Beyond Competing Theories of the Hidden Economy: Some Lessons from Moscow
Journal of Economic Studies, Vol. 38, No. 2, pp. 171-185, 2011
15 Pages Posted: 13 Dec 2015
Date Written: 2011
This paper evaluates critically the validity of rival theorisations of the hidden economy that variously read this sector as a leftover from some previous era, a by-product of a new emergent form of capitalism, a complement to formal employment or an alternative to the formal economy. Until now, the common tendency has been to either universally privilege one theorisation over others, or to represent each theory as valid in different places.
A survey is reported involving 313 face-to-face interviews with inhabitants of the city of Moscow conducted during 2005/06.
The finding is that each theory is valid when depicting particular types of hidden work in this global city, and that only by combining all these theories can a finer-grained and more comprehensive understanding of the complex and diverse nature of the hidden economy be achieved. How these theories can be synthesised in order to develop a multi-layered understanding of the hidden economy is then outlined.
Rather than privilege one theorisation over the others, or portray each as appropriate in different places, this Moscow survey reveals that each theory explains various types of hidden work and that all are required to achieve a nuanced finer-grained understanding of the nature of the hidden economy in a particular place. Practical implications
The recognition of multifarious types of hidden work, each with different economic implications, reveals that different policy approaches are required towards various forms of hidden work.
Re-theorises the hidden economy as a sphere composed of heterogeneous types of work.
Keywords: informal sector, underground economy, tax compliance, Moscow, post-socialist societies
JEL Classification: H26, J46, J48, K34, K42, O17, P2, P3
Suggested Citation: Suggested Citation