Global Corruption and the Shadow Economy: Spatial Aspects

Posted: 26 Mar 2016 Last revised: 19 Apr 2016

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

James W. Saunoris

Eastern Michigan University

Date Written: 2014

Abstract

Using a large sample of nations, this paper examines the relation between corruption and the shadow economy, focusing especially on geographic spillovers. The results point to complementarity between corruption and the shadow economy. We find evidence of own contagion across nations in both corruption and shadow economy activity, while cross-contagion mostly points to substitution between own shadow economy (corruption) and neighboring corruption (shadow economy). These findings are fairly robust across different estimation techniques and measures of the shadow economy.

Suggested Citation

Goel, Rajeev K. and Saunoris, James W., Global Corruption and the Shadow Economy: Spatial Aspects (2014). Public Choice, Vol. 161, No. 1, pp.119-139, 2014, Available at SSRN: https://ssrn.com/abstract=2754305

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

James W. Saunoris

Eastern Michigan University ( email )

Eastern Michigan University
Ypsilanti, MI 48197
United States

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