Shadow economy

The scale and nature of activities in the non-observed economy vary widely, from huge incomes extracted from criminal enterprises (such as the drug business) to a bottle of vodka awarded to a plumber for a repaired tap. If you try to typologize shadow activity, taking its attitude to the “white” (official) economy as the main criterion, then three sectors of the fuel and economic sector will appear:

1. white-collar ( fictitious ) shadow economy,
2. gray ( informal ) shadow economy
3. black ( illegal , underground) shadow economy.

It is formed due to the existence of conditions under which it may be beneficial to hide its economic activities from a wide range of people. The scale of concealment can be different - from hiding the very existence of the company or the existence of certain assets, to hiding individual transactions.

Other things being equal, the higher the tax burden , the greater the shadow sector of the economy, since the enterprises in it, due to non-payment of taxes, gain a competitive advantage over other firms and push them out of the market. The more complex the bureaucratic procedures in developing countries, the greater this sector of the economy. ^{[2] The} economics of crime and punishment , in particular, deals with the feasibility of such behavior.

The enterprises of the shadow economy usually do not comply with the standards (for example, GOST ) that surround any kind of licensed activity. Sometimes the shadow sector develops due to increased administrative barriers to entering the market.

On average, the more employees there are in a firm, the less likely it is that they will receive an unformatted salary “in an envelope” from which taxes are not paid. ^[3]

The more an enterprise is involved in shadow activity, for example, “ cashing in ”, the less is the period of its probable existence, since the liquidation of such firms is another way to hide the traces of its activities.

The autonomous non-profit organization "National Institute for System Studies of Entrepreneurship Problems" (NISIPP) put forward a version of the main reasons for "going to shade" for 2007:

The main reason for leaving in the shadow was and remains high tax rates. The respondents consider the corruption of the state apparatus to be the most important “non-tax factor”: “informal payments” when obtaining licenses, certificates, permits require unaccounted cash. The next most important reason is the work of partners in the shadow sector (the need to purchase raw materials without paperwork, payment of interest on loans attracted on a “personal” basis, etc.).

- Article "Fight with the" shadow "" , " Rossiyskaya Gazeta " - the Russian Business Newspaper "№602 dated May 8, 2007

The more inevitable and more serious the punishments for the conduct of shadow economic activity, the, all other things being equal, the smaller its volume. Moreover, an increase in the inevitability of punishment reduces the volume of the shadow economy more than an increase in the severity of punishment, especially with a low probability of incurring it.

The “shadow” economy made itself known most loudly in the 1930s, when the Italian mafia invaded the American economy and took it aboard in a pirate manner. Since then, the "shadow" economy has evolved from the problem of law enforcement agencies into an economic and nationwide problem. In the 1930s, studies appeared that dealt only with the criminal side of such activities. In the 1970s, economists joined the study of “shadow” activities. The author of one of the first works devoted to the study of all aspects of the “shadow” economic activity was the American scientist P. Gutman. In his article entitled “The Underground Economy”, he convincingly showed that it is impossible to underestimate the “shadow” activity. A serious problem was the shadow trade in the late USSR, amounting to 10 billion rubles in 1986. ^[four]

In 2014, the IMF notes an increase in the transfer of funds to the shadow zone, in the US, the volume of the shadow sector of the economy exceeds the level of the banking sector, in Europe - in half, in China, the shadow sector is about a quarter of the money turnover ^[5] .

European Economic Cooperation Countries

According to the 2011 report, about 2.2 billion dollars rotated in the shadow economy of the countries of the European Community. In percentage terms, the most significant in size shadow economies are traditionally the countries of Southern and Eastern Europe (where their share of GDP ranged from 20 to 40%), where modern cashless payment technologies have not yet become widespread. Moreover, with the growing effects of the debt and financial and economic crisis, the amount of money going "into the shadows" tends to increase. At the same time, despite the smaller relative size of the shadow economies of more developed countries (14% in Germany, 11% in France and only 8% in Switzerland), in absolute terms, their shadow economies significantly exceed the corresponding figures in less developed regions because of the larger size GDP ^[6] .

In Russia

In 2018, according to official estimates by Rosfinmonitoring, the size of Russia's shadow economy was about 20% of GDP, with a turnover of about 20 trillion rubles a year. ^[7]

In Uzbekistan

According to experts, the share of the shadow economy in gross domestic product is more than 50% ^[8] .

The shadow economy has both obviously negative sides (tax evasion, connections with criminals) and some positive aspects. So, it is the shadow economy that mitigates the effects of recessions and financial crises, during which laid-off workers, as well as marginal segments of the population, find temporary sources of livelihood in a more flexible informal sector ^[9] . Otherwise, these groups would be threatened with hunger and deprivation of their livelihood, and society would be threatened with a social explosion. According to some data, there is an optimal size of the shadow economy of about 14-15% of annual GDP (Germany, USA). Countries that significantly exceed this level (for example, Romania and Greece ), or those that do not fit before it ( France ), have certain socio-economic problems or flaws.

• Black market
• Tsekhovik
• Garage economy
• Fartsovschik
• Speculation
• Cashing

• Definition of the shadow economy
• Kovalenko A.V.

• The shadow economy in the USSR