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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/10419/55871
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| Title: | | Beyond the veil of ignorance: The influence of direct democracy on the shadow economy  |
| Authors: | | Schneider, Friedrich Teobaldelli, Désirée |
| Issue Date: | | 2012 |
| Series/Report no.: | | CESifo working paper: Public Finance 3749 |
| Abstract: | | In this paper we analyze the influence of direct democratic institutions on the size and development of the shadow economies. The framework developed predicts a negative relationship between the degree of direct democracy and the size of the shadow economy. Countries where direct democratic institutions support democratic life are expected to be characterized by a lower informal sector, ceteris paribus. The empirical / econometric investigation of a sample of 56 democracies confirms our core hypothesis and demonstrates that the effect of direct democratic institutions on the shadow economy is negative and quantitatively important; the results are robust and also depend on the interaction of direct democracy with other political institutions, such as district magnitude. |
| Subjects: | | shadow economy direct democratic institutions district magnitude good governance |
| JEL: | | O17 D78 H11 H26 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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