We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
The Influence of Economic Freedom on the Shadow Economy in Developed and Developing Countries.
- Authors
Freytag, Andreas; Schneider, Friedrich; Spiegel, Sebastian E.
- Abstract
We empirically analyze to what extent economic freedom can explain the size and development of the shadow economy in OECD and other European countries. We econometrically examine the relation between a change of the overall index of economic freedom and the change of the shadow economy. We undertake an econometric panel estimation of 141 countries over the period 2000–2007. Our results demonstrate that first, the higher the economic freedom, the lower is the shadow economy. This holds especially for the index-sub-component legal structure and security of property rights. The sub-component freedom to trade internationally provides further support for this relation, limited to cases of positive changes of economic freedom. Second, the effects are asymmetrically, they are stronger when economic freedom increases than in the case of a decrease.
- Subjects
ECONOMIC liberty; INFORMAL sector; DEVELOPING countries; ECONOMIC change; PROPERTY rights; ECONOMIC policy
- Publication
Economists' Voice, 2022, Vol 19, Issue 2, p183
- ISSN
2194-6167
- Publication type
Article
- DOI
10.1515/ev-2022-0008