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Property rights and shadow economies: A global perspective

Author

Listed:
  • Hoyong Jung

    (Graduate School of Public Administration, Seoul National University)

  • Youngjae Hwang

    (Real Estate Department, Sogang University)

Abstract

Many countries aim to reduce shadow economies due to the negative externalities they impose on society. This study examines the role of the property rights system and investigates how well-functioning property rights influence the underground economy from a multinational and multiperiod perspective. Employing two-way fixed effects and instrumental variable estimation, our findings confirm the prediction that the size of the shadow economy diminishes with the effectiveness of the property rights system. These results highlight the importance of establishing incentives for economic agents through the implementation of a robust private property system, which is essential for fostering both economic and social development.

Suggested Citation

  • Hoyong Jung & Youngjae Hwang, 2024. "Property rights and shadow economies: A global perspective," Economics Bulletin, AccessEcon, vol. 44(4), pages 1481-1491.
    • Handle: RePEc:ebl:ecbull:eb-24-00448
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    File URL: http://www.accessecon.com/Pubs/EB/2024/Volume44/EB-24-V44-I4-P118.pdf
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    More about this item

    Keywords

    shadow economy; property rights; individualism;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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