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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/19117
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| Title: | | Corruption and the shadow economy : an empirical analysis  |
| Authors: | | Dreher, Axel Schneider, Friedrich G. |
| Issue Date: | | 2006 |
| Series/Report no.: | | CESifo working papers 1653 |
| Abstract: | | 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 cross-section 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. |
| Subjects: | | corruption shadow economy regulation tax burden |
| JEL: | | H26 D73 O5 O17 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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