Corruption and the Shadow Economy

Arbeitspapier

This paper develops a simple framework to analyze the links between corruption and the unofficial economy and their implications for the official economy. In a model of self-selection with heterogeneous entrepreneurs, we show that the entrepreneurs' option to flee to the underground economy constrains a corrupt official's ability to introduce distortions to the economy for private gains. The unofficial economy thus mitigates government-induced distortions and, as a result, leads to enhanced economic activities in the official sector. In this sense, the presence of the unofficial sector acts as a complement to the official economy rather than a substitute.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 633

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: corruption ; shadow economy ; official economy ; self-selection.

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Choi, Jay Pil ; Thum, Marcel
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2002

Weitere Informationen

• Handle: http://hdl.handle.net/10419/75911
• Letzte Aktualisierung: 20.09.2024, 08:24 MESZ