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Explaining the Shadow Economy in Europe: Size, Causes and Policy Options, Ben Kelmanson, Koralai Kirabaeva, Leandro Medina, Borislava Mircheva, Jason Weiss

This paper examines the drivers, and reestimates the size of shadow economies in Europe, with a focus on the emerging economies, and recommends policies to increase formality. The size of shadow economies declined across Europe in recent years but remains significant, especially in Eastern Europe. In the emerging European economies, the key determinants of shadow economy size are regulatory quality, government effectiveness, and human capital. The paper argues that a comprehensive package of reforms, focused on country-specific drivers, is needed to successfully combat the shadow economy. The menu of policies most relevant for Europe’s emerging economies include: reducing regulatory and administrative burdens, promoting transparency and improving government effectiveness, as well as improving tax compliance, automating procedures, and promoting electronic payments
Table Of Contents
Cover -- Content -- Abstract -- I.Introduction -- II. Defining and Measuring the Shadow Economy -- III. Size, Evolution, and Costs of the Shadow Economy -- IV. Determinants of the Shadow Economy -- V. Empirical Results -- VI. Re-estimating the Size of Shadow Economies for European Countries -- VII. Policy Options -- VIII.Conclusion -- BOX -- 1. Estimating Kosovo's Shadow Economy -- FIGURES -- 1. Shadow Economy in Europe -- 2. Shadow Economy Estimation: The MIMIC Model -- TABLES -- 1. Summary of Empirical Results -- 2. Summary of MIMIC Estimations -- APPENDICES -- I. Empirical Results with Non-European CIS Countries -- II. MIMIC Model -- III. MIMIC Estimation Results -- References
Literary Form
non fiction
Physical Description
1 online resource (30 pages)
Specific Material Designation
Form Of Item

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