Arbeitspapier
Corruption and the Shadow Economy
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.
- Sprache
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Englisch
- Erschienen in
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Series: CESifo Working Paper ; No. 633
- Klassifikation
-
Wirtschaft
- Thema
-
corruption
shadow economy
official economy
self-selection.
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Choi, Jay Pil
Thum, Marcel
- Ereignis
-
Veröffentlichung
- (wer)
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Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2002
- Handle
- Letzte Aktualisierung
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20.09.2024, 08:24 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Choi, Jay Pil
- Thum, Marcel
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2002