The relationship between corruption and the shadow economy is not clear. Theoretically, they either substitute or complement each other - exhibiting either a negative or positive relationship. This paper - using a structural equation model with two latent variables - extracts information on...

The relationship between corruption and the shadow economy is not clear. Theoretically, they either substitute or complement each other -exhibiting either a negative or positive relationship. This paper -using a structural equation model with two latent variables - extracts information on...

This paper presents an empirical analysis of the relationship between fiscal illusion and the shadow economy for 104 countries over the period 1989-2009. We argue that both unobservable phenomena are closely linked to each other, as the creation of a fiscal illusion may be helpful if governments...

Using various statistical procedures, estimates about the size of the shadow economy in 110 developing, transition and OECD countries are presented. The average size of the shadow economy (in percent of official GDP) over 1999-2000 in developing countries is 41%, in transition countries 38% and...