| More

Tackling the debt crisis in Greece: The role of the underground economy

Views: 604 Downloads: 511
George Manolas, George Sfakianakis, Ioannis Vavouras
George Manolas, George Sfakianakis, Ioannis Vavouras

Abstract


This paper aims at assessing the relative
importance of the underground or shadow
or hidden economy in the effort of tackling
the current debt crisis. Examining the case
of Greece, one of the EU countries that face
serious sovereign debt problems, we emphasize
the importance of controlling the hidden
economic activity, that is of incorporating
it into the official economy. Moreover, by
analyzing the factors affecting the part of the
economic activity which takes place outside
the official sector, we evaluate the potential
gains Greece could have obtained in case it
could have converged to the best practice or
even the average levels of the determining
factors of the hidden economy prevailing in
the rest of the OECD countries.


Keywords


Underground economy; tax evasion; governance; regulation; tax burden

Full Text:

PDF

References


Agapitos G. and Mavraganis G., (1995), “Tax evasion: The case of Greece”, Bulletin of the

International Fiscal Documentation, 49 (12): 569-576.

Andvig J., Fjeldstad Odd-Helge, Amundsen I., Sissener T. and Soreide, T., (2000), Research on

corruption. A policy oriented survey, Commissioned by NORAD, Final Report.

Atkinson A.B. and Morelli S., (2011), Economic crises and inequality, Human Development

Research Paper 2011/06.

Baldacci E., de Mello L. an Inchauste G. (2002), Financial crises, poverty and income distribution,

IMF Working Paper WP/02/4.

Blades D., (1982), The hidden economy and the national accounts, OECD, Paris.

Bordo M.D. and Meissner C.M. (2011), “Do financial crises always raise inequality? Some evidence

from history”, sciie-ucsc.edu/JIMF4/Revised_Bordo_ Meissner.pdf

Cebula R.J., (1997), “An empirical analysis of the impact of government tax and auditing policies

on the size of the underground economy: The case of the United States 1973-94”, American

Journal of Economics and Sociology, 56 (2):173-185.

Chianini B., Marzano E. and Schneider F., (2008), Tax rates and tax evasion: An empirical analysis

of the structural aspects and long-term characteristics in Italy, IZA Working Paper No. 3447.

De Gijsel P., (1984), Okonomische Theorie des Schwarzarbeitsangebots und der Mehrfachbeschaftigung

in Schattenwirtschaft. Wiirtschafts-und sozialwissenschaftliche Aspekte, internationale

Erfahrungen, Gretschmann, K., Heinze, R., and Mettelsiefen, B., eds. Vandenhoeck &

Rubrecht, Gottingen, 76-96.

De Soto H., (1989), The other path: The invisible revolution in the third world, New York, Harper

Collins.

Dreher A., and Schneider F., (2006), Corruption and the shadow economy: An empirical analysis,

CREMA Working Paper, 2006-01, Basel, Center for Research in Economics, Management and

the Arts.

Dreher A., and Schneider F., (2010), “Corruption and the shadow economy: An empirical analysis”,

Public Choice, 144: 215-238.

Frey B.S., and Pommerehne W.W., (1982), “Measuring the hidden economy: though there be

madness, yet is there method in it?”, in Tanzi, V., (ed.), The underground economy in the US

and abroad, Heath Lex., 3-27.

Frey B.S., and Pommerehne W.W., (1984), “The hidden economy: State and prospects for measurement”,

Review of Income and Wealth, 30: 1-23.

Friedman E., Johnson S., Kaufmann D. and Zoido-Lobatón P., (2000), “Dodging the grabbing

hand: The determinants of unofficial activity in 69 countries”, Journal of Public Economics,

(3): 459-493.

Giles D.E.A., (1997), The hidden economy and the tax-gap in New Zealand. A latent variable

analysis, Discussion Paper 97-8. Department of Economics, University of Victoria.

Johnson S., Kaufmann D. and Shleifer A., (1997), “The unofficial economy in transition”, Brookings

Papers on Economic Activity, 2: 159-221.

Johnson S., Kaufmann D., and Zoido-Lobatón P., (1998), “Regulatory discretion and the unofficial

economy”, American Economic Review, 88 (2): 387-392.

Hunt J., (1999), “Has work-sharing worked in Germany?”, Quarterly Journal of Economics, 89 (1):

-148.

