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  • Print publication year: 2003
  • Online publication date: July 2009

4 - Size of shadow economies around the world


The results for seventy-six countries

There are numerous empirical surveys on the extent of the shadow economy in single countries (e.g., OECD or Eastern European countries). Various methods have been employed and the results concerning the size and development of this phenomenon differ strongly over time. Until now, these have not been compared properly. Therefore, in the following tables, the shadow economies of seventy-six countries (developing, transition, and OECD countries) are analysed for the years 1989–90 and 1990–3 with the ‘electricity consumption method’ as well as both the ‘cash’ and the ‘model’ approach. Naturally, restrictions also apply here. Yet, since at least two of the methods were applied to the majority of the countries, the different countries and approaches can be made comparable to a certain extent because of the corresponding periods of time.

In the tables, the countries are divided into developing, transition, and OECD countries as well as according to continents. The ‘physical input (electricity consumption) method’ has been applied not only to the majority of the developing and transition countries, but to the OECD countries also. This approach thus provides results for almost every country. The size of the Latin American shadow economy was calculated with the additional help of the model approach.

Regarding the development of an economy, one can assume that in the early stages the greater part of economic activity is hidden, as the added value is not yet seized officially and most of it is used for self-sufficiency.

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The Shadow Economy
  • Online ISBN: 9780511493591
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