TY  - RPRT
        AU  - Dreher, Axel
AU  - Schneider, Friedrich
        TI  - Corruption and the Shadow Economy: An Empirical Analysis
        PY  - 2006/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1936
        UR  - https://www.iza.org/publications/dp1936
        AB  - 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.
        KW  - regulation
KW  - shadow economy
KW  - corruption
KW  - tax burden
        ER  -