Kanellopoulos K., Koussoulakos J. and Rapanos V., (1995), “The shadow economy and tax evasion:

Measurement and economic impact”, Center of Planning and Economic Research,

Report nο. 15 (in Greek).

Manolas G. and Vavouras I., (2001), “The hidden economy and the convergence path towards

EMU”, Cyprus Journal of Science and Technology, 3 (2): 89-106.

Manolas G., Rontos K., Sfakianakis G. and Vavouras I., (2012), “The determinants of the shadow

economy: The case of Greece”, International Journal of Criminology and Sociological

Theory, 5 (3), (forthcoming).

Negreponti-Delivani M., (1990), The economics of the shadow economy in Greece, Papazissis

Publishing, Athens (in Greek).

Pavlopoulos P., (1987), The underground economy in Greece: A quantitative evaluation, FEIR,

Special Studies, nο. 17 (in Greek).

Reinhart C.M. and Rogoff K.S., (2010), “Growth in a time of debt”, American Economic Review,

(2): 573-578.

Rosser B.J., Rosser M.V. and Ahmed E., (2000), “Income inequality and the informal economy in

transition economies”, Journal of Comparative Economics 28 (1):156-171.

Rosser B.J., Ahmed E. and Rosser M.V., (2003), “Multiple unofficial economy equilibria and

income distribution dynamics in systemic transition”, Journal of Post Keynesian Economics

(3):425-447.

Rosser B.J., Rosser M.V. and Ahmed E., (2004), “Income inequality, corruption, and the nonobserved

economy: A global perspective” presented at the conference: New Economic

Windows 2004: Complexity Hints for Economic Policy, Salerno, Italy.

Schneider F., (2003), The development of the shadow economies and shadow labor force of 21

OECD and 22 transition countries, CESifo DICE Report, 1/2003.

Schneider F., (2004), The size of the shadow economies of 145 countries all over the world: First

results over the period 1999 to 2003, IZA Discussion Paper No. 431.

Schneider F., (2010), “The influence of the economic crisis on the underground economy in

Germany and the other OECD countries in 2010”, at http://www.econ.jku.at/members/

Schneider/files/publications/LatestResearch2010/ShadEcOECD2010.pdf.

Schneider F., (2011), “Size and development of the shadow economy of 31 European and 5 other

OECD countries from 2003 to 2012: Some new facts”, at http://www.econ.jku.at/members/

Schneider/files/publications/2012/ShadEcEurope31.pdf.

Schneider F. and Enste D.H., (2000), “Shadow economies: Size, causes and consequences”,

Journal of Economic Literature, 38 (1): 77-114.

Schneider F. and. Enste D.H., (2004), The shadow economy: An international survey, Cambridge

University Press, Cambridge.

Schneider F., Buehn A. and Montenegro C., (2010), “New estimates for the shadow economies

all over the world”, International Economic Journal, 24 (4): 443-461.

Singh A., Jain-Chandra S. and Mohommad A., (2012), Inclusive growth, institutions and the

underground economy, IMF Working Paper, 47.

Tatsos N., Christodoulou D., Tragaki A., Manika V. and Ganou I., (2001), The underground

economy and tax evasion in Greece, FEIR (in Greek).

Thomas J., (1999), “Quantifying the black economy: Measurement without theory”, Economic

Journal, 109: 381-389.

Torger B. and Schneider F., (2007), Shadow economy, tax morale, governance and institutional

quality: A panel analysis, IZA, Working Paper No. 2563.

Valentini E., (2007), Inequality and underground economy: A not so easy relationship. Universita

Politecnica Delle Marche, Quaderni Di Ricerca, No. 283.

Vavouras I. and Karavitis N., (1997), The problem of the shadow economy in Greece: Size, impact

and policies to tackle it, in The present and the future of the Greek economy, Kintis, A., (ed.),

Gutenberg, Athens, 125-135 (in Greek).

Vavouras I., Karavitis N. and Tsouchlou A., (1990), “An indirect method to estimate the size of

the underground economy with an application in the case of Greece”, in the Underground

Economy, Vavouras I., (ed.), Kritiki Publishing, Athens, 367-379 (in Greek).

Vavouras I. and Manolas G., (2004), The underground economy in Greece and the world: A first

approximation, Papazisis Publishing, Athens (in Greek).

Vavouras I., Manolas G. and Sfakianakis G., (2012) “A strategy for a socially righteous management

of the debt crisis in Greece”, Administrative Briefing, issue 61: 5-17 (in Greek).


Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.