzes how the UK government has sought to tackle this issue by attempting to join-up the myriad of actions being taken across government with regard to this realm, and evaluates the effectiveness of this coordinating approach. Analyzing the range of departments involved in this policy realm, the finding is that although there have been numerous attempts to facilitate greater coordination across departments in relation to data sharing, strategy and operations, responsibility remains heavily compartmentalized and fragmented in departmental ‘silos'. It thus reveals how the development of a more comprehensive ‘data bank’, allocating overarching responsibility for strategy to one department and Minister, and the formation of an employment-place compliance unit/agency could all encourage a more fully joined up approach towards this issue. Before taking these actions, however, this paper calls for comprehensive pilot studies to be conducted in order to evaluate the marginal net benefits of such initiatives in terms of improved tax recovery and/or reduced benefit fraud since the existing joined-up actions by no means conclusively display that greater coordination between departments necessarily leads to a more effective approach.
Keywords: undeclared work, coordinated approach, hidden economy, shadow economy, informal employment, tax evasion, tax compliance, tax non-compliance, shadow economy, underground economy, public policy
JEL Classification: O17, H26, H31, K42
Suggested Citation: Suggested Citation