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Corruption and the Shadow Economy at the Regional Level

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  • Gillanders, Robert
  • Parviainen, Sinikka

Abstract

The links between corruption and the shadow economy have mostly been studied empirically at the country level. This paper contributes to this literature by examining the relationship at the sub-national level. Using World Bank Enterprise Survey data, we find that sub-national units in which more firms report that corruption is an obstacle to their operations also tend to have more firms that report informal competitors as an obstacle and vice versa. We also ask whether within country variation matters and find that regions with a bigger problem in one of these dimensions than their national average also tend to have a relatively bigger problem in the other dimension. Sub-Saharan Africa is different in that neither of these findings are evident in that sub-sample.

Suggested Citation

  • Gillanders, Robert & Parviainen, Sinikka, 2015. "Corruption and the Shadow Economy at the Regional Level," MPRA Paper 64510, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:64510
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    Cited by:

    1. Salvatore Capasso & Rajeev K. Goel & James W. Saunoris, 2023. "The nexus between corruption and academic freedom: An international investigation of the underlying linkages," Contemporary Economic Policy, Western Economic Association International, vol. 41(3), pages 513-531, July.
    2. Nahid Sultana & Mohammad Mafizur Rahman & Rasheda Khanam, 2022. "Informal Sector Employment and Economic Growth: Evidence from Developing Countries in SDG Perspective," Sustainability, MDPI, vol. 14(19), pages 1-19, September.
    3. Tchablemane YENLIDE & Mawussé Komlagan Nézan OKEY, 2022. "Corruption et accès à l’électricité dans les pays de l’Afrique subsaharienne," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 55, pages 23-37.
    4. Canh Phuc Nguyen & Binh Quang Nguyen, 2023. "Does the shadow economy matter for tourism consumption? New global evidence," Empirical Economics, Springer, vol. 65(2), pages 729-773, August.
    5. Ritwik Banerjee & Amadou Boly & Robert Gillanders, 2022. "Is corruption distasteful or just another cost of doing business?," Public Choice, Springer, vol. 190(1), pages 33-51, January.
    6. Selçuk Akçay & Emre Karabulutoğlu, 2021. "Do remittances moderate financial development–informality nexus in North Africa?," African Development Review, African Development Bank, vol. 33(1), pages 166-179, March.
    7. Cummins, Mark & Gillanders, Robert, 2020. "Greasing the Turbines? Corruption and access to electricity in Africa," Energy Policy, Elsevier, vol. 137(C).
    8. Michael Breen & Robert Gillanders, 2020. "Press Freedom and Corruption Perceptions: Is There a Reputational Premium?," Politics and Governance, Cogitatio Press, vol. 8(2), pages 103-115.
    9. Dagmara Nikulin & Ewa Lechman, 2021. "Shadow Economy in Poland: Results of the Survey," SpringerBriefs in Economics, in: Shadow Economy in Poland, chapter 0, pages 49-65, Springer.
    10. Lv, Zhike, 2020. "Does tourism affect the informal sector?," Annals of Tourism Research, Elsevier, vol. 80(C).
    11. Salvatore Capasso & Rajeev K. Goel & James W. Saunoris, 2022. "The Nexus between Corruption and Academic Freedom: An International Examination Using Mediation Analysis," CESifo Working Paper Series 9890, CESifo.

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    More about this item

    Keywords

    corruption; shadow economy; regional variation; within-country variation;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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