Corruption and the shadow economy: An empirical analysis

Arbeitspapier

This paper analyzes the influence of the shadow economy on corruption and vice versa. We hypothesize that corruption and shadow economy are substitutes in high income countries while they are complements in low income countries. The hypotheses are tested for a crosssection of 120 countries and a panel of 70 countries for the period 1994-2002. Our results show that the shadow economy reduces corruption in high income countries, but increases corruption in low income countries. We also find that stricter regulations increase both corruption and the shadow economy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: KOF Working Papers ; No. 123

Classification and Topics

• Classification: Wirtschaft ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Tax Evasion and Avoidance ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
• Subject: Corruption ; Shadow Economy ; Regulation ; Tax Burden ; Korruption ; Schattenwirtschaft ; Regulierung ; Steuerbelastung ; Schätzung ; Welt

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Dreher, Axel ; Schneider, Friedrich
• Event: Veröffentlichung
• (who): ETH Zurich, KOF Swiss Economic Institute
• (where): Zurich
• (when): 2006

Further information

• DOI: doi:10.3929/ethz-a-005118325
• Handle: http://hdl.handle.net/10419/50890
• Last update: 20.09.2024, 8:23 AM CEST