Artikel

Does corruption contribute to the rise of the shadow economy? Empirical evidence from Uganda

This paper investigates whether corruption has contributed to the rise of the shadow economy in Uganda. Using autoregressive distributed lag bounds testing approach and granger causality econometric methods we find a positive relationship between corruption and the size of the shadow economy in both the long- and short-run. Additionally, the causality results reveal a bidirectional causal relationship between the shadow economy and corruption, and vice versa. These findings suggest that, for the case of Uganda, an increase in corruption contributes to the rise in the size of the shadow economy and vice versa, all else equal. Given the complementary relationship between corruption and the size of the shadow economy, addressing widespread informality in the country would require; first, reforming the political system to tackle political corruption and go after politicians who use their influence and power to circumvent institutions. Second, carrying out institutional reforms to address political patronage and influence peddling would go a long way into addressing systemic corruption which in turn could help mitigate the spread of informal sector activities. Third, strengthening the enforcement of existing laws to identify and punish culpable public officials who use their offices for private gain would also address the level of informality in the country.

Sprache
Englisch

Erschienen in
Journal: Cogent Economics & Finance ; ISSN: 2332-2039 ; Volume: 9 ; Year: 2021 ; Issue: 1 ; Pages: 1-22

Klassifikation
Wirtschaft
Bureaucracy; Administrative Processes in Public Organizations; Corruption
Tax Evasion and Avoidance
Legal Procedure, the Legal System, and Illegal Behavior: Other
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Thema
Corruption
country-level studies
informal sector
shadow economy
tax evasion and avoidance

Ereignis
Geistige Schöpfung
(wer)
Esaku, Stephen
Ereignis
Veröffentlichung
(wer)
Taylor & Francis
(wo)
Abingdon
(wann)
2021

DOI
doi:10.1080/23322039.2021.1932246
Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Artikel

Beteiligte

  • Esaku, Stephen
  • Taylor & Francis

Entstanden

  • 2021

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