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Analysis of the Gap in Economic Informality between Africa and the Advanced and Emerging Countries

Author

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  • Bodjongo1, Mathieu Juliot Mpabe

    (Faculty of Economics and Management, University of Dschang, Yaoundé, Cameroon)

  • Kamdem, Wilfried Briand

    (Sub-Regional Institute of Statistics and Applied Economics of Yaoundé, Yaoundé, Cameroon)

Abstract

This paper analyzes the factors that account for economic informality disparities between African countries and advanced and emerging economies. The study encompasses a survey of 84 nations, comprising 44 African countries, during the span of 1995-2015. The econometric outcomes, acquired from Krӧger and Hartmann's (2021) decomposition model, indicate that, on average, the level of informality in African country's economy is greater than that of advanced and emerging countries (OECD+). An increase in the standard of living of the population, an improvement in the control of corruption and the strengthening of financial development could enable African countries to reduce the explained gap. However, fiscal freedom, technological infrastructure, trade liberalization and political stability increase the explained gap. Furthermore, human capital and technological infrastructure reduce the total gap.

Suggested Citation

  • Bodjongo1, Mathieu Juliot Mpabe & Kamdem, Wilfried Briand, 2024. "Analysis of the Gap in Economic Informality between Africa and the Advanced and Emerging Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 39(1), pages 198-226.
    • Handle: RePEc:ris:integr:0899
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    Keywords

    gap; informal economy; decomposition method; Africa; emerging and advanced countries;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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